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

I REFER to last Wednesday’s report, ‘Regulation of property agents under review’.

The Singapore Accredited Estate Agencies (SAEA) is fully supportive of the Government’s move towards a more effective way of regulating housing agents.

The housing agent industry is largely fragmented and unregulated. The current basic requirement is to pass the Common Examination for House Agents and apply for a house agent licence from the Inland Revenue Authority of Singapore (Iras). This licence is issued to agencies – that is firms and not individual agents. Once licensed, the proprietor usually recruits many associates (not employees), who work based on an agreed shared commission. So many agencies recruit agents indiscriminately, many without proper qualifications.

Therefore, the industry ends up with more than 30,000 agents and most without sound understanding of real estate practice.

We believe professionalism arises from, first, basic certification of skills and knowledge with continuing professional development training; and, second, a code of practice which agents follow.

This can come about only if there is mandatory licensing and accreditation of individual realtors and a body familiar with real estate practice that is sanctioned by the Government to be a watchdog.

We understand the Government has always encouraged the industry to self-regulate. This is feasible if the industry is in the first place regulated. To exercise control on an industry which is unregulated is indeed daunting. Nevertheless, the SAEA scheme was officially launched on Nov 11, 2005 by the then Minister of State for Finance and Transport, Mrs Lim Hwee Hua. When launched, this scheme was supported by the HDB, Iras and Ministry of Finance.

As a result, there are now more than 300 accredited agencies and 6,000 accredited agents and salesmen, sharing the common vision of raising professional standards in the industry by certified competencies and compliance to a professional code. We believe this is a good scheme and leaders of all our accredited agencies, which comprise 23,000 agents in total, will endeavour to work with government bodies to build a better real estate agency force in Singapore.

Peter Koh, Chairman of Executive Committee, Singapore Accredited Estate Agencies

Source: Straits Times, 30 Mar 2009

The aim is to strengthen enforcement framework and raise overall professional standards

FRESH details emerged in Parliament yesterday of a review that is now under way, which is aimed at regulating Singapore’s housing agents more effectively.

The review follows a high-profile court case which highlighted the problem of unscrupulous agents.
Senior Minister of State for Finance Lim Hwee Hua told Parliament the review will cover areas such as agent qualifications and training standards.

The review will also look at putting in place a dispute resolution mechanism and an enforcement framework against agencies with errant agents, she said.

News of the review was first disclosed by National Development Minister Mah Bow Tan last week during an interview.

Mrs Lim was responding to a question from Mr Lim Biow Chuan (Marine Parade GRC), who asked if there were plans to license individual agents.

Currently, any housing agent can switch from one agency to another, even if he is sacked, Mr Lim noted.

‘How does the ministry intend to deal with such rogue agents who behave in an unethical manner … Wouldn’t it be better to issue licences to individual agents instead of regulating them through agencies?’ he asked.

Mrs Lim said that these were issues that ‘the review will have to take into account – such as the ethical and performance standards, as well as the mode of licensing’.

The government review follows a high-profile case last month where a couple took estate agency ERA Realty Network to court after they sold their downtown apartment for $688,000 in 2007.

They eventually discovered their home was bought and resold by the wife of their agent’s boss for $945,000. The couple won the case and have received the difference of $257,000 back from ERA.
Mrs Lim, who did not make any reference to the case in her reply, said yesterday that the Government agreed that the ‘current state of the industry is not satisfactory’.

There have been frequent complaints against unscrupulous housing agents.

Government agencies including the National Development Ministry, the Housing Board (HDB), Ministry of Finance and the Inland Revenue Authority of Singapore (Iras) are ‘reviewing possible ways of strengthening the regulatory framework and raising overall professional standards’, she said.

‘Among other things, there is a need for greater control by the housing agencies over the conduct of their agents,’ she added.

Agency bosses that The Straits Times spoke to said they welcomed the move, and felt that licensing individual agents would be the way forward, with a central agency involving the Government playing a regulatory role.

The Government said previously that it preferred to let the industry regulate itself.

The industry currently lacks a high level of accountability, transparency and professionalism, and making agents responsible for their own actions will help in these areas, said PropNex’s chief executive Mohamed Ismail.

HSR Property Group executive director Eric Cheng felt that steps have to be taken to consider agents in the older age group, who might not meet new qualification standards – and not to set obstacles for entry into the industry.

ERA Asia-Pacific’s associate director Eugene Lim said he was open to a new regulatory framework for the industry, but hoped the Government would consult the industry before anything was decided.

Mrs Lim said the outcome of the review will be announced when it is completed, although no date was mentioned.

Source: Straits Times, 25 Mar 2009

SINGAPORE : The government is reviewing ways to strengthen the regulatory framework for housing agents.

Speaking in Parliament on Tuesday, Senior Minister of State for Finance and Transport, Lim Hwee Hua, said government bodies – including the Housing and Development Board and the Finance Ministry – are carrying out a review on how to raise the overall professional standards of housing agents here.

Mrs Lim said: “The government notes that the current state of the industry is not satisfactory. Indeed there have been frequent complaints against unscrupulous housing agents. Amongst other things, there is a need for greater control by the housing agencies over the conduct of agents.”

The assessment will cover areas such as qualification and training requirements as well as a dispute resolution mechanism. It will also look at an enforcement framework against agencies with errant agents. Mrs Lim said the government will announce details when the review is completed. – 938LIVE/ms

Source: Channel News Asia, 24 Mar 2009

THE National Development Ministry is reviewing the framework that property agents work under given the recent spate of unethical practices that have surfaced.

Minister Mah Bow Tan told The Straits Times: ‘The status quo, in my view, is not tenable. I think we need to do something.’

The MND is looking to see if it could get property agencies to keep a closer watch on their agents, among other things.

‘Surely the agencies, who I believe share in the commissions of the agents, have a responsibility too. Whoever is offering a service for a fee must have a responsibility, a duty to maintain certain standards,’ he said.

It may even take even tougher measures if agencies do not rein in their agents, said Mr Mah.

‘We have to see how agents do not mislead, and if they do mislead, they engage in unlawful practices, what action we can take against them.’

This is the first time that the Government has hinted at the possibility of mandatory regulations for the real estate industry. For years, it has maintained that the industry should regulate itself despite the fact that various such attempts have been found lacking.

Although housing agencies are licensed by the Inland Revenue Authority of Singapore, the over 20,000 housing agents here are not regulated. They do not need to meet minimum standards and can continue in the trade even if they are found to have done wrong.

In a highly publicised case last month, a couple took ERA Realty Network to court after they sold their downtown apartment for $688,000 in 2007 and learned subsequently that their home was bought and resold by the wife of their agent’s boss for $945,000. The couple won the case and have since received the difference of $257,000 back from ERA.

ERA had argued during the case that the agency was not liable for the actions of its agents because they are considered independent contractors.

Years of infighting have left housing agencies unable to agree on common standards for self-regulation.

The Institute of Estate Agents has only a small fraction of agents as its members and there is confusion over what it takes to be an accredited agency under the four-year-old Singapore Accredited Estate Agencies (SAEA) scheme.

The board behind the programme initially required accredited agencies to have all their agents pass the Common Exam for House Agents (Ceha) by this year, but introduced a scaled-down test called the Common Examination for Salespersons (CES) just before that deadline.

Mr Mah said: ‘I don’t think it worked well, based on all accounts…It’s not satisfactory. The whole current system is not satisfactory.’

His comments buoyed industry players like Mr Jeff Foo, the president of the Institute of Estate Agents, who said: ‘It’s about time for a change. We have to do things in the interests of the consumer.’

But the chairman of the SAEA, Mr Peter Koh, maintained that voluntary accreditation was making ’satisfactory progress’. About 300 agencies with more than 6,000 agents under them have been accredited so far.

‘With government support, we can do better. We are doing our level best given that it’s so fragmented.’

Source: Straits Times, 18 Mar 2009

I refer to the article, ‘License all agents, say experts’ (Feb 8).

I have been a licensed property agent since 1992, and am a member of the Institute of Estate Agents (IEA) and operate my own agency. I fully support the move to license all estate agents.

Licensed property agents and IEA members have to adhere to proper conduct and abide by a code of ethics, failing which we will be penalised or even have our licences revoked.

Unlicensed property agents, on the other hand, can easily get away with unethical practices; they can simply quit their agencies and join other agencies.

The time is right for this issue to be looked into – for the good of the industry and the public.

Conee Wuan (Ms)

Source: Straits Times, 1 Mar 2009

TUESDAY’S report, ‘The murky world of real estate practices’, encapsulates the morass in which the real estate industry finds itself in. Sad to say, all is not well in the industry and relief is not yet in sight.

As the Institute of Estate Agents (IEA) has no power to keep errant agents out of the industry, it is akin to a toothless tiger. Currently, estate agents handle both HDB and private property transactions and many buyers and sellers depend on them for their services.

The complaints committee of the Singapore Medical Council handles all complaints against doctors and this is governed by Section 40 of the Medical Registration Act 1997. Disgruntled patients have recourse to voice their grievances against doctors who indulge in any malpractice.

Why is there no recourse for real estate transactions that have gone awry?

When an owner appoints an estate agent to market his property, a relationship of agent-principal is established. This is called power of attorney. Such a relationship plays an important role in the real estate business. Even if the agent is fired or he quits, the agreement does not automatically end.

The agent can still have lingering apparent authority since various third parties may remain unaware of the termination of the relationship. To ensure that the agent does not act beyond his authority at the end of the relationship, the principal must be sure to give notice (via the newspapers) that the individual is no longer his agent.

In California, its 400,000 estate agents (called realtors) are governed by a code of ethics. They have to pass a course on the legal aspects of real estate, general accounting, business law, escrow (a document kept in the custody of a third party), mortgage loan brokering and computer application in real estate.

A realtor is obliged to safeguard his principal’s lawful confidences and secrets. Therefore, a real estate broker must keep confidential any information that may weaken a principal’s bargaining position. This duty precludes a broker who represents a seller from disclosing to a buyer that the seller can, or must sell a property (under pressure by banks) below the listed price. Conversely, a broker who represents a buyer should not disclose to a seller that the buyer will be willing to pay more than what has been offered for a property.

Since 1924, the Real Estate Institute of Australia has been the national professional association of the real estate industry in Australia. The institute is a politically non-aligned organisation that provides advice to the federal government. It has a stringent code which specifies, inter alia, that members must maintain a working knowledge and act in accordance with the relevant laws governing the real estate profession, act in the best interests of their clients and in accordance with their instructions, except where to do so is unlawful or contrary to good agency practice.

They must treat fellow real estate practitioners with respect and professional integrity and should not disclose confidential information obtained while acting on behalf of a client or dealing with a customer, except where required by law to disclose.

Perhaps Singapore’s Parliament should introduce legislation to set up a professional body like the Australian institute which has powers to discipline its members and uphold the professional integrity and reputation of such an august body.

Heng Cho Choon

Source: Straits Times Online Forum, 20 Feb 2009

The Consumers Association of Singapore wants an accreditation scheme to be put in place for the property industry.

Its executive director, Mr Seah Seng Choon, said that he has been in talks with various government agencies over the last six months to work on this.

‘The industry is very disorganised and it is really in need of proper regulation to ensure that buyers’ and sellers’ interests are protected,’ he said yesterday.

The accreditation scheme should hold companies responsible for their agents’ conduct. ‘Currently, many say that the agents are their associates and they are not responsible for their conduct. The scheme will put the agents’ conduct under their purview so they can’t deny responsibility.’

He hopes to put the scheme in place after talks with the Inland Revenue Authority of Singapore (Iras), the Housing Board, the Institute of Estate Agents (IEA) and the Singapore Accredited Estate Agencies (SAEA) are completed.

The number of complaints against property agents has been on the rise. Consumers lodged 1,113 complaints related to the property industry in 2007, up from 991 in 2006 and 672 the year before.

Currently, anyone who wants to broker a property deal need only join one of about 1,700 agencies here. No minimum qualifications are needed.

Although agencies may have some form of in-house training, some agents broker deals before they complete the course.

At present, only agencies are licensed by the Iras. Agents operating under them are not. There are an estimated 30,000 agents in the industry.

Mr Jeff Foo, president of the IEA, wants individual agents to be licensed so that they are accountable for their actions.

Errant agents fired from an agency can now simply ‘waltz into another licensed agency to continue his bad practice’, he said.

‘It’s time for a top-down approach to legislate agents so that the market will correct itself. If not, there will still be cowboys.’

Mr Seah agrees that agents should be licensed, and urged the Iras to issue individual licences.
Besides also calling for the licensing of individual agents, the SAEA wants the Common Examination for Salesperson (CES) to be made a compulsory entry qualification.

Currently, agencies have their own in-house training courses. SAEA also conducts a Common Examination for House Agents and the CES for interested agents.

But industry experts said the problem is that there are too many schemes and none is mandatory.

The IEA also has a central register that displays on its website the names of more than 20,000 agents. This allows the public to verify if someone is employed by an agency he claims to represent.

The registry also alerts bosses if an agent is working for more than one company and if he had been blacklisted before.

But it is not compulsory for agents to sign up with the registry. Said Mr Peter Koh, chairman of the SAEA: ‘At this point we need the authorities to come in. If they don’t, it’s hard for the industry to self-regulate.’

Source: Straits Times – 8 Feb 2009