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Thread: New board to regulate property firms, agents

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    Default New board to regulate property firms, agents

    http://www.businesstimes.com.sg/sub/...62340,00.html?

    Published May 7, 2010

    New board to regulate property firms, agents

    Council for Estate Agencies to raise standards, introduce new rules by year-end

    By UMA SHANKARI


    (SINGAPORE) The Ministry of National Development (MND) will set up a new statutory board to raise the professionalism of the real estate agency industry and better safeguard consumers' interests.

    The proposed board - the Council for Estate Agencies (CEA) - will implement a new framework to regulate the industry.

    MND will introduce a Bill in Parliament in the second half of this year to set up the board - which will take over the Inland Revenue Authority of Singapore's current role in licensing real estate agencies - and establish the new regulatory framework.

    CEA is expected to be operational by year-end. BT has reported that it will be led by Chionh Chye Khye, executive director (designate) with MND.

    The setting-up of CEA will lead to more stringent licensing requirements for real estate firms and the mandatory registration of all property agents. New regulations on the conduct of estate agency work and discipline and dispute resolution mechanisms will also be introduced.

    Analysts highlighted several criteria proposed under the new regulatory framework - such as mandatory professional indemnity insurance, mandatory continuing professional development of six hours a year, and no dual representation - as positive steps that will help raise professionalism.

    'The government is sending a clear signal that in the long haul, stringent entry requirements are needed to be a property agent,' said Tan Tee Khoon, chief executive of industry body Singapore Accredited Estate Agencies (SAEA). 'This will raise the image and professionalism of the industry.'

    Institute of Estate Agents (IEA) president Mohamed Ismail said: 'This will definitely shake up the industry - an industry that has long had a reputation of not being regulated.'

    The proposed framework comes as the number of complaints against property agents has been rising in recent years. A significant number of these complaints involved HDB transactions, MND said.

    MND and other agencies started studying ways to strengthen the regulatory framework in mid-2009.

    Under the new framework, real estate agencies will have to satisfy enhanced licensing conditions. Firms must put into place systems and processes to ensure the proper management of business and agents, be covered by professional indemnity insurance and must not be licensed moneylenders or employees of licensed moneylenders.

    The principal licensee of an agency, as well as aspiring agents, must also not be an undischarged bankrupt, have a criminal record involving fraud or dishonesty or a track record of complaints or convictions.

    'Agencies will also be expected to exercise effective supervision of their agents and take responsibility for their actions,' MND said. To enable agencies to do this effectively, agents will be allowed to contract with only one agency.

    Potential agents will also have to meet a set of criteria to be registered - including having at least four GCE O Level passes or the equivalent, passing a new exam and undergoing compulsory continuing professional development.

    CEA will be given legislative powers and tools to investigate and discipline agencies and agents that fail to comply with the new regulations and codes. Disciplinary action will include warnings, fines, suspension and even the debarment of agencies and agents. Alleged criminal offences such as fraud and cheating will continue to be referred to police.

    Firms and agents will also be required to participate in a dedicated dispute resolution process covering both mediation and adjudication to address consumer complaints.

    Last but not least, public education will be stepped up. Among various things, a public registry of real estate agencies and agents will be set up to provide a comprehensive listing of all licensed agencies and registered agents.

    The public registry will include any records of disciplinary action taken over the preceding three years or any recognition or award received. Consumers can then check on the particular agency or agent they choose to engage.

    'There will be more transparency in an agent's conduct,' said SAEA's Mr Tan. 'Right now, there is no way to do a reference check on any agent you might want to hire.'

    But there are worries that there could some teething problems as the new regulations kick in. Auditing the over 20,000 agents in Singapore may present some difficulties, said PropNex corporate communications manager Adam Tan. IEA's Mr Ismail, who is also chief executive of PropNex, said the number of agents could fall within three years.

    MND said arrangements will be made to help existing estate agencies and agents switch to the new licensing and registration framework.

    For example, they will be exempt from the new minimum four GCE O Level passes or equivalent educational qualification criterion.

    Those who have passed an industry examination - such as the Common Examination for House Agents, the Common Examination for Salespersons, the Certified Estate Agents Examination or the National Skills Recognition System - will also not be required to take a new exam. Those who have not passed any existing industry exam will be given one year after the start of the new exam to pass it, and will be given a provisional registration in the meantime.

    MND said it will work out further details of the new framework over the next few months.


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    Default Govt steps in to curb errant property agents

    http://www.straitstimes.com/PrimeNew...ry_523501.html

    May 7, 2010

    Govt steps in to curb errant property agents

    New statutory board to regulate industry after rise in complaints

    By Joyce Teo


    NEW rules to nail errant property agents and protect Singapore's home buyers and sellers will be introduced by the Government.

    It is planning a new statutory board - the Council for Estate Agencies - to regulate the industry and require all property agents to sit examinations, register and stick to a binding code of ethics and conduct.

    Agents and agencies that flout the council's rules will be subjected to a range of disciplinary measures, including debarment.

    A key impetus for the Government's get-tough initiative is the rising number of complaints made against property agents in recent years.

    The Consumers Association of Singapore (Case) received 358 real estate cases, including complaints, in the first four months of this year, against 1,079 cases last year and 1,100 in 2008.

    And there has been a range of gripes from consumers about agents failing to give proper advice, using misleading sales tactics and not honouring agreements.

    Players in the largely fragmented and self-regulating industry had called for a mandatory licensing scheme for individual agents to help crack down on errant operators switching firms after being fired.

    The existing voluntary accreditation programme had allowed some agents to rejoin the industry after serving prison sentences for fraud.

    The changes - set to be introduced in the second half of the year - are destined to give regulation more focus, given that the Ministry of National Development has opted for a central body to license agencies and register agents.

    Under the new regime, all estate agents will have to register through their agencies with the Council for Estate Agencies, which will also take over the Inland Revenue Authority of Singapore's role in licensing estate agencies.

    To practise, property agents will need to pass a mandatory industry examination and undertake compulsory continuing professional development.

    Those who have already passed an industry exam will not need to sit the new test.

    New agents must have a minimum of four GCE O-level passes or the equivalent.

    Licensed moneylenders, or employees of a licensed moneylender, are to be prohibited from becoming an estate agent or agency, and vice versa.

    There have been reports of moneylenders trading as estate agents and exploiting cash-strapped HDB flat sellers. And National Development Minister Mah Bow Tan had announced in Parliament that new measures were being drafted to tackle the issue.

    Additionally, the new regulations will set out standard prescribed estate agency agreements for sale and leasing deals.

    Measures aimed at avoiding conflicts of interest are planned and will mean, for example, that agents will not be allowed to represent both the seller and buyer in the same transaction.

    To keep errant players in check, the framework will have the backing of legislation and disciplinary mechanisms. This will give the Council for Estate Agencies the power to hit agencies and agents with warnings, fines, suspension and debarment.

    ERA Asia-Pacific associate director Eugene Lim welcomed the introduction of the new controls.

    'Errant agents can now hide behind the companies. With the change, they can be struck off the register and won't be able to practise any more,' he said.

    In the area of consumer dispute resolution, agencies and agents will need to participate in mediation and adjudication.

    This process will tap existing facilities, such as consumer watchdog Case and the Singapore Mediation Centre, instead of a special tribunal as earlier suggested.

    The changes being implemented are going to mean that the Singapore Accredited Estate Agencies (SAEA) will no longer be accrediting agents.

    SAEA chief executive Tan Tee Khoon said that the SAEA can help small firms with mediation services for dispute resolution and training, given that agencies will have to set up dispute resolution and training systems for their agents.

    Mr Jeff Foo, president of the Institute of Estate Agents (IEA), said that the changes would mean the IEA becoming more relevant, given that as the platform and voice of the real estate sector, it can provide feedback to the new statutory board.

    [email protected]

    Key elements of new framework

    # Property agents need to be registered with a new statutory board called the Council for Estate Agencies. The board will also be licensing estate agencies.

    # Agents must pass a mandatory industry examination, undertake mandatory continuing professional development of six hours a year, and have a minimum of four GCE O-level passes or the equivalent.

    # Agents will not be allowed to represent both the seller and buyer in the same transaction.

    # Estate agencies and agents must not be a licensed moneylender or an employee of a licensed moneylender.

    # New legislative powers and mechanisms will be introduced to discipline agencies and agents. Such actions include warnings, fines, suspension and debarment of agencies and agents.

    # A public registry of estate agencies and agents will allow consumers to check on the particular agency or agent they are engaging.

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