Accreditation raises questions

Some in the property industry question how the rules can be enforced and ask who will do the policing

THE government last week unveiled a proposed framework to regulate property agents here – a move thought to be urgent as complaints about errant agents have risen over the years.

The changes mooted are varied. Among other things, the Ministry of National Development (MND) proposes that real estate agents no longer be allowed to be freelancers – that is, agents not contracted with an accredited agency.

It also wants to prevent agents from representing more than one agency.

And a recognised accreditation body for agents will be set up next year, which will create and maintain a public central registry that lists all accredited agents so that people can check that the agent they engage is qualified.

To oversee all this, a new government agency will be created. The aim is to monitor the activities of property agents more closely and enforce rules more keenly.

But some in the industry question how the rules can be enforced and ask who will do the policing.

There are now an estimated 25,000 to 30,000 agents in the market with varying degrees of training and professional standards.

And about 1,700 real estate agencies are licensed by the Inland Revenue Authority of Singapore.

Under the new framework, much of the burden will fall on agencies. MND said: ‘In particular, requiring real estate agencies to take greater responsibility for the actions of their agents will be a key feature.’

The government will license property agencies – but not individual agents. Property agents will instead be accredited by the accreditation body.

Agencies will play a strong role in disciplining errant agents and making sure the central registry is updated.

For instance, if an agent is fired, the central registry is to be updated to show a black mark against him, which is supposed to prevent another agency from hiring him.

MND said that agencies that fail to exercise adequate control over their agents may be subject to punitive measures, such as restrictions on recruiting more agents.

One agency boss said that the framework is a move ‘from no touch to light touch’.

Agency heads here have repeatedly said that they are not in favour of regulating their own agents.

Instead, they want the government to license individual agents so it will be able to revoke licences if rules are breached.

They point to Hong Kong for comparison. Hong Kong, one veteran estimates, has twice as many agents as Singapore, and uses a system where individual agents are licensed.

With such sentiment on the ground here, it is unclear how the new government body intends to get property firms to take responsibility for their agents – penalties notwithstanding.

Another question mark hangs over who will sit on the accreditation body’s board. Many industry players eligible will no doubt have vested interests.

It is also unclear how ‘introducers’ – de facto property agents – will be dealt with. These people charge a fee, typically to sellers, to introduce them to buyers. They often work independently. And as no agency is responsible for them, it is not known how will they be policed.

Other proposed changes have drawn a positive response. Under the new framework, agents will have to pass an industry examination and be accredited by the accreditation body before they can practise.

This will weed out some part-timers and moonlighters and could cut the number of agents by as much as 20 per cent.

And while the hoped-for licensing of individual agents may not materialise, setting up a accreditation body is seen as a step in the right direction.

‘As far as I am concerned, it (accreditation) is better than nothing,’ said an industry veteran.

Source: Business Times, 20 Oct 2009