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