The Ministry of National Development (MND) announced yesterday that the government has plans to set up a new statutory board to raise the professionalism of the real estate agency industry and to better safeguard consumer interest.

The proposed statutory board - the Council for Estate Agencies (CEA) - will implement a new framework to regulate the industry, through the enhanced licensing of estate agencies, registration of estate agents, new regulations on the conduct of estate agency work, discipline and dispute resolution mechanisms, and public education.

CEA will take over the Inland Revenue Authority of Singapore’s (IRAS) current role in licensing real estate agencies. MND will introduce a Bill in Parliament in the second half of this year to set up the new Council and to establish the new regulatory framework.

Under the new directions, real estate agencies will have to satisfy enhanced licensing conditions. These conditions seek to ensure that the licensees are competent, fulfil fit and proper criteria, and have in place systems and processes to manage the business and supervise their agents well. For instance, the licensees must not be un-discharged bankrupts, possess criminal records involving fraud or dishonesty, or have previous track records of complaints as agents.

The agencies also need to comply with a Code of Practice that stipulates systems and processes for areas such as agents’ training, complaints handling and dispute resolution. They will need to have professional indemnity insurance to adequately cover any financial liabilities arising from their transactions, and cannot be a licensed moneylender or an employee of a licensed moneylender to avoid a conflict of interest.

Additionally, agencies will also be expected to exercise effective supervision of their agents and take responsibility for their actions. To enable agencies to do so, all estate agents are to contract with only one agency. Individual agents will need to be registered with the Council through and with the support of their agencies, before they are allowed to do estate agency work. Agencies will have to ensure that the agents registered under them are competent and meet the fit and proper criteria.

As part of the new registration requirements, estate agents will need to pass a mandatory industry examination, and undertake mandatory continuing professional development (CPD) of six hours a year. This is to ensure that the agents possess the necessary knowledge for estate agency work, and continuously upgrade themselves by keeping abreast of latest changes in government policies and procedures relating to real estate transactions. The number of CPD hours will be increased over time to raise the professional standards of the industry.

Agencies and agents will be required to comply with new regulations on the conduct of real estate agency work. These include a code of ethics and professional conduct for estate agents, standard prescribed estate agency agreements for sale and leasing transactions and other measures aimed at avoiding a conflict of interest, such as the dual representation of both the buying and selling parties.

The Ministry said it will engage the industry and CASE over the next few months to work out the details of these measures.