Tuesday, April 27, 2010

Oral Answer by Ministry of National Development on regulating real estate agents

Question No. 374
Question by: Mdm Halimah Yacob
Mdm Halimah Yacob: To ask the Minister for National Development
(a) how many complaints had the Ministry received against real estate agents over the last three years and how were these resolved;
(b) whether the existing regulations are sufficient in dealing with abuses and unscrupulous practices;
(c) when will the Ministry be introducing the mandatory industry examinations; and
(d) whether the Ministry is concerned with the current trend where credit companies working with real estate agents advance money at exorbitant rates to ignorant and desperate home owners who are selling their flats.
1 Real estate agencies are currently licensed by the Inland Revenue Authority of Singapore (IRAS). Over the last 3 years, IRAS has received a total of 154 complaints against real estate agents (47 cases in 2007, 63 cases in 2008 and 44 cases in 2009).
2 The current licensing regime does not empower IRAS to investigate into misconduct by real estate agents. IRAS’ practice is to refer the complaints it received to the Singapore Accredited Estate Agencies (SAEA) for investigation and resolution, if the agent is from an SAEA-accredited agency. Otherwise, IRAS will refer the complaints to the estate agencies directly. Where there are serious allegations e.g. cheating or falsification of documents, IRAS will advise the complainant to report to the Police.
3 Besides complaints to IRAS, consumers also lodge their complaints with CASE. There has been an increase in complaints received by CASE in recent years, with 1,055 cases in 2007, 1,100 cases in 2008 and 1,079 cases in 2009.
4 The Member asked about flat sellers who borrow money at exorbitant rates against the sale of their flats. HDB flats are not meant for short-term profit taking. They should also not be used as “security” for loans. We have received feedback that some moneylenders provide loans on the condition that the borrowers repay the loans from the sales proceeds of their HDB flats. We are currently working with the relevant authorities on appropriate measures to curb such abuses.
5 Existing regulations are clearly inadequate to deal with potential abuses and unscrupulous practices by errant real estate agents. This is the reason why my Ministry is considering strengthening the regulatory framework to protect public interest and to raise professional standards in the industry. Mandatory examination is one component under consideration. MND will be announcing the key elements of the new regulatory framework shortly.

Issued by: Ministry of National Development
Date: 27 April 2010

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