A sterner deal for property agents now

Freelancing may end; agents will have to pass exam

The government has proposed ways to regulate property agents here.

To start with, their activities will be monitored more closely and rules enforced more keenly. A new government agency will be created to take on the enhanced regulatory powers.

A recognised accreditation body for agents will be formed. It will create and maintain a public central registry listing all accredited agents so that consumers are able to ascertain that the agent they engage is qualified.

The Ministry of National Development (MND) is also looking at whether industry players can work with government to set up an independent tribunal specialising in real estate disputes. ‘Such a set-up would send a strong signal on the industry’s commitment to enhance fair dealing and raise professional standards,’ said the ministry.

MND is also proposing that real estate agents should no longer be allowed to be freelancers (agents who are not contracted with any accredited agencies). It also wants to prevent them from representing more than one agency.

Agents must also pass an industry examination and be accredited by the accreditation body (which will be set up next year) before they can practise.

Key elements of the new framework are expected to be announced in December 2009 to January 2010. Legislative enactment is expected by the second half of 2010.

‘The new regulatory framework seeks to achieve two objectives: one, to enable consumers to better safeguard their interests through public education and robust regulations, and two, to increase the professionalism of the real estate industry,’ said MND in a statement yesterday.

The proposed framework comes as the number of complaints against property agents have been rising in recent years. The Consumers Association of Singapore (Case) received 1,100 real estate-related complaints last year, 1,055 in 2007 and 991 in 2006. This year, it received 727 complaints from January to September.

Minister for National Development Mah Bow Tan commented in March this year that the status quo was ‘not tenable’ and that the whole system was ‘not satisfactory’.

With this in mind, MND and other relevant agencies have been studying ways to strengthen the regulatory framework over the past few months. Various stakeholders were consulted, such as industry associations, real estate agency directors, individual agents, Case, and the Real Estate Developers’ Association of Singapore (Redas). MND is now is seeking public feedback.

The framework is likely to focus on residential property transactions as a start as the bulk of complaints are related to purchase of residential properties by individuals – particularly in the HDB resale market.

The proposed framework will also require property firms to take greater responsibility for their agents’ actions. Agencies, for example, will be required to put in place complaints-handling processes, including a mediation platform at the agency level in the event of a dispute.

The regulatory authority will also work with the accreditation body to establish a disciplinary framework to take action against non-compliance or infringement of accreditation requirements. If agencies and/or agents are found to be guilty, they will face disciplinary action in the form of demerit points and possible warnings, fines, suspension and expulsion.

Agencies that are unable to exercise enough control over their agents may also be subject to punitive measures such as restriction on recruiting more agents.

Industry players said that the framework could help usher in better standards of practice to an industry that is right now almost entirely self-regulated. ‘I think the impact will be towards greater professionalism and more protection for the consumer,’ said PropNex CEO Mohamed Ismail.

Market watchers also said that if the proposed regulatory changes are implemented, the number of agents could fall by as much as 20 per cent as those who are not prepared to sit for the industry examination could make an exit. Right now, there are an estimated 25,000 to 30,000 real estate agents in the market with varying degrees of training and professional standards.

Source : Business Times – 13 Oct 2009


Comments are closed.