Wednesday, November 25, 2009

Consumers back proposals to regulate real estate agents

Members of the public said that property agents must pass a standard industry entrance examination before they are allowed to practise.

The exam should not only test them on practical knowledge of the real estate industry and how to carry out their work, but it should cover ethics as well.

This was part of the feedback received during a public consultation exercise for a new regulatory framework for the real estate industry. The exercise gathered over 200 comments.

The public consultation is now closed, and the Ministry of National Development (MND) said that most of the feedback received was in line with the suggestions made by industry experts during an earlier consultation exercise.

The MND spent about two months consulting industry practitioners and the public on what the new regulatory framework for the real estate industry should comprise. The key elements of the framework are expected to be announced early next year.

Most complaints about property agents stem from unethical practices or misconduct. Hence, it’s no wonder why consumers who gave their views on the real estate regulatory framework supported proposed measures to weed out errant agents.

Members of the public welcomed the move to license individual agents. They also supported the proposal to disallow an agent from representing both the buyer and the seller of a property.

Some respondents also suggested that the government regulate the commission earned by agents by setting a standard commission guideline. This will serve to curb undercutting among agents and protect less-educated consumers from being over-charged by agents and minimise disputes between consumers and agents.

Other suggestions on regulating the industry include educating consumers on their rights and responsibilities, and disallowing property agencies and agents from buying properties directly from sellers or developers and reselling them during good times.

Industry players hope the government will implement the minimum entry qualification for agents soon.

Dr Tan Tee Khoon CEO of Singapore Accredited Estate Agencies, said: “This is to stipulate competence so that when a client is dealing with a particular agent, he or she would know that this agent has the requisite body of knowledge to deal with real estate transactions. And the demerit points system will help to provide a deterrence to negative professional conduct.”

But industry players said the suggestion to limit the size of agencies to better control agents was impractical.

PropNex CEO, Mohamed Ismail, said: “We’ve seen such things being implemented in Malaysia. And they (agencies) beat the system by having more licences and one of the main problem they realise here is that when you limit, you not only curtail entrepreneurship but also they don’t enjoy the economies of scale.

“And today, all the big agencies in Singapore, because they do have these numbers, they’re able to provide greater support like in-house legal, conventions, training, mediations, disciplinary board within the company. Such things are only possible when you have the numbers.”

Even though the government has only received over 200 suggestions from the public, industry players said it is not the quantity but the quality of the feedback that counts.

In fact, they said the public’s proposals come as no surprise, because ultimately the practitioners and the consumers are making the same call, that is, to raise the professionalism and standards of the real estate sector in Singapore.

Source: Channel News Asia, 25 Nov 2009

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