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Thread: Regulation of property agents under review

  1. #1
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    Default Regulation of property agents under review

    March 25, 2009 Wednesday

    Regulation of property agents under review

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

    By Jessica Cheam

    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.

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  2. #2
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    Default Housing agents: Need for a strong regulator

    March 26, 2009 Thursday

    Housing agents: Need for a strong regulator

    IN YESTERDAY'S report, 'Regulation of property agents under review', Senior Minister of State for Finance and Transport Lim Hwee Hua told Parliament the Government is reviewing ways to strengthen the regulatory framework for housing agents. This was in response to complaints about malpractices by housing agents.

    The measures being considered refer to raising the professional standard of agents, quality and training requirements, the dispute resolution framework, as well as the framework for enforcement.

    The approach is similar to the regulatory framework used for the sale of life insurance and investment products. It has failed to deal with the problem of mis-selling credit-linked notes and other financial products that are bad for consumers.�

    This approach relies on the principle of the free market, which is to provide information for consumers to make their decision. The crux of the problem is that the information is provided by the seller, who makes a bigger profit or commission by mis-informing the consumer. There is a serious conflict of interest.

    If this approach is adopted, the regulator must look after the interest of consumers, and take appropriate action against cheating, which is a crime that includes profiting unfairly by misleading the other party.�

    A better alternative is to have a strong regulator to set the rules for the market. An example is regulation on the sale of medicine and food products. These products are tested to be safe and suitable for consumption. The regulator can carry out the test or engage independent experts to do the work. But the regulator takes responsibility to put the stamp on the product.

    A better system is one in which the regulator licenses agents and sets professional standards of ethics and conduct. If agents fail to meet the standard, they should be removed, which is the case in the licensing of doctors, lawyers and other professionals.

    The regulator has the option to outsource the actual assessment to a professional or self-regulatory body, but this body should have 'teeth' and the backing of the regulator. Stronger regulation actually benefits the majority of ethical agents and creates a better market for all parties.

    I hope the Government will consider these suggestions.

    Tan Kin Lian

  3. #3
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    Default Real estate agencies fully back govt review

    March 30, 2009 Monday

    Real estate agencies fully back govt review

    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

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