REPORT
PROPERTY AGENCIES ASSOCIATION STUDY TOUR TO SINGAPORE
Issued by
PROPERTY AGENCIES ASSOCIATION LIMITED, HONG KONG.
JUNE 1996
1. After the passing of the Estate Agents Bill on 17th November 1995, the Property Agencies Association together with other agencies associations have submitted to the government and the Bills Committee on Estate Agents Bill, our objections to the provisions to the Bill and our recommendation for amendment to some of its provisions.
2. In early June 1996, after consultation with the Association of Singapore Realtor (ASR), the Property Agencies Association Ltd. (P.A.A.) decided to arrange a study tour to Singapore with a view to understanding the running of real estate agents, the laws and the rules governing the estate agents in Singapore.
3. The delegate of Hong Kong Property Agencies Association Ltd., including Mr Tang Hoi Tung (Chairman), Mr Li Man Pong (Vice-Chairman), Mr Cheung Tak Woo (External Affairs Secretary) and 13 other members of the Association, arrived Singapore on 12th June, 1996. We were warunly welcomed by members of the Executive Council of Association of Singapore Realtors, Ms G.C. Tan (President), Mr Dean Ong (1st Vice President), Mr Alex Khoo (2nd Vice President), Mr Peter Koh (Hon Secretary), Ms Cecilia Lo (Hon Treasurer), Mr Dennis Wee (Hon Auditor) and other Council Members. To commemorate the mutually beneficial collaboration of the two associations, P.A.A. and ASR signed a Memorandum Of Understanding (MOU). Thereafter a conference was held between the two delegates to discuss matters of common interest relating to real estate agents both in Hong Kong and Singapore.
1. In Singapore, a corporate licence is required for operating the real estate agency business. With effect from 1 January, 1996 a coporate licence, should be obtained before a person can operate his own business as an house agent. The Inland Revenue Authority, a government department of Singapore, is responsible for the issue of corporate licences. To be eligible for such a licence, the applicant has to satisfy with the following licensing requirement apart from the requirement for setting up a corporation, a sole proprietorship or partnership business:-
- Obtained a pass in the Common Examination for House Agents, which is conducted by the Inland Revenue Authority of Singapore;
- Has a minimum of one to two years working expedience in the estate agency practice;
- A good check record; and
- A successful completion of 20 estate agency cases in a year prior to the application.
2. A corporate licence will also be granted to a limited company (corporation) if one of its directors has satisfied with all the licensing requirement as laid down is paragraph B (1) aobve. However there is a limitation that the director cannot act as a director for another licensed corporation. For each corporation, only one licence is required disregarding the number of branches it operates.
3. An individual salesagent or salesperson, disregarding whether he has passed the Common Examination or not, can still work for a licensed corporation.
4. The Common Examination in Singapore was only introduced in the late 1995. In order to look after the old house agents, on arrangement was made that, any person who had been working as a house agent prior to the introduction of the Common Examination, he can apply for a corporate licence within a prescribed period with an exemption of taking the Common Examination. However, the applicant had to prove to the satisfaction of Inland Revenue Authority of Singapore that he had been engaging in estate agency practice before 1 January 1996 and that he had satisfactorily records of service.
5. The ASR has tentatively recommended a central registration system for the individual sales agent or salesperson and is now seeking the views from its members. The purpose is to avoid any individual sales agents orsalesperson working for different licensed corporations and close a case at a corporation in which he would get the highest commission.
1. The Inland Revenue Authority of Singapore conducts the Common Examination for house agents in order to promote and maintain a high level of professionalism among the real estate agents. Any candidate who intends to sit for the examination must have a minimum of 3 O-level asses and be aged 21 or above.
2.The syllabus for the Common Examination comprises 3 core subjects:-
- a. Law of real Property
- Law of Real Property, Contract and Tort, Agency Law, Landlord and Tenants, Property Taxation, Planning and Conservation, Property Rights, and Company Law.
- b. Real Estate Marketing
- Principles of Real Estate Marketing, Marketing of HDB Properties, Marketing of JTC Properties, Marketing of Private Properties,Marketing of Residential Properties Under Construction, Marketing of Commercial Properties Under Construction, and Marketing of Investment and other Properties.
- c. Professional Practice and Management
- Real Estate Market, Code of Conduct and Ethics, Real Estate and other Forms of Investment, Business Management, Development and Office Management, and Real Estate Finance and Analysis.
3. The courses for the Common Examination for House Agents syllabuses are conducted by ASR or other institutions in Singapore.
4.Each course will run for 3 months and would cover all the syllabus before a candidate can sit for the Examinations.
1. In Singapore, there is no specific legislation dealing with the estate/house agents. The Property Tax Division of the Inland Revenue Authority of Singapore is the only department of the Singapore Government responsible for setting out polices to govern the house/estate agents. Whenever there is any proposed new policy of the Inland Revenue Authority of Singapore, it will first pass to ASR for comments. As a result, there is a close relationship between the Inland Revenue Authority of Singapore and the ASR. In fact ASR is acting as a consultation body for the Inland Revenue Authority of Singapore.
2. The Common Examinations for House Agents is conducted by the Inland Revenue Authority of Singapore, and ASR is a member of its Examination Board. ASR will also be responsible for the setting, reviewing, and marking of examination papers.
3. In Singapore, any individual who intends to set up his business as a house agent has to be a member of ASR or other equivalent association.
1. Since all the estate/house agents are mandatory to be a member of ASR or other equivalent association in Singapore, they will be subject to a code of professional conduct and ethics of their respective association. To take the example of ASR, ASR will have the power in accordance with its constitution to take disciplinary action against its members if a member commits a breach of the Code of Professional Conduct and Ethics, or the rules or regulations of ASR. The course of disciplinary action taken by ASR may include one or more of thefollowing:-
- Reprimand such member in writing.
- Suspend such member for such period not exceeding one (1) year as it deems fit,
- Expel such member from the ASR,
- Recommend to the Licensing Authority for cancellation or suspension of such member's Corporate Licence.
- Table such other course of actions as the Executive Council of ASR deem appropriate.
2. The Authority in Singapore has empowered ASR to conduct investigation on any complaint against its members, or non-members. As soon as the investigation is finished, ASR may make a recommendation to the Authority for the appropriate course of actions to be taken against the respondent. All the cost of the investigations is borne by ASR.
3. In the event that if a member is found to have committed a willful fraud or cheating which involves a criminal element, the case will be referred to other authorities for further investigation. In such cases there may be further legal action including prosecution taken against the respondent which depends on the nature of the breach/offence committed.
1. According to the code of Professional Conduct and Ethics of ASR an estate/house agent shall not accept commission from more that one party in the same transaction, even if permitted by law, without the prior notice or consent of all parties to the transaction.
2. In 1974, the Singapore Government gazzetted that the Commission charged by a real estate agent for the closing of a sale and purchase of private property is 2%. However, owing to the keen competition among the estate/house agents, the aforesaid scale of commission has been reduced to1%- 2% through negotiation between the parties which said and the commission is normally paid by the Purchases. However, the commssion for sale and purchase of public properties, the commission is more than 2%.
3. For the leasing of premise, the estate/house agents will charge the landlord one (1) month's rental as commission for the service rendered.
The advertising of any property for sale/lease is governed by a Code of Professional Conduct and Ethics. The Code of Professional Conduct and Ethics of ASR laid down that a house/estate agent shall be careful at all times to present a true pricture in his advertising and representations to the public. A house/estate agent should ensure that his status as a house/estate agent is clearly identifiable in any such advertising or representations.
A house/estate agent is required to submit his audited accounting report to the Inland Revenue Authority of Singapore for tax purpose. There in no requirement for a house/estate agent to submit the said accounting report, or stockeholders account to ASR or any other authority in Singapore for inspection.
In Singapore there is no specific legislation governing the profession of house/estate agent. Their profession is governed by a well organised, and self-disciplined house/estate agent association, namely the Association of Singapore Realtors, having a status of a professional body.
It is a normal practice in Singapore that all the property transactions are conducted through the house/estate agent despite that an owner/landlower can sell/lease his own property by himself. The public prefers to close a case through a house/estate agent where all the information of the property is provided and where the service is guaranteed.
In terms of costs and efficiency in administering the house/estate agent, the system in Singapore has proved to be very successful. In additions there is a good cooperation between the lawyer and the house/estate agent in that the commission of the house/estate is collected through the lawyer. This would have avoid any default in the payment of commission.
The syllabuses of the Common Examination has provided each house/estate agent with the professional knowledge, both legal and practical before he would stand practicing as a house/estate agent, where the uniformity of knowledge for the practice is maintained. By being required to be a member of a ASR or other similar association, the conduct and performance of each house/estate agent is also guaranteed.
Prepared by:
Tang Hoi Tung
Li Man Pong
Last Updated on 17 Apr, 1997
