Thursday, December 23, 2010

New dawn for real estate industry

Straits Times: Thu, Dec 23
COME Jan 1, Singapore's real estate industry will mark not just a new year but a new dawn. Only licensed agents will be allowed to work, in a nationwide bid to raise the industry's professionalism.

The industry will for the first time be regulated by the Council for Estate Agencies (CEA), which has been given powers to discipline agents in a sector often called a 'cowboy town'.

But it has got its work cut out for it.

Barely two months since it began operations on Oct 22, it has already received 228 complaints as of last Friday. This works out to 114 complaints a month - higher than the average 90 complaints a month filed with the Consumers Association of Singapore (Case) last year. Almost half - 47 per cent - concerned unprofessional or poor service, a big bugbear in the industry.

Speaking to the media for the first time since he was appointed CEA's executive director, Mr Chionh Chye Khye told The Straits Times the new body's core mission will be to raise standards.

To do this, CEA will deploy a three-pronged strategy, he revealed. The first is effective regulation. It is a balancing act for CEA, which 'should not overregulate or be too lax in regulation', he explained.

For example, agencies have said they fear CEA could overregulate by imposing stifling restrictions or making eligibility criteria for agents too stringent. 'Regulation must be for better outcomes, and hence, effective regulation is key,' Mr Chionh said.

Second, CEA aims to actively work with estate agencies as it cannot raise the industry's standards alone. '(The agencies) are at the front line and can sense consumer needs and changes in trends,' he said. Lastly, education of home buyers and sellers will be a key strategy as they come from a wide spectrum, from the less educated to the highly educated. 'If consumers do not understand, they make errors of judgment or bad decisions and can be misled by rogue salesmen,' he added.

CEA's 33-strong staff will also have to deal with other complaints such as disputes over fees paid to agents, which make up 12 per cent of complaints. CEA will look into each case and will investigate if the agent is in the wrong.

As of Jan 1, it will hand out licences to agents who make the cut, and will have the power to mete out penalties such as warnings, fines and suspensions and even revoke licences. Its service will be free for consumers, said Mr Chionh.

CEA collects a registration fee from each licensed agent and estate agency.

Consumers with complaints will have to pay a mediation fee if they choose to use CEA's dispute resolution scheme. Details on how this scheme works and the size of the fee will be released at a later date, he said.

Mr Chionh added that CEA's inquiries, complaints and appeals come via its hotline, website, e-mail messages and walk-in public counter in Toa Payoh's HDB Hub. It has been looking into 'fine-tuning' its processes.

Case executive director Seah Seng Choon told The Straits Times he was not surprised at the high number of complaints. He said given that the regulation is new and that there is greater awareness of a proper channel for consumers, 'this number will continue to grow and might escalate before it comes down'.

He is positive, however, that the new regime will improve the professionalism of the industry in the long run. 'Now agents are registered, they will think twice before doing something unprofessional,' he said.

The new rules will also make it unlikely that property agents will moonlight. There are no specific records of the number of people who have a day job but work as agents in their spare time and on weekends. But, PropNex spokesman Adam Tan said, with the new rules, such agents will be unable to continue as they must be registered in a database available to the public.

Another group affected are those who have problems reading and writing in English and are unable to pass recognised industry examinations conducted in English.

Ms C.H. Lee, 40, is one such agent. She has sold some 100 properties in recent years, but only has N-level qualifications. 'My English is poor. Property is the only thing which I can do well now so I feel uncertain about my family's future,' she said.

Meanwhile, the new regime has brought cheer to consumers. Home buyer Madam L.H. Goh, 51, a personal assistant, engaged an agent who failed to declare that the flat seller's agent was his wife.

'There was a conflict of interest and he misled me right from the start, so I'm glad CEA is able to look into this and has the power to punish unpro-fessional agents,' she said.

Mr Chionh added that generally, agency heads and agents themselves welcomed the greater regulation. This will enable them to 'weed out the few bad hats and upgrade the image and professional standards of the industry', he said.

Mr Chionh is a professional civil engineer and previously held the positions of deputy secretary at the Ministry of National Development and chief executive of the Building and Construction Authority.

CEA's vision is of a professional and trusted real estate industry, he said, adding: ''Professional' relates to the pursuit of standards in upgrading the industry, while 'trusted' refers to the trust that the consumers must have in the industry.'

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