Introduction

       The Ministry of National Development (MND) is seeking feedback from the members of the public on the new regulatory framework for the real estate industry.  This forms part of MND’s efforts to enhance the professionalism of the real estate industry, as well as to enable consumers to better safeguard their interests.

2     The feedback received will be taken into consideration for the formulation of the new regulatory framework.

Key Features of Proposed Regulatory Framework

3     Over the past months, MND and other relevant government agencies have been studying ways to strengthen the regulatory framework.  These include getting real estate agencies to take greater responsibility for the actions of their agents, more robust qualifications and training requirements to increase professionalism, an improved dispute resolution mechanism, and an enforcement framework against agencies with errant agents.

4     Specifically, the key proposed features under the new regulatory framework include:

• Enhanced regulatory powers – The government will continue to license all real estate agencies, in tandem with compulsory accreditation of agencies and agents.  A regulatory authority with powers to take calibrated action against non-compliance will oversee the industry.
• Industry-led accreditation – The compulsory accreditation will be carried out by a single new accreditation body.  Responsibilities of the accreditation body could include maintaining a public central registry for all accredited agents and administering an industry entrance examination.
• Improved dispute resolution – Agencies will also have to take greater responsibility for resolving disputes with clients.  The government is also working with the industry to explore setting up an independent tribunal specialising in the real estate industry.  This tribunal can offer both mediation and binding adjudication.

5     More details of the proposed new regulatory framework can be found in the Consultation Paper for the New Proposed Regulatory Framework.

Period of Consultation

6     MND invites interested members of the public to participate in the consultation process.  The public consultation exercise will last for five weeks, from 13 October 2009 to 17 November 2009.  We welcome your views and comments on the proposed features and elements under the new regulatory framework.  Comments received by the Ministry after the deadline may not be in time for incorporation into the final framework.

SINGAPORE: Accrediting all real estate agents and setting up a tribunal to handle disputes are some of the proposals which could be introduced soon to help improve the standard of the real estate industry.

The suggestions came after the Ministry of National Development consulted industry players from September 10 to October 1.

From October 13, the public can give their feedback on the proposed regulatory framework for the real estate industry via this website The public consultation exercise will take one month.

The number of complaints against real estate agents has gone up recently. Last year saw over 1,400 complaints while six years ago there were only 400.

To beef up the professionalism of the real estate sector, the government plans to introduce some changes.

The proposals include setting up an independent body to ensure compulsory accreditation for all property agents, introducing a demerit point system to penalise errant agents and agencies, and having a public central registry which lists agents’ qualifications, employment history and track record.

Eugene Lim, associate director, ERA Asia Pacific, said: “We do encounter agents which are double or triple agents – that means at one time they’re agents with not only one company but sometimes with two or even three companies. So with a central registry system, we’ll be able to stop this.

“And those that are double and triple agents, we’ll be able to know who they are and these people will be taken out from the industry. Also another industry problem that this central registry can help to solve is checking on agents’ past performance.”

Industry players have welcomed the idea of a tribunal to handle disputes.

Jeff Foo, president, Institute of Estate Agents, said: “However, the people who are going to be sitting on the tribunal has to be people on the ground, who know about real estate transactions and subject matter experts.

“You can’t simply put somebody there to mediate, to solve problems if the person doesn’t really understand the nuts and bolts of the real estate industry.”

But there is something which industry players hope the government will consider and that is licensing individual agents.

Mr Lim added: “Licensing seems to be more serious, something which the individual agents would be more careful of because now they carry an individual licence and if they don’t meet the service standards or if they don’t perform or if they do something wrong, then their licence may be suspended and they may not be allowed to practice.”

For a start, the framework is likely to focus on residential property transactions because that’s where the bulk of complaints come from. If need be, the government said the framework will be broadened to include other real estate transactions like commercial properties.

The government said the key elements of the framework will be announced as early as December this year and the legislation should kick in by the middle of next year.

Source: Channel News Asia, 12 Oct 2009

Ministry to launch industry and public consultation exercises from next month

(SINGAPORE) The Ministry of National Development (MND) said yesterday it will start consultations for a new regulatory framework for the real estate industry – a move that was widely welcomed.

Over the past few years, property agents here have come under fire for not having the right qualifications and for unethical practices.

In March this year, for example, Minister for National Development Mah Bow Tan said the status quo was ‘not tenable’ and the system was ‘not satisfactory’.

To tackle the problem, MND will launch an industry consultation exercise and engage various stakeholders from next month. Parties that will be consulted include industry associations, agency directors and individual agents, the ministry said.

There are two objectives: To help consumers better safeguard their interests and to boost the professionalism of the real estate industry.

This will be followed by public consultation. The entire consultation process is expected to be completed by November and key elements of a new regulatory framework are expected to be ready by December.

‘Over the past months, MND and other agencies have been studying ways to strengthen the regulatory framework, which include getting real estate agencies to take greater responsibility for the actions of their agents,’ MND said in a statement.

‘Other areas to be studied include qualifications and training requirements to increase professionalism, an improved dispute resolution mechanism and an enforcement framework against agencies with errant agents.’

MND’s move comes even as real estate agent groups here push to improve the professionalism of property agents. The industry is now largely self-regulated, but players have said the voluntary system is no longer working.

‘We have been looking forward to this consultation for a while,’ said Singapore Accredited Estate Agencies (SAEA) chief executive Tan Tee Khoon. ‘The real estate industry here has been fragmented and unregulated for a long time.’

He believes a basic regulatory framework from the government is essential so the industry can then use it to self-regulate. SAEA, for its part, has accredited about 7,000 of the estimated 30,000 property agents here.

But Dr Tan says more is needed. In particular, a dispute resolution system that can deal with complaints from the public and ensure that genuine complains against errant agents are addressed is essential, he said.

Property agencies also welcomed the consultation. PropNex, which employs more than 5,000 real estate agents here, said a central registry of agents – from which those with a black mark can be struck off – is a must.

‘We all know that the current state of affairs is not adequate,’ said PropNex chief executive Mohamed Ismail. ‘Agents who have flouted the rules at one agency can just join another now. There is no way of stopping them from practising.’

In its statement, MND said that while the government works on a new regulatory framework, individual tenants and home buyers must also exercise greater care and responsibility.

‘Working with other agencies, MND will look into various public education efforts to equip consumers with the knowledge to conduct their real estate transactions prudently and with due diligence,’ the ministry said.

Source: Business Times, 21 Aug 2009