NEW STATUTORY BOARD TO BE FORMED TO RAISE PROFESSIONALISM OF REAL ESTATE AGENCY INDUSTRY

1      The Ministry of National Development (MND) plans to set up a new statutory board to raise the professionalism of the real estate agency industry and to better safeguard consumer interest.

2      The proposed statutory board – the Council for Estate Agencies (CEA) (地产代理理事会) – will implement a new framework to regulate the industry, through the enhanced licensing of estate agencies, registration of estate agents, new regulations on the conduct of estate agency work, discipline and dispute resolution mechanisms, and public education. CEA will take over the Inland Revenue Authority of Singapore’s (IRAS’) current role in licensing real estate agencies. MND will introduce a Bill in Parliament in the second half of this year to set up the new Council and to establish the new regulatory framework.

Overview of the New Regulatory Framework

Enhanced Licensing for Estate Agencies

3      Real estate agencies will continue to be licensed, but will have to satisfy enhanced licensing conditions. These conditions seek to ensure that the licensees are competent, fulfil fit and proper criteria, and have in place systems and processes to manage the business and supervise their agents well. For instance, the licensees must not be un-discharged bankrupts, possess criminal records involving fraud or dishonesty, or have previous track records of complaints as agents.

4      They also need to comply with a Code of Practice that stipulates systems and processes for areas such as agents’ training, complaints handling and dispute resolution. They will need to have professional indemnity insurance to adequately cover any financial liabilities arising from their transactions, and cannot be a licensed moneylender or an employee of a licensed moneylender to avoid a conflict of interest.

Registration of Agents through their Agencies

5      Agencies will also be expected to exercise effective supervision of their agents and take responsibility for their actions. To enable agencies to do so, all estate agents are to contract with only one agency. Individual agents will need to be registered with the Council through and with the support of their agencies, before they are allowed to do estate agency work. Agencies will have to ensure that the agents registered under them are competent and meet the fit and proper criteria.

6      As part of the new registration requirements, estate agents will need to pass a mandatory industry examination, and undertake mandatory continuing professional development (CPD) of six hours a year. This is to ensure that the agents possess the necessary knowledge for estate agency work, and continuously upgrade themselves by keeping abreast of latest changes in Government policies and procedures relating to real estate transactions. The number of CPD hours will be increased over time to raise the professional standards of the industry.

Regulations on Conduct of Real Estate Agency Work

7      Agencies and agents will be required to comply with new regulations on the conduct of real estate agency work. These include a code of ethics and professional conduct for estate agents, standard prescribed estate agency agreements for sale and leasing transactions and other measures aimed at avoiding a conflict of interest, such as the dual representation of both the buying and selling parties. MND will engage the industry and CASE over the next few months to work out the details of these measures.

Mechanisms for Discipline and Dispute Resolution

8      The new regulatory framework will also include legislative powers and mechanisms to investigate and discipline agencies and agents who fail to comply with the new regulations and codes. Disciplinary actions will include warnings, fines, suspension and debarment of agencies and agents. Alleged criminal offences such as fraud and cheating will continue to be referred to the Police.

9      To help consumers seek redress on disputes and contractual matters, estate agencies and agents will be required to participate in a dedicated dispute resolution process covering both mediation and adjudication, which will tap on existing dispute resolution facilities such as CASE and the Singapore Mediation Centre.

Public Education

10      While the Government works to strengthen the regulatory framework for estate agencies, individual homebuyers and tenants will also need to exercise greater care and responsibility. Public education will be a key focus of the new Council’s work, and the new regulatory framework will include measures to equip consumers with the necessary knowledge to conduct their real estate transactions prudently and with due diligence.

11      Agents will be required to wear a standard agent identification card when doing estate agency work. A public registry of real estate agencies and agents will be set up to provide a comprehensive listing of all licensed agencies and registered agents. The public registry will include any records of disciplinary actions taken over the last three years or any recognition and award received. Consumers can then check on the particular agency or agent they are engaging.

Transition Arrangements for Existing Agencies and Agents

12       Arrangements will be made to help existing estate agencies and agents transit to the new licensing and registration framework. For instance, they will be exempted from the new minimum 4 GCE “O” level passes or equivalent educational qualification criterion. Those who have passed an industry examination, such as the Common Examination for House Agents, the Common Examination for Salespersons, the Certified Estate Agents Examination and the National Skills Recognition System, will not be required to take a new examination. Those who have not passed any existing industry examination will be given one year after the start of the new examination to pass the examination, and be given a provisional registration in the interim. Existing agents who are un-discharged bankrupts or have past criminal records will be considered for registration on a case-by-case basis.

New Regulatory Framework

13       MND first announced its intent to develop a new regulatory framework for estate agencies in August last year. An industry consultation exercise was conducted from September to October 2009, followed by a public consultation exercise¹ from October to November 2009. Industry and public inputs were taken into consideration in developing the new regulatory framework.

14      The proposed key elements of the new regulatory framework are summarised at Annex. MND will continue working out further details of the new framework over the next few months.

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¹ Click here for more details on the public consultation exercise:
http://www.mnd.gov.sg/RealEstateReview/index.html

Annex

PROPOSED KEY ELEMENTS OF NEW REGULATORY FRAMEWORK

• New Statutory Board – Council for Estate Agencies – to strengthen regulation of real estate agency industry
• Enhanced Licensing for Estate Agencies

• Singapore Citizen or Permanent Resident (current)
• At least 3 years of working experience (enhanced)
• Completed at least 30 property transactions in past 3 years, of which at least 10 must be private properties and at least 10 must be HDB flats transactions (enhanced)
• Major shareholder of the applying agency (current)
• Register its business with ACRA (current)
• Not to register a name which is similar to existing agencies (current)
• Pass examination for licensees or equivalent qualifications (current)
• Have minimum 4 GCE ‘O’ Level passes or equivalent (new)
• Fulfill fit and proper criteria (new) such as
  1. Must not be an un-discharged bankrupt;
  2. Must not possess criminal records involving fraud or dishonesty;
  3. Must not have previous track record of complaints or convictions
• Put in place systems and processes to ensure proper management of business and agents (new)
• Be covered under a Professional Indemnity Insurance (new)
• Must not be a licensed moneylender or an employee of a licensed moneylender (new)

• Registration of Agents through their Agencies

• Singapore Citizen or Permanent Resident
• Must be at least 21 years old
• Not be registered with another agency or be an existing licensee of an agency
• Have minimum 4 GCE ‘O’ Level passes or equivalent
• Pass examination for estate agents
• Undertake mandatory continuing professional development
• Fulfill fit and proper criteria such as
  1. Must not be an un-discharged bankrupt;
  2. Must not possess criminal records involving fraud or dishonesty;
  3. Must not have previous track record of complaints or convictions;
• Must not be a licensed moneylender or an employee of a licensed moneylender

• Regulations on Conduct of Real Estate Agency Work

• Code of Ethics and Professional Conduct
• Standard prescribed estate agency agreements
• No dual representation

• Mechanisms for Discipline and Dispute Resolution

• Disciplinary actions such as warnings, fines, suspension and debarment
• Dedicated dispute resolution mechanism covering both mediation and adjudication

• Public Education

• Agent identification card
• Public registry of agencies and agents

Source: Ministry of National Development, 6 May 2010

Date: 4th till 26th Jan 2010

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Duration: 10 sessions

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Date: 30^th Nov 2009 till 23^rd Dec 2009

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Duration: 10 sessions

Venue: HDB Hub

Fees: $270* (course fees) $80 (Material + admin charges)

*Eligible for WDA funding

Closing Date for registration:  27^th Nov 2009

Tentative Class schedule

*Tentative schedule, subject to changes.

Click here for more Course Details

To register, pls fill up registration form and fax to 6745 1747.

Payments can be made via cheque payable to “The Real Centre LLP”, sent to The Real Centre LLP, 6 Ubi Road 1, #05-08, Wintech Centre, Singapore 408726

All registrations and payment must be received by the closing date.

As vacancies are limited, pls register your interest by sending an email with your name, contact number and email address to register@cessingapore.com to be the first to know the next schedule for CES course.

       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.

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

Duration : 3rd Nov to 2nd Dec 2009 (Tuesday and Thursday)
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THE Government is moving quickly on a plan to regulate real estate agents in the wake of growing calls to improve the standards of the industry.

The Straits Times understands that an independent body will be set up and chaired by a neutral party appointed by the Government. It will also house a dispute resolution centre to mediate between agents and consumers.

Key agency bosses, industry associations and individual agents have already met with Government officials to discuss the reforms.

The proposals, which could be made public in the next month or two,will likely require that agents sit a compulsory exam and that all accredited agents be monitored through a central database run by this independent body.

This will mean that errant agents will no longer be able to switch agencies easily, as they can now. Currently, agents fired from an agency for dodgy activity can just switch to another firm.

There are also suggestions that agents will have to buy indemnity insurance protecting customers for losses resulting from negligent or unethical conduct.

While the Government has in the past maintained that the industry should self-regulate, it has decided to step in due to an increasing number of complaints against rogue agents, which has occurred in tandem with Singapore’s property market boom.

In February, for example, a couple successfully sued ERA Realty Network over its agents’ conduct. The agents, who have since resigned from ERA, had made a profit from ‘flipping’ an apartment they were supposed to sell for the couple.

The Consumers Association of Singapore (Case) received 1,100 real estate-related complaints last year, 1,113 in 2007 and 991 in 2006. This year, it received 619 complaints from January to August.

Case executive director Seah Seng Choon told The Straits Times this week that the proposed measures were long overdue.

‘There is a need to ensure a proper standard of practice so there aren’t abuses in the industry,’ he said.

Mr Seah is pleased that a central dispute resolution centre will be set up to help consumers and agents settle rows.

Although a clearer picture of the proposed reforms has emerged, two big questions remain: Are agents going to be individually licensed, and who else will be involved in running the independent body?

There are now two industry bodies – the Singapore Accredited Estate Agencies (SAEA) and the Institute of Estate Agents (IEA)- but it is not compulsory for agents to join either. While both associations are involved in the review process, discussions are ongoing as to their specific role in the independent body.

Industry observers note that some of the associations’ existing functions may become redundant in light of the new regulatory framework.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that ideally, agency bosses, many of whom advise the current industry bodies, should not be involved in this new independent body, as they might resist the reforms or have a conflict of interest.

‘The priority now is to put in place a system that can permanently remove errant agents from the industry so they think twice about behaving unethically,’ he said.

Agency heads say they fully support the suggested reforms.

‘Even if it involves more work for agency bosses like myself, I don’t mind so long it makes our industry more professional and disciplined,’ said C&H Realty managing director Albert Lu.

Mr Lu is one of many who back the idea of licensing not just agencies but individual agents.

‘They are the ones doing the transactions, so they should be made accountable for their actions,’ he said.

Knight Frank agent Peter Tan, 40, said it was a good idea to have a compulsory exam ‘to give clients confidence that agents know their stuff’.

But it remains to be seen how effective the new accreditation will be, he said.

‘It’s the right initiative. But there are many agents who resort to unethical conduct because it’s quite a tough business. We’ll have to see if it is enough to deter such behaviour.’

Public consultation on the proposed reforms is due to begin this month with the findings due by December.

Source: Straits Times, 5 Oct 2009

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Course Fees: $270^, Admin Fees: $30, Materials: $50
^ Terms and conditions apply for WDA-RE/MAX funding.

For more details on course schedule,

CALL 6846 4833 / 9107 7773
email: eunicelim@remax.net