Presented by Jeff Foo, FIEA, CIPS,CRS,TRS President, Institute of Estate Agents, Singapore

Transcription

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3 Overview of real estate licensing regulations in Singapore Presented by Jeff Foo, FIEA, CIPS,CRS,TRS President, Institute of Estate Agents, Singapore

4 In Singapore today, the real estate agency business is regulated under the Estate Agents Act 2010 (hereafter referred to as the EAA ). The EAA was passed by Parliament on 15th September 2010 and assented to by the President on 1st October 2010, to regulate and control estate agency work.

5 Following the passing of the Act, the Council for Estate Agencies (hereafter called CEA ), was formed. This is a new statutory board. The role of CEA, among other things, are to: a) Administer the licensing regime for Estate Agents, including the registration of Salespersons who are required to apply through licensed Estate Agents; b) Regulate and control the practice of Estate Agents and Salespersons in estate agency transactions.

6 c) Promote the integrity and competence of Estate Agents and Salespersons through the Code of Practice and Code of Ethics and Professional Client Care; and d) Administer examinations and a professional development framework for the purposes of licensing and registration under the Act.

7 It also conducts industry compliance checks and investigations, as well as disciplinary proceedings in respect of offences and unsatisfactory conduct or misconduct in relation to estate agency work. CEA works closely with the industry and industry bodies to raise professionalism, expand capabilities and promote business excellence.

8 It administers the mandatory real estate examination and continuing professional development framework as well as appoints course providers. To protect the interest of consumers, CEA plans and implements public education programmes to equip consumers with the necessary information to make informed decisions in property transactions.

9 It facilitates access to consumer resources and provides channels for complaints and dispute resolution. CEA is governed by a Council which comprises professionals and academicians from sectors related to the real estate agency industry, as well as representatives from government agencies involved in the administration of the property market.

10 Prior to the formation of CEA, the real estate agency was not regulated by the Government. Instead, it was left to the industry players to self-regulate.

11 But for decades, this self-regulation regime failed to work. There were many instances of malpractices by real estate agents and agencies. And those malpractices continued to escalate over time. It came to a point where the Government declared that enough is enough. The status quo was untenable

12 This led to Government intervention. The Estate Agent Act 2010 was enacted by Parliament to regulate and control the practice of estate agents and salespersons in estate agency transactions, in the interest of the consumers at large.

13 Under the EAA, every real estate agency (hereafter called Estate Agent ) must be licensed and every housing agent (hereafter called Salesperson ) must be registered through a licensed Estate Agent, before they are allowed to carry out any real estate agency business. In default thereof, the wrongdoer is subject, on conviction, to a fine or imprisonment, or to both.

14 Under the Estate Agents Act 2010, those who break the provisions of this legislation are subject to criminal sanctions. For example

15 i. Estate Agents operating without licence are subject to a fine not exceeding $75,000 or to imprisonment for a term not exceeding 3 years or to both; ii. Salespersons operating without registration are subject to a fine not exceeding $25,000 or to imprisonment for a term not exceeding 12 months or to both;

16 iii. Salespersons operating without written agreement with Estate Agent shall, on conviction, be subject to a fine not exceeding $25,000 or to imprisonment for a term not exceeding 12 months or to both; iv. Salespersons found representing both the Buyer & the Seller or the Landlord & the Tenant, at the same time shall, on conviction, be subject a fine not exceeding $25,000 or to imprisonment for a term not exceeding 12 months or to both. v. And the list goes on and on

17 II. Challenges The CEA had been formed to administer the licensing regime for Estate Agents, including the registration of Salespersons for the protection of consumers. While carrying out its functions and duties, it faces the following challenges:

18 (i)managing without micro-managing the industry. It must strike the delicate balance of managing without micro-managing the industry. This is a challenge because it needs to study, tweak and update its guidelines and regulations continuously to keep pace with the fast changing market environment.

19 (ii) Managing the expectations of both the consumers and the market players With the passing of the EAA, consumers expect the CEA to protect its interest against errant Estate Agents and Salespersons. At the same time, Estate Agents and Salespersons expect the CEA to protect their interest against unethical consumers. CEA therefore, faces the challenge of finding the fine line of balancing the expectations of both opposing sides.

20 (iii) Managing change The real estate environment is changing at a fast pace. CEA must keep abreast with the changes in the market conditions on a continuous basis so as to regulate it more appropriately and effectively.

21 III. Benefits and effects to the industry and global community With the enactment of the EAA, the benefits to the industry and global community at large are as follows: a) Offers Transparency. The EAA and regulations provides clear guidelines on what are allowed and not allowed to be done by practitioners. Therefore, it offers transparency, clarity and certainty to all parties concerned.

22 b) Enhances Competence and integrity. The Code of Ethics and Professional Client Care provides the minimum standard required of Estate Agents and Salespersons while discharging their duties. This is good for the industry because it promotes the integrity and competence of Estate Agents and Salespersons. c) Raises professional standard. The examinations and a professional development framework raises the professional standard of the industry.

23 The uptrend in the real estate market arises because of many factors. Chief among them are the following: i. Low interest-rate environment ii. Influx of foreign buyers iii. Good economic performance of Singapore. iv. Very-low unemployment rate of just 2%. This high employment rate gives rise to high disposable income. This disposable income of wage-earners are, in turn, channelled to property investments for higher return on investments and possible capital gain.

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