FIRMS registered with the Singapore Accredited Estate Agencies (SAEA) will need to have professional indemnity insurance before they can renew their accreditation.
A minimum limit of indemnity of $500,000 is recommended under the new rule that comes into effect on April 1.
The move by the SAEA is to make consumers more confident when they engage estate agents.
All commission agreements and exclusive appointments are now signed between the consumer and the estate agency through the agent.
Professional indemnity insurance, which is regarded as a form of risk management in professional business practice, offers protection in case of negligence.
The SAEA has worked with AVA Insurance Brokers and Royal & Sun Alliance Insurance to devise options tailored for small and medium-sized estate agencies, which make up 70 per cent of the 400 agencies under SAEA. There are about 1,700 estate agencies in Singapore. Most of them are boutique-size firms.
SAEA chief executive Tan Tee Khoon said: ‘The mega estate agencies accredited by the SAEA already have existing cover at competitive rates. However, the boutique-size firms may not have the financial muscle to do the same and yet they too need it. The SAEA has negotiated what I believe to be the best available deal for these accredited real estate agencies.’
More information will be sent to the accredited agencies and a seminar will be held on March 25 to address the issue.
Accreditation by the SAEA is on a voluntary basis.
Source : Straits Times – 17 Mar 2010