The Ministry of National Development (MND) will set up a new statutory board to better safeguard consumer interest and enhance the professionalism of the property agency industry.
The proposed statutory board – the Council for Estate Agencies (CEA) – will enforce a new framework to regulate the industry.
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The government has decided to intervene after years of self-regulation, due to the rising number of complaints against property agents, coupled with the present licensing body’s lack of enforcement power.
Over the past three years, the Inland Revenue Authority of Singapore (IRAS) has received a total of 154 complaints against property agents – 44 cases in 2009, 63 cases in 2008 and 47 cases in 2007.
The new Council will take over the current role of IRAS in licensing property agencies.
Among the changes include requiring agencies to meet enhanced licensing conditions, like having systems in place to manage the business and agents.
For example, the licensees must not possess criminal records involving fraud or dishonesty, be undischarged bankrupts, or have previous track records of complaints as agents.
Before agents are allowed to practice, they must register with the Council through and with the support of their agencies.
To improve overall standards, they also have to pass a mandatory industry examination, and attend six hours of training per year to keep up with changes in the industry.
According to the MND, this is to ensure that all agents have the necessary knowledge for estate agency work, and incessantly upgrade themselves. To raise the professional standards of the industry, the number of training hours will be increased over time.
For new agents, a minimum of four GCE "O" Level passes or equivalent educational qualifications will be required before they can enter the industry.
Another key measure – the new statutory board will have the power to discipline and investigate errant agencies and agents.
Disciplinary actions will include warnings, fines, suspension and debarment of agencies and agents, while cases of fraud will be referred to the police.
“The individuals and the companies, the estate agencies, will now have to pay greater attention to the code of practices to make sure that they are giving consumers what the consumers are paying for. And also to make sure that those agents who are misbehaving are in a way disciplined, warned or removed from the industry,” said Mr. Nicholas Mak, a property lecturer from Ngee Ann Polytechnic.
“The errant agents may know all the rules, and sometimes they may know the rules so well that they could find loopholes to the detriment of the consumers. While the incompetent one may actually give wrong advice to consumers and could lead them down the wrong road. So both types of practices need to be eliminated.”
Several industry players said that such moves will help to remove unsavoury practices.
Mr. Eugene Lim, associate director of ERA Asia Pacific, said: “In the end, we will have better quality agents, who are more well-trained and are able to service the customers better. That’s what we all look forward to today. The centralisation of all the agents under a central body will also eliminate the current industry problem where there are bad hats in the industry that carry multiple name cards, that means they are double or triple agents.”
Provisions will be made to assist existing agencies and agents adapt to the new framework. For example, those who have passed an industry exam, like the Common Examination for House Agents, will be exempted from the new requirements. On the other hand, a temporary license will be given to those who have not passed any exam, and one-year time frame to complete the requirements.
In H2 2010, MND will introduce a Bill in Parliament to set up the new Council and to establish the new regulatory framework.