Just over a month ago, the Ministry of National Development (MND) proposed ways to regulate the local real estate industry and sought public feedback on it. The public consultation period for it has closed and the ministry has published the findings.

For a news flashback, head on to http://iproperty.com.sg/news/1128/Singapore-government-to-regulate-real-estate-industry

The public consultation period was held from 13 October to 17 November 2009 of which over 200 independent comments and suggestions on various aspects of the new regulatory framework was received. On the overall, most respondents welcomed the move towards enhanced regulation of the real estate industry. There was support of key features proposed such as mandatory accreditation of agencies and agents, maintaining a public central registry for accredited agents, setting up an independent tribunal specialising in the real estate industry and introducing a Demerit Points System.

Below are a summary of public feedback as published on the Ministry of Development website:

Proposed component 1: Enhanced regulatory powers

Respondents were generally supportive of the Government’s enhanced regulatory powers to oversee the real estate industry and to take calibrated action against non-compliance such as imposing demerit points and suspension. A handful of respondents suggested posting blacklisted agents online to forewarn the public.

Dual Representation

Most agreed that an agent should only represent one party to avoid conflicts of interest. Some respondents also suggested disallowing dual representation by the same real estate agency and to impose this condition on rental transactions.

Some respondents commented that the buyers’ administrative fee may still incentivise sellers' agents to select only buyers who are willing to engage the agent’s services. There were suggestions to mandate co-broking, to stipulate all buyers to engage an agent and to require agents to inform sellers of all offers, regardless of the offer price or agent fees.

Regulate Commission Rate

Some respondents suggested that the Government set a standard commission guideline to curb undercutting among agents, protect less-educated consumers from overcharging by agents and minimise disputes between consumers and agents

Licensing of Individual Agents

Respondents had also called for the Government to license individual real estate agents, as agents should be held accountable for their own actions.

Proposed component 2: Industry-led accreditation

In general, the respondents supported mandatory accreditation of agencies and agents, with some preferring accreditation to be done by the Government.

Minimum Entry Qualification for Agents

Respondents were supportive of a standard industry entrance examination covering both ethics and practical knowledge. Besides the entrance examination, some respondents also suggested stipulating some minimum educational qualifications.

Public Central Registry

Generally, the respondents supported the implementation of a Public Central Registry to list all accredited agents. A few respondents suggested that the Registry should incorporate feedback and ratings from past clients.

Proposed component 3: Improved dispute resolution

The respondents generally supported the idea of an independent tribunal specialising in the real estate industry. Some commented that the mediators/ adjudicators should have industry background. Several respondents felt that the Tribunal should also handle disputes among agents, as well as between agents and their agencies.

Other key feedback that was highlighted by the respondents was that the new proposals should also take into account interests of real estate agents as they face challenges like no basic salary, bearing the cost of advertising and transportation, giving their agencies a cut of their commission and run the risk of clients defaulting payments.

Some other suggestions were given like:

• Standardise real estate industry practices

• Standard forms, contracts and agreements for consumers and agents

• Limit the size of agencies for better control of agents

• Accord recognition to outstanding agents

• Disallow agencies/agents from direct buying of properties from sellers/developers, holding onto properties and resell them at good times

• Prohibit agents from contributing to litter through advertisements brochures and flyers

• Educate consumers on their rights and responsibilities.

MND said in a press release, “These views were generally consistent with feedback gathered during the industry consultations conducted from 10 Sep to 1 Oct 2009, where MND consulted relevant stakeholders, including industry associations, real estate agency directors, individual agents, CASE, and REDAS.”