It has taken a High Court judgment to amplify an alarm that something is rotten in the real estate business. Justice Choo Han Teck said this week in a civil action, over which he found for the plaintiffs against ERA Realty Network, that property agents owed their primary duty of care to their client, not to themselves or to third parties related to them. It is an indictment of the trade and a comment on the shambles of its self-policing, that a judge needed to remind practitioners of what is commonsensical, so as to avoid conflicts of interest.
What ought to follow the development is a policy review by the Inland Revenue Authority, which licenses real estate agencies but, oddly, not individual agents. The objective should be legislation to professionalise the practice and subject violators to statutory penalties in the form of fines, suspension or a permanent ban. The only way ethical conduct can be entrenched is to require people wanting to be property brokers to pass a common national-level written test to obtain a licence. Practitioners will be subject to a professional code, with obligations, responsibilities and forms of censure spelt out.
Just now, the trade is a jumble of in-house courses, half-hearted tests that no one takes seriously, and non-existent censure for such common infractions as misleading clients, abetting payment of kickbacks and gross misconduct, as in the case Justice Choo heard. An agent sacked for questionable practices can work for another firm. And anybody can be an agent. During the last boom in 2007, numbers swelled to about 30,000. Complaints to the consumers’ association against shoddy service peaked that year, no surprise as brokerages and agents were in a race to make easy money. Many were nomads, who shipped out as soon as deals thinned.
It is partly the absence of a professional compliance code that has rendered the vocation vulnerable to abuse. It is an abysmal state of affairs that agents can work unregulated in a sector whose value to the economy is reckoned in the billions of dollars. It need scarcely be said that home ownership also defines Singaporeaness, a bedrock value of citizenship.
Until the vocation is tightened and even after, consumers have also a duty to themselves to not rely on an agent completely. In the case before Justice Choo, the plaintiffs, Mr. and Mrs Yuen Chow Hin, could have saved themselves grief if they had obtained an independent valuation of the flat they were selling. Their agent not only gave them a low, false value but also did not advertise the flat for sale. The shabbiness could not have happened if there was an enforceable compliance code.
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Urgent: Laws to tighten property brokerage trade
7 February 2009
It has taken a High Court judgment to amplify an alarm that something is rotten in the real estate business. Justice Choo Han Teck said this week in a civil action, over which he found for the plaintiffs against ERA Realty Network, that property agents owed their primary duty of care to their client, not to themselves or to third parties related to them. It is an indictment of the trade and a comment on the shambles of its self-policing, that a judge needed to remind practitioners of what is commonsensical, so as to avoid conflicts of interest.
What ought to follow the development is a policy review by the Inland Revenue Authority, which licenses real estate agencies but, oddly, not individual agents. The objective should be legislation to professionalise the practice and subject violators to statutory penalties in the form of fines, suspension or a permanent ban. The only way ethical conduct can be entrenched is to require people wanting to be property brokers to pass a common national-level written test to obtain a licence. Practitioners will be subject to a professional code, with obligations, responsibilities and forms of censure spelt out.
Just now, the trade is a jumble of in-house courses, half-hearted tests that no one takes seriously, and non-existent censure for such common infractions as misleading clients, abetting payment of kickbacks and gross misconduct, as in the case Justice Choo heard. An agent sacked for questionable practices can work for another firm. And anybody can be an agent. During the last boom in 2007, numbers swelled to about 30,000. Complaints to the consumers’ association against shoddy service peaked that year, no surprise as brokerages and agents were in a race to make easy money. Many were nomads, who shipped out as soon as deals thinned.
It is partly the absence of a professional compliance code that has rendered the vocation vulnerable to abuse. It is an abysmal state of affairs that agents can work unregulated in a sector whose value to the economy is reckoned in the billions of dollars. It need scarcely be said that home ownership also defines Singaporeaness, a bedrock value of citizenship.
Until the vocation is tightened and even after, consumers have also a duty to themselves to not rely on an agent completely. In the case before Justice Choo, the plaintiffs, Mr. and Mrs Yuen Chow Hin, could have saved themselves grief if they had obtained an independent valuation of the flat they were selling. Their agent not only gave them a low, false value but also did not advertise the flat for sale. The shabbiness could not have happened if there was an enforceable compliance code.
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