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Thread: A sterner deal for property agents now

  1. #1
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    Default A sterner deal for property agents now

    http://www.businesstimes.com.sg/sub/...54294,00.html?

    Published October 13, 2009

    A sterner deal for property agents now

    Freelancing may end; agents will have to pass exam

    By UMA SHANKARI


    (SINGAPORE) 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.

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    http://www.straitstimes.com/Prime%2B...ry_441387.html

    October 13, 2009 Tuesday

    Tribunal for real estate sales rows?

    It's among several proposals mooted to protect consumers

    By Joyce Teo


    A SPECIAL tribunal might be set up to resolve disputes over residential real estate transactions - replacing the current bewildering hotch potch of options.

    This is one of a wide-ranging set of proposals aimed at protecting consumers and lifting standards in the largely fragmented and self-regulating property industry.

    Others include: Accrediting all agents, setting up a central registry and instituting a common entrance examination for agents.

    The Ministry of National Development (MND) will launch a public consultation exercise for one month from today.

    It has just conducted extensive industry consultations on the proposed shake-up. A key impetus for the review, the Government said, has been the high number of complaints in recent years.

    To resolve disputes, consumers usually go to the agencies, the industry associations or the Consumers Association of Singapore (Case). Case, for instance, had 727 real estate cases in the first nine months of the year, compared with 1,100 cases last year and 1,055 cases in 2007. It had just 379 cases in 2002.

    Case executive director Seah Seng Choon said a tribunal specialising in real estate disputes would help both consumers and agents cut dispute-related costs and, hopefully, speed up resolution.

    The Government could help initially by providing start-up funding, but its operation would eventually rest with the industry, it said.

    Also, MND said it may be necessary for all agencies to put in place complaints handling processes.

    'The first line of defence should be the agencies, followed by an independent body before the case goes to the tribunal. If not, everybody will be heading straight to the tribunal,' said Institute of Estate Agents president Jeff Foo.

    He added the framework is a 'good step forward after more than 20 years of self-regulation'.

    Another key proposal is mandatory accreditation for agents. The accreditation body - possibly a group of professionals - could keep a public central registry to let agencies assess the background of agents they aim to hire.

    This registry could help solve the problem of errant agents who switch from one agency to another undetected or those attached to multiple agencies, experts said.

    About 1,700 agencies and 25,000 to 30,000 agents deal in HDB and private homes here.

    To add clout to its plan, the Government wants to introduce a regulatory authority, which will be a government agency working with the accreditation body, to set up a disciplinary framework for taking action against errant agents.

    For instance, to prevent rogue agents from jumping from one agency to another, MND is thinking of having a demerit points system. These points would stay with the agents and be widely known, MND deputy secretary (development) Tay Lim Heng said yesterday.

    Agencies may also face the same disciplinary actions.

    Still, some industry sources say more needs to be done. 'The industry has been pushing for the licensing of individual agents for more than a decade. The basic minimum requirements weeds out only agents who don't know what they are doing, not the unethical agents,' said ERA Asia Pacific's associate director Eugene Lim. 'The agents have to fear the accreditation body. Otherwise, there is only so much the agencies can do.'

    Real Estate Developers Association of Singapore chief executive Steven Choo said: 'You can't legislate ethics, but you can transmit knowledge and raise standards of professionalism. No industry matures overnight. Given time, we should be looking at an improved industry.'

    Consumers may benefit, but they also have to help make the framework effective. There would be public education outreach programmes to help them understand their responsibilities and rights.

    Key elements of the new framework are expected to be out by the end of the year, with the legislative work to be done by the first half of next year. It would be up and running in the second half of the year.

    The public can offer feedback on www.mnd.gov.sg

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    http://www.straitstimes.com/Prime%2B...ry_441382.html

    October 13, 2009 Tuesday

    Move to ban 'one agent for buyer and seller' under study

    By Jessica Cheam


    THE Government is contemplating a move to ban property agents from engaging in the widespread practice of representing both the seller and buyer of an HDB flat in the same transaction.

    The idea is set to get the thumbs up from home buyers and sellers, but could leave some agents unhappy at a potential loss of commission income.

    The proposal was released yesterday by the Ministry of National Development (MND) to raise industry standards. The move would ensure that agents are 'not in a conflict-of-interest position', it said.

    Currently, many disputes arise because an agent represents both buyer and seller in the same HDB resale transaction.

    The practice means the seller's agent often gets a commission from the buyer as well and may refuse to sell to a certain buyer if no commission can be made.

    In other words, the agent may not be trying his best to achieve the best price.

    For example, suppose a seller's agent gets an offer of $300,000 for an HDB flat from a direct buyer willing to pay a commission. He gets to collect 2 per cent in fees from the seller and 1 per cent from the buyer. All up: $9,000 in commission.

    But suppose another buyer comes along with his own agent and offers $320,000. Although the price offered is higher, the seller's agent might refuse to cooperate with the buyer's agent as the potential commission is lower at $6,400 than if it was a direct buyer.

    This practice presents a clear conflict of interest - sellers naturally want the highest price for their property, and buyers want to pay the lowest, MND said in a statement.

    'The same agent cannot possibly discharge his professional duties to both equally and represent both their interests fully.'

    However, MND noted that flat buyers may need an agent's administrative help, and proposes the seller's agent be paid a fixed administrative fee to help buyers process the paperwork. Alternatively, buyers could engage their own agents or even handle the transactions themselves.

    Agency bosses yesterday acknowledged that this move might be unpopular with property agents as it will hit their commission cheques.

    'This could be a big issue for agents since this practice has been adopted for many years now,' said ERA associate director Eugene Lim. Still, ERA supports the move if it protects the consumer by preventing conflicts of interest, he said.

    PropNex chief executive Mohamed Ismail said it is common for some agents to refuse to co-broke in order to earn larger commissions. Co-broking is where a seller has one agent and a buyer another.

    'In the longer term, agents will not lose out as it levels the playing field. All agents will have to co-broke, and everyone will get his rightful commission,' he said.

    Mrs Loh Jo Lyn, 28, is one home buyer who had a bad experience buying an HDB flat when her bid through her agent was rejected by another agent who wanted a direct buyer.

    'This is definitely moving in the right direction. The industry needs more regulation to protect sellers and buyers,' she said.

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