LMA RES Course PAPER 2 Book v2.1 nov 2023 PDF

Summary

This document is a Real Estate Salesperson (RES) course book, focusing on competency units concerning regulations, marketing, and property transactions. It covers the Estate Agents Act, regulations, and the functions of real estate salespersons. It contains multiple units and a table of contents for easy navigation.

Full Transcript

REAL ESTATE SALESPERSON (RES) COURSE PAPER TWO COMPETENCY UNIT 3 Regulation of Real Estate Agency Industry & Real Estate Marketing COMPETENCY UNIT 4 Property Transactions DISCLAIMER While efforts are put in by Lif...

REAL ESTATE SALESPERSON (RES) COURSE PAPER TWO COMPETENCY UNIT 3 Regulation of Real Estate Agency Industry & Real Estate Marketing COMPETENCY UNIT 4 Property Transactions DISCLAIMER While efforts are put in by Life Mastery Academy to ensure that this Real Estate Salesperson (RES) Course Book (hereinafter “this book”) are as reliable and accurate as possible for the RES Exams. Learners are advised to keep updated with the latest changes of policies, regulations, terms and definitions related to the real estate industry. The course provider, its staffs and trainers shall not be held liable for any incomplete, inaccurate, improper or incorrect use of this book. Kindly write to us at [email protected] for any error arise or mistake in this book so we can review and make the necessary amendment. Copyright © 2020, 2021, Life Mastery Academy. All rights reserved. This document is provided for supplementary use and guidance of learners for RES Course with Life Mastery Academy (LMA). Any other use of this document or parts thereof, including reproduction, publication, distribution, transmission, re-transmission or public showing, or storage in a retrieval system in any form, electronic or otherwise, for purposes other than that expressly stated above without the express permission of LMA is strictly prohibited. For any feedback about this glossary, please email [email protected] Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 1 Version Control Record Version Effective Date Changes Author Editor 1.0 13 Mar 2020 Update policies/regulation LMA John Yong 1.1 27 Oct 2021 CPD Generic & PLH LMA Patrick Ong Changes in ABSD, TDSR, 1.2 25 Dec 2021 LMA Patrick Ong & LTV for HDB Loan Changes in Property Tax 1.3 18 Feb 2022 LMA Patrick Ong & GST New ABSD (Trust) & ACD 1.4 09 May 2022 LMA Patrick Ong (Trust) Changes in HDB SERS 1.5 17 June 2022 LMA Patrick Ong MOP Additional HDB SERS 1.6 10 July 2022 LMA Patrick Ong Rehousing Options Changes in BSD and 1.7 15 Mar 2023 LMA Patrick Ong HDB Housing Grants Changes in ABSD & HDB 1.8 26 May 2023 LMA Patrick Ong Flat Eligibility Replacement of HLE with 1.9 08 June 2023 LMA Patrick Ong HFE Announcment of new 2.0 20 Aug 2023 HDB flat classification LMA Patrick Ong system HFE extends validity 2.1 04 Nov 2023 LMA Patrick period to 9 Months Copyright © 2020, 2021, Life Mastery Academy. All rights reserved. This document is provided for supplementary use and guidance of learners for RES Course with Life Mastery Academy (LMA). Any other use of this document or parts thereof, including reproduction, publication, distribution, transmission, re-transmission or public showing, or storage in a retrieval system in any form, electronic or otherwise, for purposes other than that expressly stated above without the express permission of LMA is strictly prohibited. For any feedback about this glossary, please email [email protected] Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 2 Table of Contents REGULATIONS OF REAL ESTATE AGENCY INDUSTRY & REAL ESTATE MARKETING............. 8 OVERVIEW...................................................................................................................................... 8 CU 3 – Regulations of Real Estate Agency Industry & Real Estate Marketing............................... 9 UNIT 3.1 REGULATION OF REAL ESTATE AGENCY INDUSTRY.................................................. 9 LEARNING OUTCOME................................................................................................................... 9 3.1.1 UNDERSTAND THE BACKGROUND AND RATIONALE FOR THE ENACTMENT OF ESTATE AGENTS ACT (EAA) 2010 AND REGULATIONS, AND THE FORMATION OF THE COUNCIL FOR ESTATE AGENCIES (CEA)................................................................................. 10 3.1.2 UNDERSTAND PROVISIONS IN EAA THAT CONCERN SALESPERSONS, INCLUDING THE FOLLOWING:................................................................................................... 12 3.1.3 UNDERSTAND OFFENCES AND CORRESPONDING PENALTIES UNDER EAA AND THE VARIOUS REGULATIONS.................................................................................................... 16 3.1.4 COMPLY WITH ESTATE AGENTS (LICENSING & REGISTRATION) REGULATIONS; IN PARTICULAR THE REGISTRATION REQUIREMENTS FOR SALESPERSONS.................. 18 3.1.5 COMPLY WITH THE ESTATE AGENTS (ESTATE AGENCY WORK) REGULATIONS, INCLUDING THE FOLLOWING.................................................................................................... 22 3.1.6 UNDERSTAND THE CODE OF PRACTICE FOR ESTATE AGENTS AND DESCRIBE THE DUTIES OF ESTATE AGENTS IN RESPECT OF MANAGEMENT AND SUPERVISION, ESTATE AGENT CARD, CLAIMS AND COMPLAINTS, AND RETEN......................................... 28 3.1.7 KEEP ABREAST OF AND COMPLY WITH ALL APPLICABLE LAWS, PRACTICE CIRCULARS AND GUIDELINES IN RELATION TO ESTATE AGENCY WORK, E.G. PROFESSIONAL SERVICE MANUAL (PSM)............................................................................... 31 3.1.8 KEEP ABREAT OF AND COMPLY WITH ALL APPICABLE NEWS, PRACTICE CIRCULARS AND GUIDELINES RELATING TO CEA’s CODE OF ETHICS AND PROFESSIONAL CLIENT CARE [Cross-refer to PSM]................................................................ 31 3.1.9 THE SIGNIFICANT COURT PROSECUTION AND DISCIPLINARY CASES RELATED TO ESTATE AGENCY WORK AS REPORTED IN CEA’S WEBSITE AND UNDERSTAND WHAT PROVISIONS OF THE EAA ITS SUBSIDIARY REGULATIONS HAVE BEEN CONTRAVENED (Source: https://www.cea.gov.sg/consumers/revoked-estate-agent-suspended-salesperson).... 35 3.1.10 UNDERSTAND CEA’S MECHANISMS OF COMPLAINTS HANDLING & DISPUTE RESOLUTION SCHEME (DRS) THROUGH MEDIATION AND ARBITRATION (including the requirement to initiate action in DRS before going to small claims tribunals)............................... 37 3.1.11 UNDERSTAND THE DISPUTE RESOLUTION PROCESS, THE AVAILABLE MEDIATION AND ARBITRATION CENTRES............................................................................... 39 UNIT 3.2 ROLE AND FUNCTIONS OF SALESPERSONS AND THEIR REQUISITE KNOWLEDGE AND SKILLS..................................................................................................................................... 41 Learning Outcomes........................................................................................................................ 41 3.2.1 DESCRIBE THE STAGES AND PROCESS OF A TYPICAL SALE OR LEASE TRANSACTION............................................................................................................................. 41 3.2.2 RECOGNISE CUSTOMERS’ EXPECTATION OF SALESPERSONS............................. 44 3.2.3 BE COGNISANT OF THE ROLE AND FUNCTIONS OF SALESPERSONS (E.G. IN TERMS OF INTRODUCTION, INSTRUMENTALITY AND EFFECTIVE CAUSE) AND THE KNOWLEDGE AND SKILL SETS REQUIRED OF THEM FROM MARKETING AND NEGOTIATION TO ASSISTING CLIENTS IN ENTERING INTO A CONTRACT FOR SALE OR LEASE 47 Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 3 3.2.4 USE AVAILABLE RESOURCES TO VERIFY DETAILS OF PROPERTY (OWNERSHIP AND ENCUMBRANCES, IF ANY)................................................................................................. 54 3.2.5 KEEP ABREAST OF THE LATEST DEVELOPMENTS IN THE PROPERTY MARKET, AND GOVERNMENT LEGISLATION AND REGULATIONS PERTAINING TO ESTATE AGENCY WORK, INCLUDING AND NOT LIMITED TO:.............................................................................. 58 UNIT 3.3 PRINCIPLES OF REAL ESTATE MARKETING............................................................... 74 Learning Outcomes........................................................................................................................ 74 3.3.1 TRUE MEANING OF MARKETING.................................................................................. 74 3.3.2 MARKET SEGMENTATION............................................................................................. 75 3.3.3 MARKET TARGETING..................................................................................................... 76 3.3.4 MARKET POSITIONING (FOR EACH TARGET SEGMENT).......................................... 76 3.3.5 DEVELOPING MARKETING MIX FOR EACH TARGET SEGMENT............................... 76 3.3.6 CONSUMER BUYING DECISION PROCESS................................................................. 77 3.3.7 METHODS TO QUALIFY PROSPECTIVE CUSTOMERS............................................... 80 3.3.8 IMPORTANCE OF MARKETING RESEARCH................................................................. 81 3.3.9 MARKETING STRATEGY................................................................................................ 82 UNIT 3.4 TYPES OF LISTING.......................................................................................................... 84 Learning Outcomes........................................................................................................................ 84 3.4.1 LISTING AND ITS IMPORTANCE.................................................................................... 84 3.4.2 DUTIES AND RIGHTS IN OPEN/ EXCLUSIVE LISTING................................................. 85 UNIT 3.5 METHODS OF SALE........................................................................................................ 85 Learning Outcomes........................................................................................................................ 85 3.5.1 TYPES............................................................................................................................... 85 3.5.2 CHOICE OF SELLING METHODS................................................................................... 86 UNIT 3.6 REGULATIONS ON ADVERTISEMENTS........................................................................ 87 Learning Outcomes........................................................................................................................ 87 3.6.1 DUTIES IN RESPECT OF ADVERTISEMENT UNDER CEPCC (CODE OF ETHICS AND PROFESSIONAL CLIENT CARE)................................................................................................. 87 3.6.2 PRACTICE GUIDELINES ON ETHICAL ADVERTISING FOR MARKETING LOCAL AND FOREIGN PROPERTIES.............................................................................................................. 88 3.6.3 OTHER LAWS PERTAINING TO ADVERTISING PROPERTIES................................... 90 3.6.4 COMPLIANCE WITH PERSONAL DATA PROTECTION ACT 2012............................... 95 UNIT 3.7 MARKETING OF RESIDENTIAL PROPERTY.................................................................. 95 Learning Outcomes........................................................................................................................ 95 3.7.1 REASONS FOR SELLING RESIDENTIAL PROPERTY.................................................. 96 3.7.2 FACTORS THAT AFFECT THE PRICING OF A RESIDENTIAL PROPERTY................ 96 3.7.3 SPECIAL CONSIDERATIONS IN MARKETING RESIDENTIAL PROPERTY................. 96 3.7.4 METHOD OF SALE........................................................................................................... 97 3.7.5 MARKETING STRATEGY................................................................................................ 97 3.7.6 COMPLIANCE WITH GUIDELINES................................................................................. 98 UNIT 3.8 MARKETING OF COMMERCIAL PROPERTY................................................................. 98 Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 4 Learning Outcomes........................................................................................................................ 98 3.8.1 PLAYERS IN COMMERCIAL PROPERTY MARKET....................................................... 98 3.8.2 TYPE OF COMMERCIAL PROPERTIES......................................................................... 99 3.8.3 FACTORS THAT AFFECT PRICE OF STRATA-TITLED COMMERCIAL PROPERTY 100 3.8.4 SPECIAL CONSIDERATIONS IN MARKETING COMMERCIAL PROPERTY.............. 102 3.8.5 METHOD OF SALE......................................................................................................... 103 3.8.6 MARKETING STRATEGY.............................................................................................. 104 3.8.7 COMPLIANCE WITH GUIDELINES............................................................................... 104 UNIT 3.9 MARKETING OF INDUSTRIAL PROPERTY.................................................................. 107 Learning Outcomes...................................................................................................................... 107 3.9.1 PLAYERS IN INDUSTRIAL PROPERTY MARKET........................................................ 107 3.9.2 TYPES OF OCCUPATION & PROPERTY TENURE..................................................... 108 3.9.3 FACTORS THAT AFFECT PRICING OF A STRATA-TITLED INDUSTRIAL PROPERTY 109 3.9.4 SPECIAL CONSIDERATIONS IN MARKETING INDUSTRIAL PROPERTIES............. 109 3.9.5 METHOD OF SALE......................................................................................................... 110 3.9.6 MARKETING STRATEGY.............................................................................................. 110 3.9.7 COMPLIANCE WITH GUIDELINES............................................................................... 110 UNIT 3.10 MARKETING OF SPECIAL PROPERTY...................................................................... 112 Learning Outcomes...................................................................................................................... 112 3.10.1 LEISURE PROPERTY VS. CONVENTIONAL COMMERCIAL PROPERTY............. 112 3.10.2 Factors Crucial to Marketing of Hotels........................................................................ 112 3.10.3 CONSERVATION PROPERTIES............................................................................... 113 UNIT 3.11 CONSUMER PROTECTION (FAIR TRADING) ACT.................................................... 116 Learning Outcomes...................................................................................................................... 116 3.11.1 THE ACT AND ITS APPLICATION TO REAL ESTATE............................................. 116 3.11.2 UNFAIR PRACTICES IN REAL ESTATE TRANSACTIONS...................................... 116 3.11.3 CONSUMERS’ RECOURSE FOR UNFAIR PRACTICES.......................................... 117 PROPERTY TRANSACTIONS........................................................................................................... 118 Overview...................................................................................................................................... 118 CU 4 – PROPERTY TRANSACTIONS.............................................................................................. 119 UNIT 4.1 SALE OF UNCOMPLETED PRIVATE PROPERTIES.................................................... 119 Learning Outcomes...................................................................................................................... 119 4.1.1 THE HOUSING DEVELOPERS (CONTROL & LICENSING) ACT AND RULES........... 119 4.1.2 SALE OF COMMERCIAL PROPERTIES (SCP) ACT AND RULES.............................. 135 4.1.3 HOUSING DEVELOPERS (CONTROL AND LICENSING) ACT AND RULES VS. SALE OF COMMERCIAL PROPERTIES ACT AND RULES................................................................ 135 UNIT 4.2 SALE OF COMPLETED PRIVATE PROPERTIES......................................................... 136 Learning Outcomes...................................................................................................................... 136 4.2.1 CAVEAT EMPTOR AND DUTY OF DISCLOSURE....................................................... 137 4.2.2 MISREPRESENTATION AND LIABILITIES [Cross-refer to Paper 1, Unit 2.1.4].......... 137 Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 5 4.2.3 SALE PROCEDURE OF COMPLETED PRIVATE PROPERTIES................................. 137 4.2.4 VARIOUS FORMALITIES............................................................................................... 142 4.2.5 LAWFUL HANDLING OF TRANSACTION MONIES [Cross-refer to L10, Unit 3.1.5]... 142 4.2.6 LEGAL REQUISITION AND ITS PURPOSES................................................................ 142 4.2.7 UNDERSTANDING STRATA LIVING............................................................................. 143 4.2.8 RIGHTS AND DUTIES OF SELLERS AND BUYERS.................................................... 146 4.2.9 CONDITIONS OF SALE 2020........................................................................................ 146 UNIT 4.3 COLLECTIVE SALE OF PRIVATE PROPERTIES......................................................... 149 Learning Outcomes...................................................................................................................... 149 4.3.1 COLLECTIVE SALE........................................................................................................ 150 4.3.2 TYPES OF DEVELOPMENTS........................................................................................ 150 4.3.3 REQUISITE CONSENT LEVELS.................................................................................... 151 4.3.4 COLLECTIVE SALE PROCEDURE................................................................................ 152 4.3.5 PROCEDURE FOR APPLYING...................................................................................... 152 4.3.6 FAILED ATTEMPT AND CONDITIONS FOR SUBSEQUENT ATTEMPT..................... 154 4.3.7 JUDICIAL POWER OF STRATA TITLE BOARDS AND HIGH COURT......................... 154 4.3.8 LEGAL POSITION OF AFFECTED TENANT................................................................. 155 UNIT 4.4 SALE OF HDB FLATS..................................................................................................... 156 Learning Outcomes...................................................................................................................... 156 4.4.1 ROLE OF HDB................................................................................................................ 156 4.4.2 PUBLIC HOUSING OPTIONS........................................................................................ 157 4.4.3 ALLOCATION POLICY AND PRIORITY SCHEME........................................................ 160 4.4.4 ELIGIBILITY CRITERIA.................................................................................................. 163 4.4.5 ASCERTAIN SELLER/S’ ELIGIBILITY TO SELL........................................................... 190 4.4.6 HDB FLAT PORTAL........................................................................................................ 196 4.4.7 HDB’S PRESCRIBED OPTION TO PURCHASE (OTP)................................................ 198 4.4.8 RESALE APPLICATION AND PROCESS...................................................................... 202 4.4.9 HDB Flats as Security/ Collateral.................................................................................... 205 UNIT 4.5 LEASING OF PRIVATE PROPERTIES......................................................................... 205 Learning Outcomes...................................................................................................................... 205 4.5.1 URA RULES ON PRIVATE APARTMENT LEASING..................................................... 206 4.5.2 VERIFY LEGAL OWNERSHIP OF LANDLORD............................................................. 206 4.5.3 VERIFY IMMIGRATION / EMPLOYMENT STATUS OF FOREIGN TENANTS............. 207 4.5.4 DETERMINING WHICH PARTY PAYS TAXES AND FEES.......................................... 207 4.5.5 BE COGNISANT OF THE CLAUSES IN THE LETTER OF INTENT (LOI) AND COLLECTION OF GOODFAITH DEPOSIT OR ACT FOR LANDLORD IN FINDING TENANT 209 4.5.6 ADVISE ON THE TERMS IN THE TENANCY AGREEMENT TO THE LANDLORD AND TENANT....................................................................................................................................... 209 4.5.7 ADVISE CLIENT ON UTILITIES APPLICATION, HANDING/TAKING OVER PREMISES, AND INVENTORY....................................................................................................................... 210 UNIT 4.6 RENTING OUT OF HDB FLATS/ BEDROOMS.............................................................. 211 Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 6 Learning Outcomes...................................................................................................................... 211 4.6.1 ASCERTAIN LANDLORD’S ELIGIBILITY TO RENT OUT THE WHOLE HDB FLAT.... 211 4.6.2 VERIFY IMMIGRATION/EMPLOYMENT STATUS OF FOREIGN TENANTS............... 212 4.6.3 HDB RULES ON RENTING OUT OF FLAT/ BEDROOM............................................... 213 4.6.4 DETERMINE WHO PAYS FOR – STAMP DUTY, AND HOW AND WHERE TO STAMP – PROPERTY TAX – SERVICES & CONSERVANCY CHARGES................................................ 217 4.6.5 ADVISE ON THE TERMS IN THE TENANCY AGREEMENT TO LANDLORD & TENANT 217 4.6.6 ADVISE CLIENT ON UTILITIES APPLICATION, HANDING/TAKING OVER PREMISES, AND INVENTORY LIST............................................................................................................... 217 UNIT 4.7 FOREIGN WORKER HOUSING..................................................................................... 219 Learning Outcomes...................................................................................................................... 219 4.7.1 STATUTORY REQUIREMENTS FOR FOREIGN WORKER ACCOMMODATION....... 219 4.7.2 LIST OF APPROVED FOREIGN WORKER HOUSING................................................. 220 4.7.3 LATEST DEVELOPMENTS IN MOM’S RULES AND REGULATIONS ON FOREIGN WORKER HOUSING................................................................................................................... 222 4.7.4 IMMIGRATION ACT IN RELATION TO DUE DILIGENCE CHECKS AGAINST IMMIGRATION OFFENDERS..................................................................................................... 223 UNIT 4.8 TAXES ON PROPERTY.................................................................................................. 223 Learning Outcomes...................................................................................................................... 223 4.8.1 PROPERTY TAX............................................................................................................. 224 4.8.2 INCOME TAX.................................................................................................................. 228 4.8.3 GOODS AND SERVICES TAX (GST)............................................................................ 230 4.8.4 STAMP DUTY................................................................................................................. 233 UNIT 4.9 PROPERTY FINANCE AND FINANCIAL CALCULATION............................................. 255 Learning Outcomes...................................................................................................................... 255 4.9.1 READILY AVAILABLE CASH......................................................................................... 256 4.9.2 CPF HOUSING GRANT.................................................................................................. 256 4.9.3 CPF ORDINARY ACCOUNT (CPF-OA) SAVINGS........................................................ 269 4.9.4 MORTGAGE LOAN......................................................................................................... 275 4.9.5 HDB RESALE LEVY....................................................................................................... 288 4.9.6 FINANCIAL COMPUTATION.......................................................................................... 290 4.9.7 COMPUTATION OF SALES PROCEED........................................................................ 292 4.9.8 Contra.............................................................................................................................. 292 Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 7 COMPETENCY UNIT 3 REGULATIONS OF REAL ESTATE AGENCY INDUSTRY & REAL ESTATE MARKETING OVERVIEW With the introduction of the Estate Agents Act 2010 (EAA) and formation of the Council for Estate Agencies (CEA) in Oct 2010, a statutory framework has been established to provide laws and regulations and clear guidance to raise the professional standards of the real estate agency industry, and to safeguard consumer interests. High expectations have been placed on the real estate salespersons’ (RES’) domain knowledge and their professional and ethical practices. The engagement of estate agents (REAs) and salespersons (RES) in real estate transactions necessitates the understanding of the various rules and regulations pertaining to property transactions from the initial marketing stage till legal completion. Real estate salespersons (RES) are expected to know the principles of marketing, advertising and promotion, and types of listing, and to recommend suitable methods of sale, for each type of property. They also need to know and comply with the relevant regulatory requirements and guidelines governing the marketing aspect of various types of properties. These include CEA’s Code of Ethics and Professional Client Care, CEA’s Practice Guidelines on Ethical Advertising, Personal Data Protection Act (PDPA), Consumer Protection (Fair Trading) Act, and BCA, HDB, URA’s regulations and guidelines. Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 8 CU 3 – Regulations of Real Estate Agency Industry & Real Estate Marketing UNIT 3.1 REGULATION OF REAL ESTATE AGENCY INDUSTRY LEARNING OUTCOME At the end of this Unit, the course participants should be able to: Understand the background and rationale for the enactment of Estate Agents Act (EAA) 2010 and regulations, and the formation of the Council for Estate Agencies (CEA). Understand provisions in EAA that concern salespersons (RES), including: o Principal functions and general powers of CEA o Scope of EAA, and the meaning of property, estate agent (EAs), salesperson (RES) and estate agency work (EAW). o Licensing of estate agents (EAs) and registration of salespersons (RES); suspension and revocation of licence and registration o Duties of salespersons (RES) o Inspection, enforcement, discipline and offences Understand offences and corresponding penalties under EAA and the various Regulations, e.g. Regulation of Estate Agency Work 5(3) where any person who contravenes paragraph (1) shall be guilty of an offence and liable on conviction to a fine not exceeding $25,000 or to imprisonment for a term not exceeding 12 months or to both. Comply with the Estate Agents (Licensing & Registration) Regulations; in particular the registration requirements for salespersons (RES), including the fulfillment of continuing professional development (CPD). Comply with the Estate Agents (Estate Agency Work) Regulations, including: o Ban on Dual Representation o No Referrals to Moneylenders o No holding of Transaction Monies o Usage of Council Symbols and Representation o Display of Estate Agent Card o Use of prescribed Estate Agency Agreements o Professional Indemnity Insurance (PII) requirements o CPD requirements Understand the Code of Practice for Estate Agents and describe the duties of estate agents (EAs) in respect of management and supervision, estate agent card, claims and complaints, and retention of documents and records. Keep abreast of and comply with all applicable laws, practice circulars and guidelines in relation to estate agency work (EAW), such as Professional Service Manual (PSM) Keep abreast of and comply with all applicable laws, practice circulars and guidelines relating to CEA’s Code of Ethics and Professional Client Care (CEPCC) [Cross-refer to PSM], including but not limited to the following: o General duty to clients and public (include communicating all offers to clients in a timely manner, act in the best interest of clients, updating clients on development and issues pertaining to the transactions) o Not to bring discredit or disrepute to real estate industry o Duty in respect of agreements o Duty in respect of advertisements (including outdoor advertising). [Cross-refer to Practice Guidelines on Ethical Advertising and be conversant with the required information to include, such as salesperson’s name or business name as stated in the public register]. o Recommending professional advice to clients where appropriate o Duty to avoid conflict of interests Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 9 o Safeguarding confidential information Discuss the significant court prosecution and disciplinary cases related to estate agency work (EAW) as reported in CEA’s website and understand what provisions of the EAA and its Subsidiary Legislations (i.e. Regulations) have been contravened Understand CEA’s mechanisms of o Handling complaints o Dispute Resolution Scheme (DRS) through Mediation and Arbitration (including the requirement to initiate action in DRS before going to Small Claims Tribunals) o Understand the dispute resolution process, the available Mediation and Arbitration Centre. 3.1.1 UNDERSTAND THE BACKGROUND AND RATIONALE FOR THE ENACTMENT OF ESTATE AGENTS ACT (EAA) 2010 AND REGULATIONS, AND THE FORMATION OF THE COUNCIL FOR ESTATE AGENCIES (CEA) Complaints against real estate agents (EAs) and salespersons (RES) have risen over the years. In 2005, the Consumers Association of Singapore (CASE) received 670 complaints. In 2009, the number of complaints was over 1,070. The most common complaints are that the salespersons (RES) provided unsatisfactory service, were unprofessional in their conduct, misrepresented information, gave wrong advice or used pressure tactics.  Estate Agents (Amendment) Act 2020 The Estate Agents (Amendment) Act 2020 came into effect on 30 July 2021. The EAA amendments aim to: - Better deter errant real estate salesperson and estate agents from committing disciplinary breaches - Update the regulatory framework to keep abreast of technology advancements. o CEA can require any person to furnish electronic devices that can be inspected, copied or extracted for investigations. o Document inspections of EAs can be conducted electronically. o Notice and Documents can be served via electronic means. - Align lever against money laundering and terrorism financing to meet international standards by the inter-government Financial Action Task Force (FATF) o Details of the duties to prevent ML/TF are prescribed in the Estate Agents (Prevention of Money Laundering and Financing of Terrorism) Regulations 2021 (PMLFT Regulations) - Increase the maximum financial penalties that a CEA Disciplinary Committee (DC) can impose o Increase from $75,000 to $200,000 per case for EAs and to $100,000 per case for RESs - Introduces a NEW Letter of Censure (LOC) Disciplinary Regime for minor disciplinary breaches o CEA can issue a LOC and impose financial penalties of up to $5,000 per case for minor disciplinary breaches without referring the case to DC. - New Estate Agents (Transaction Records) Regulations 2021 (TR Regulations) was introduced o To complement the amendments to the EAA on the Transaction Records Initiative (TRI), details of the information to be collected and published under the TRI regulations. Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 10  Comprehensive Industry Review The Estate Agents Act 2010 (hereinafter ‘EAA’) is the result of a comprehensive industry review carried out by the Ministry of National Development (MND), involving the consumer group, the real estate agencies, agents as well as professionals from related fields. The new law puts in place a robust legislative and regulatory framework to better protect consumer interest and raise the professionalism of the industry. The Act applies to estate agency work (EAW) in respect of property situated in and outside Singapore. The new law and the legislative body it empowers will tackle the persistent problems with a three-pronged regulatory approach as follows: 1) Strong Government Regulation The EAA provides the legislative framework for the following: o To enhance licensing conditions for estate agents (previously known as ‘agencies’); o To introduce registration of estate salespersons (previously known as ‘agents’); o To require mandatory examination and continuing professional development; and o To impose a regulatory Codes of Practice, Ethics & Conduct. These requirements will ensure that estate agents and salespersons fulfill the ’Fit-and-Proper’ criteria, possess the necessary knowledge to provide professional service to their clients, and adhere to ethical practices. The new law confers power for investigation and allows responsive and calibrated disciplinary action to be taken against errant estate agents (EAs) and salespersons (RES). 2) Greater Industry Accountability Under the new law, real estate agents (EAs) must continue to be primarily responsible and accountable for the supervision and control of their business and salespersons (RES). The new regulatory framework requires and empowers the agencies (EAs) to do so more effectively. As such, a Registration Scheme for salespersons (RES) has been set up and all real estate salespersons are to be registered with CEA only, through and with the support of their respective agencies. To allow estate agents (EAs) more effective control over their salespersons (RES), the Act also requires each salesperson (RES) to operate under a written Agency Agreement with only one agent (EA) at any one time. Real estate industry associations (e.g. IEA, SEAA, REDAS and SISV) with their specialised expertise can help agents upgrade, taking into account their specific circumstances. CEA expects the industry associations to play an important role in this area, and will be working with them to put in place plans to develop the sector. 3) Better Consumer Prudence & Education The public must exercise due diligence to engage the right agents (EAs) and salespersons (RES), and to conduct their property transactions prudently and judiciously. CEA will help, by making public education a key part of its work. A Public Register of estate agents (EAs) and salespersons (RES) will be set up. Members of the public can get more information about their agents (EAs) and salespersons (RES) before engaging their services. Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 11 The Online Register will include any records of offences committed and disciplinary actions taken. CEA will also look into seminars, forums and consumer guides to inform consumers about their rights and responsibilities, and equip them with the necessary knowledge for their transactions. Public education is an area where lots more can be done and CEA will do this jointly with CASE, HDB and the industry. 3.1.2 UNDERSTAND PROVISIONS IN EAA THAT CONCERN SALESPERSONS, INCLUDING THE FOLLOWING: The Council for Estate Agencies (CEA), a statutory board under the Ministry of National Development (MND), which aims to raise the professionalism of the real estate agency industry and to better safeguard consumer’s interest, was officially established on 22 October 2010 after Parliament passed the Estate Agents Act (EAA) 2010 on 15 September 2010 which vests power into the legislative body. CEA comprises a President and between 5 and 15 members, to be appointed by the Minister for National Development. The Council is supported by full-time staff in the discharge of its various functions. With the establishment of CEA, the Inland Revenue Authority of Singapore (IRAS) no longer oversees the licensing of estate agents. The CEA is the current authority in implementing the new regulatory framework for the real estate agency industry. Key elements of this framework include enhanced licensing conditions for estate agents (EAs), registration of salespersons (RES), regulation on the conduct of estate agency work (EAW), mechanisms for discipline and dispute resolution, and public education. (a) Functions and Duties Of CEA The new Act has vested in the CEA the following functions and duties: 1) To administrate the licensing and registration regimes under the EAA 2010; 2) To regulate and control the practice of estate agencies (EAs) and real estate salespersons (RES); 3) To promote integrity and competence among estate agencies (EAs) and real estate salespersons (RES) and to maintain or enhance their status; 4) To administer examinations and a professional development framework for the purposes of licensing and registration under the EAA 2010; 5) To develop Codes of Practice, Ethics and Conduct for real estate agencies (EAs) and real estate salespersons (RES); 6) To conduct investigations and disciplinary proceedings in relation to offences and unsatisfactory conduct or misconduct in relation to estate agency work (EAW); 7) To develop measures to equip consumers with the necessary knowledge to conduct their property transactions with prudence and diligence; and 8) To perform such other functions and discharge such other duties as may be conferred on the Council by any written law. (b) General Powers Of CEA The Council has been vested with powers under the Act to suspend, or revoke, the licence of a real estate agency (EA) for a period of time as the Council thinks fit, if the relevant licensee (i.e. The licence holder of the EA): Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 12 1) Has ceased to be engaged in estate agency work (EAW), or is wound up or otherwise dissolved; 2) Is not eligible to hold or continue to hold the licence under the law; 3) Had, in connection with the application for a licence, furnished false or misleading information to the Council; 4) If any certificate or qualification used to support the application for a licence is withdrawn or cancelled; 5) Has contravened any requirements or other provisions of the EAA 2010; 6) Has failed to pay any fine, fee, charge or financial penalty charged or imposed under this Act; 7) Has failed to comply with any of the conditions attached to the licence; or 8) No longer a ’fit-and-proper’ person to hold a licence. A written notice of the proposal to suspend or revoke a licence and the reasons for it will be given to the relevant licensee. The licensee in question is entitled to make a written representation to the Council regarding the proposed suspension. The Council will have the discretion to shorten or lift the suspension after due consideration. (c) Definition Of Estate Agent, Salesperson & Estate Agency Work For the purpose of the EAA 2010, the correct legal term for a business doing estate agency work, commonly known as estate agency, is the “estate agent” (EA); and the individual doing estate agency work (EAW), commonly known as property agent, is called the “Salesperson” (RES) in the Act.  Definition of Estate Agency Work (EAW) Part 1 of the Estate Agents Act (EAA) defines the regulatory scope and covers all aspects of estate agency work (EAW), including: “Introduction and Negotiation for the Buying, Selling and Leasing of property for a third person, and all types of property, including all land and buildings, whether residential, commercial or industrial, whether local or foreign, so long as they are marketed, bought, sold or leased in Singapore”.  Property Developers Not Covered However, persons selling, buying or leasing properties for themselves, including property developers and their employees, WILL NOT be covered under the new framework, as there is NO estate agency work (EAW) involved. (d) Salesperson’s Registration Requirements  All Salespersons To Be Registered o No person can act as a real estate salesperson (RES) for any licensed estate agency (EA), unless he or she is registered with the CEA. o No person shall accept employment or an appointment as a real estate salesperson (RES), or act as a salesperson for any person unless the person holds an estate agency’s licence. Any person who contravenes the EAA shall be guilty of an offence and liable on conviction to a fine up to $25,000 or to imprisonment of up to a year.  Registration Criteria for Real Estate Salespersons Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 13 Under Clause 32 of the Act, no person shall be eligible to be registered as a real estate salesperson (RES), unless he or she is a ‘fit-and-proper’ person and: 1) Is at least 21 years old; 2) Is or will be employed by a licensed real estate agency (EA) as a salesperson (RES) and he or she does not hold a licence as any other real estate agency (EA); 3) Possesses the prescribed educational qualifications or experience; 4) Does not hold and is not an employee, a director or a partner of a person who holds a moneylender’s licence; 5) Complies with requirements including continuing education which apply to him.  Duration Of Registration Under Clause 35 of the Act, an estate agency’s licence and the registration of a real estate salesperson (RES) shall be for a period not exceeding three (3) years.  One Salesperson Cannot Be Registered with More Than One Agency Under Clause 40 of the Act, a real estate salesperson (RES) can only be registered to act for one agency (EA). Any salesperson (RES) caught making false claim of his association or employment with an agency (EA) which does not employ or is not in any lawful way associated with him will be guilty of an offence and liable on conviction to a fine up to $5,000. (e) Duties of Salespersons Estate agents (EAs) and salespersons (RES) are engaged as intermediaries in the sale, purchase and lease of properties and it is essential that they do so professionally and ethically, and act in the best interest of their customers. They must be well acquainted with government rules and procedures, help clients through the whole buying and selling process, give them correct and proper advice, and ensure that their property transactions are smooth.  To abide by Code of Practice, Ethics & Conduct Clause 42 requires estate agents (EAs) and salespersons (RES) to abide by legislated Codes of Practice, Ethics & Conduct. The rules are spelt out in Subsidiary Legislations (i.e. Regulations) which stipulate banning of dual representation by salespersons (RES), proper advertising, and disclosure of conflicts of interest. Failure to observe the Codes may render the estate agent (EA) or salesperson (RES) liable to disciplinary action by the Council. To protect consumers from unfair clauses in listing agreements, salespersons (RES) are allowed to use standard agency agreements (Form 1 ~ 8) prescribed by CEA for property transactions. Those agreements are those between the consumer and the agent (EA), and NOT those between the buyer and seller, or landlord or tenant. (f) Inspection, Enforcement, Discipline And Offences Part 5 of the Estate Agents Act (EAA) deals with inspection, enforcement and discipline and offences concerning real estate agents (EAs) and salespersons (RES).  Appointment of Inspectors Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 14 Clause 45 (1) provides for the appointment of CEA Inspectors (CEA may appoint any of its officers or employees to be an Inspector) to exercise any power under Estate Agents Act. An inspector may, from time to time, enter and inspect the premises under the possession or control of any estate agent (EA) for the purpose of ascertaining compliance under Estate Agents Act. In carrying out an inspection under Estate Agents Act (EAA), an inspector may: 1) Examine any book, document, material or article as he may consider necessary and remove or make copies of it for further examination; 2) Require any person, whether a manager, an employee or a salesperson (RES) of the estate agent (EA) to be present before an inspector or any officer of the Council and to produce the above for further examination; or to furnish any relevant information required by the inspector.  Investigation and Enforcement Powers of Inspectors Clause 48 confers powers to a CEA inspector who has reasonable grounds for believing that an offence under this Act to commence investigations and in the course of which, may 1) At reasonable hours, enter any premises to search and size any book, document, material or article or any machine or equipment containing any book, document, material or article, or make copies thereof as he may consider necessary; 2) Require any person to furnish evidence of his or her identity; 3) Interview any person reasonably believed to be acquainted with the facts or circumstances of the case; and 4) Take photographs or video recording of the premises and persons reasonably believed to be acquainted with the facts or circumstances of the case or with such other matter as the inspector may specify.  Investigations By CEA Clause 50 of Estate Agents Act provides for the Council to appoint one or more inspectors to conduct an investigation into any complaint made or information received.  Disciplinary Matters Part 6 of the Act states that other than the Disciplinary Committee (DC), the Council will also be empowered to revoke or suspend licences or registration if it deems fit. Regulation 5(3) of estate agency work (EAW) stipulates that any person who contravenes paragraph (1) [No salesperson or estate agent who is a natural person shall, in respect of the same property, have as clients both vendor and purchaser or both landlord and tenant] shall be guilty of an offence and liable on conviction to a fine not exceeding $25,000 or to imprisonment for a term not exceeding 12 months or to both.  Disciplinary Panel (DP) Clause 52 of the Estate Agents Act (EAA) states that the Council may, from time to time, appoint from among the members of the Council, a Disciplinary Panel (DP) of up to 20 members including a Head of the Disciplinary Panel.  Disciplinary Committee (DC) Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 15 Estate agents (EAs) and salespersons (RES) who are guilty of unsatisfactory conduct or misconduct or breach the Code of Ethics and Professional Client Care (CEPCC) or the Code of Practice set out in the First and Second Schedules respectively of the Estate Agents (Estate Agency Work) Regulations may be subject to disciplinary action before a Disciplinary Committee (DC). A Disciplinary Committee (DC) comprises at least 3 persons, who are nominated from the Disciplinary Panel (DP) comprising practicing solicitors, architects, engineers or individuals from the real estate industry amongst others. The Disciplinary Committee (DC) may upon hearing the action do the following, as the case may be, in respect of a Respondent: (i) revoke a licence or registration (ii) suspend a licence or registration (iii) impose a financial penalty not exceeding $75,000 (iv) admonish or reprimand the licensee or registered salesperson (v) attach or vary conditions to a licence or registration (Source: https://www.cea.gov.sg/professionals/complaint-disciplinary-management/disciplinary- procedure) 3.1.3 UNDERSTAND OFFENCES AND CORRESPONDING PENALTIES UNDER EAA AND THE VARIOUS REGULATIONS There are two different categories of infringements of laws, i.e. one under the EAA and the other under the Penal Code. (a) Offences under Estate Agents Act (EAA) Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 16 For details: https://www.cea.gov.sg/cea/content/estate_agencies_agents/complaint_discipline/offences.html (b) Criminal offences – Prosecution in Court  For criminal offences, such as operating without a licence or registration, providing false information to the CEA or impeding CEA in its functions, the CEA will prosecute the offenders in Court.  Alleged criminal wrongdoings, such as fraud and cheating, which are not provided for under this Act, will be referred to the Police. Offenders may be liable to fines of up to $75,000 or imprisonment of up to 3 years or both, subject to the type of offence and decisions of the Court. Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 17 3.1.4 COMPLY WITH ESTATE AGENTS (LICENSING & REGISTRATION) REGULATIONS; IN PARTICULAR THE REGISTRATION REQUIREMENTS FOR SALESPERSONS (a) Application for Grant and Renewal of Licence (for EA) Clause 28 of EAA 2010 stipulates that no person shall carry on or advertise his business as a real estate agency (EA), or act as a real estate agency (EA) – EVEN FOR FREE – unless he or she is licensed under the Act. The punishment for such an infringement is a fine of $75,000 or imprisonment for a term up to 3 years or both. The followings also apply to the practising partners in General and Limited Partnerships, and practicing directors in Companies. For foreign applicants, estate agents (EAs) should first check with CEA on the type of employment pass they should possess 1) Application The application for a licence shall be submitted by the *Key Executive Officer (KEO) of the Estate Agent (EA). The KEO is the person who will be responsible for the proper administration and overall management of the business of the estate agent (EA) and the supervision of its salespersons (RES). KEO can be the CEO, COO or MD of the estate agent (EA). 2) Licensing Criteria for New Estate Agents (EAs) (i) The estate agent (EA) must be a registered entity with the Accounting & Corporate Regulatory Authority (ACRA) (ii) The estate agent (EA) must have a Key Executive Officer (KEO) who satisfies the requirements of the Act and Regulations (iii) The estate agent (EA) must not hold a moneylender's licence (iv) None of the estate agent’s (EA’s) directors or partners or sole-proprietor or KEO hold a moneylender's licence, or are an employee, director, or partner of a licensed moneylender (v) The estate agent (EA) is “fit-and-proper”, such as is not in liquidation or wound-up or in receivership, has not entered into a composition or scheme of arrangement with its creditors, does not have any convictions, does not have any judgment that involved a finding of fraud, dishonesty or breach of fiduciary duties entered against it in civil proceedings. (vi) The estate agent’s (EA’s) KEO and all directors or partners or persons responsible for the management must fulfill the “fit-and-proper” criteria [Cross-refer to Unit 3.1.2]. (vii) The estate agent (EA) must have a valid Professional Indemnity Insurance (PII) policy that covers the EA and all its RES. All the partners, where applicable, must also be covered by the PII. (viii) The estate agent (EA) must have standard operating procedures (SOP) and guidelines, such as for training & supervision of RES, complaints-handling & dispute resolution, advertising & printing of publicity materials, protection of confidentiality of clients' information and service standards for its operations. 3) The Appointed KEO of the Estate Agent (EA) Must: (i) Have a minimum of 4 GCE 'O' Levels passes or equivalent (ii) Possess a pass in the Real Estate Agency (REA) exam, or equivalent Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 18 (iii) Be a sole-proprietor, director or partner of the estate agent (EA) (iv) Have at least 3 years working experience under a licensed estate agent (EA) (v) Have concluded at least 30 transactions in the last 3 years as or on behalf of a licensed estate agent (EA) (vi) Not currently be a sole-proprietor, practising director or partner, KEO, or RES of another licensed estate agent (EA) (vii) Not been previously a sole-proprietor, KEO, director or partner of an estate agent (EA) whose licence was revoked (viii) Not hold a moneylender's licence and is not an employee, director, or partner of a licensed moneylender (ix) Not be in arrears with the CPF Board for Medisave contribution. This also applies to directors and partners of the estate agent (EA). (Source: https://www.cea.gov.sg/professionals/estate-agents-licensing-matters) 4) Licence Fee o The application fee for a new licence and renewal of licence is $107 per licence (inclusive of GST). o The annual licence fee* for estate agents (EAs) is shown in the tables below: (Source: https://www.cea.gov.sg/professionals/estate-agents-licensing-matters/apply-for-estate- agent-licence) (i) Annual Licence Fee for All Businesses and Companies (Except General Partnerships and Limited Partnerships) Size of REA (#RES) Annual Licence Fee (excluding GST) 1 ~ 10 $330 11 ~ 30 $660 31 ~ 50 $1,100 51 ~ 500 $2,200 501 ~ 1,000 $3,300 1,001 ~ 2,000 $4,400 2,001 ~ 3,000 $5,500 3,001 ~ 4,000 $6,600 4,001 ~ 5,000 $7,700 5,001 ~ 6,000 $8,800 6,001 ~ 7,000 $9,900 7,001 ~ 8,000 $11,000 Every additional 1,000 RES Increase of $1,100 (or part of 1,000 RES) Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 19 (ii) Annual Licence Fee for General Partnerships and Limited Partnerships Size of REA (#RES) Annual Licence Fee (excluding GST) 1 ~10 $330 + ($230 for each practising partner) 11 ~ 30 $660 + ($230 for each practising partner) 31 ~ 50 $1,100 + ($230 for each practising partner) 51 ~ 500 $2,200 + ($230 for each practising partner) 501 ~ 1,000 $3,300 + ($230 for each practising partner) 1,001 ~ 2,000 $4,400 + ($230 for each practising partner) 2,001 ~ 3,000 $5,500 + ($230 for each practising partner) 3,001 ~ 4,000 $6,600 + ($230 for each practising partner) 4,001 ~ 5,000 $7,700 + ($230 for each practising partner) 5,001 ~ 6,000 $8,800 + ($230 for each practising partner) 6,001 ~ 7,000 $9,900 + ($230 for each practising partner) 7,001 ~ 8,000 $11,000 + ($230 for each practising partner) Every additional 1,000 RES Increase of $1,100 + ($230 for each practising (or part of 1,000 RES) partner) (b) Application for Grant and Renewal of Registration (for RES) The followings also apply to the practising partners in General and Limited Partnerships, and practising directors in Companies. For foreign applicants, estate agents should first check with CEA on the type of employment pass they should possess 1) Application Individuals who are interested to apply for registration as salespersons (RES) are required to fulfill the registration criteria before they submit their registration application to CEA through their licensed estate agent (EA). Estate agents (EAs) will need to submit the salesperson (RES) registration application request via CEA’s e-services. The registering salesperson (RES) will have to log in to CEA’s e-services to complete the application after receiving an auto generated email from CEA. Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 20 2) Registration Criteria for Salespersons (RES) (i) Must be a Singaporean (SC) or a Singapore Permanent Resident (SPR) for over 10 years. (a) If the applicant is a SPR for less than 10 years, will be required to submit either a Certificate of No Criminal Conviction or a proof of stay in Singapore for 10 years or more. (b) If the applicant is a foreigner, the estate agent (EA) must approach CEA for a preliminary assessment of his registration eligibility and submit the required supporting documents e.g. type of Employment Pass (EP) held. The applicant must also fulfil all other salesperson registration criteria as shown below (ii) Must be at least 21 years old (iii) Must have a minimum of 4 GCE 'O' Levels passes or equivalent (a) The applicant may also submit his qualifications (e.g. overseas qualifications, private diploma etc.) for assessment to determine if you would meet the educational qualification requirement through the Approved Course Providers (ACPs) whom he intends to enroll for the Real Estate Salesperson (RES) course. Check if he meets the RES course requirements. (iv) Possess a pass in the Real Estate Salesperson (RES) exam or equivalent (v) Be registered with CEA through only one licensed estate agent (EA) (vi) Must not be an existing licensee/ Key Executive Officer (KEO) of another licensed estate agent (EA) (vii) Must not hold a moneylender's licence and not be an employee, director, or partner of a licensed moneylender (viii) Undertake to complete at least 6 credit of mandatory continuing professional development (CPD) courses for each CPD cycle. This is applicable only for returning and renewing salespersons (RES). For KEOs/ Practising Directors/ Partners/ Salespersons (RES) who have de-registered: (a) for up to 2 years, is required to fulfil the same number of CPD credits as if he did not leave the industry, before applying for registration. (b) for more than 2 years, is required to take the RES course and pass the RES examination before applying for registration. (ix) Must be covered by a Professional Indemnity Insurance (PII) valid for at least one year from the commencement date of the registration (x) Must not be in arrears with the Central Provident Fund (CPF) Board for Medisave contribution. (xi) Fulfill the “fit and proper” criteria under the Estate Agents Act (EAA), such as: (a) Must not be an un-discharged bankrupt or have entered into a composition or scheme of arrangement with their creditors (b) Must not have any convictions in a court of law in any country.* (c) Must not have any judgment that involved a finding of fraud, dishonesty or breach of fiduciary duties entered against them in civil proceedings (d) Must not have been detained under the Misuse of Drugs Act or served with a detention/police supervision order under the Criminal Law (Temporary Provisions) Act (e) Has not been convicted of any offence under the Estate Agents Act (EAA) Note: Applicants must not withhold declaration to CEA of any convictions in a court of law in any country. Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 21 3) Application and Renewal Fees (RES) The annual registration fee per RES is $230. The application fee to register RES and to renew the registration of RES is $53.50 (inclusive of GST) per registration. W.E.F. 01 June 2021, CEA has ceased charging the registration fee when RES switches from one Estate Agent (EA) to another within the current registration period. (Source: https://www.cea.gov.sg/professionals/salesperson-registration-matters) 3.1.5 COMPLY WITH THE ESTATE AGENTS (ESTATE AGENCY WORK) REGULATIONS, INCLUDING THE FOLLOWING (a) No Dual Representation by Salespersons (1) No salesperson (RES) or estate agent (EA) who is a natural person shall, in respect of the SAME property, have as clients both vendor and purchaser or both landlord and tenant. (2) Paragraph (1) applies regardless of the consent or agreement of the client or of any or all the parties to the relevant transaction. It means a RES would be committing a dual representation offence if he represents both parties in the SAME transaction. In other words, RES cannot represent both buyer and seller, or both tenant and landlord in the same property transaction. (3) Any person who contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000 or to imprisonment for a term not exceeding 12 months or to both. (b) No Referral to Moneylenders (1) No estate agent or salesperson shall — (i) Introduce, refer or recommend a client to any moneylender or otherwise suggest the use of the services of any moneylender; or (ii) Receive any commission, reward, fee, payment or other benefit whatsoever from any moneylender in respect of any money-lending transaction. (2) Any person who contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000 or to imprisonment for a term not exceeding 12 months or to both. (c) No Holding of Transaction Monies (1) No estate agent (EA) or salesperson (RES) shall hold or handle any money for or on behalf of any party in relation to any of the following property transactions: (i) The sale or purchase of ANY property situated in Singapore; and (ii) The lease of HDB property. (2) Paragraph (1) shall not prevent any estate agent (EA) or salesperson (RES) from — (i) Delivering on behalf of any party a crossed Account Payee cheque or cashier’s order drawn in favour of another party to the transaction; or Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 22 (ii) Receiving such remuneration or reimbursement in relation to the management, repair or renovation of the property as the estate agent or salesperson may be entitled to under a written contract or authorization. It means RES are also not allowed to handle CERTAIN MONIES related to the buying and selling of properties situated in Singapore, and the lease of HDB properties. (3) Any person who contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 6 months or to both and, in the case of a continuing offence, to a further fine not exceeding $500 for every day or part thereof during which the offence continues after conviction. REAs and RES are ALLOWED to handle some types of monies as shown below: (d) Use of Council Symbols & Representations (1) No estate agent (EA), salesperson (RES) or any other person shall, except with the EXPRESS WRITTEN PERMISSION of the Council — (i) use any name, symbol, mark or representation that is identical to or which incorporates or resembles that of the Council; or (ii) use Internet domain names, World Wide Web addresses or email addresses that incorporate characters, initials or representations of the Council which may deceive or cause confusion. (2) Any person who contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 6 months or to both and, in the case of a continuing offence, to a further fine not exceeding $500 for every day or part thereof during which the offence continues after conviction. (e) Display of Estate Agent Card (1) Salespersons (RES) and estate agents (EAs) who are natural persons must display upon themselves the Estate Agent Card issued by the estate agent (EA) that they represent at all times when carrying out estate agency work (EAW). Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 23 (2) The person displaying the Estate Agent Card under paragraph (1) shall show the card to any person who may reasonably request to see the card and allow such person to record any information from the card. (3) Any person who contravenes paragraph (1) or (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 6 months or to both. (f) Use of Prescribed Estate Agency Agreements [See sample Form 1 ~ Form 8 at the end of CU 3] (1) The following agreements are prescribed by the CEA in respect of estate agency work for the sale, purchase or lease of RESIDENTIAL property in Singapore on a non-exclusive basis: (i) Estate Agency Agreement for the sale of residential property (Form 1); (ii) Estate Agency Agreement for the purchase of residential property (Form 2); (iii) Estate Agency Agreement for the lease of residential property by a landlord (Form 3); and (iv) Estate Agency Agreement for the lease of residential property by a tenant (Form 4). (2) The following agreements prescribed by the CEA in respect of estate agency work for the sale, purchase or lease of residential property in Singapore on an exclusive basis: (i) Exclusive Estate Agency Agreement for the sale of residential property (Form 5); (ii) Exclusive Estate Agency Agreement for the purchase of residential property (Form 6); (iii) Exclusive Estate Agency Agreement for the lease of residential property by a landlord (Form 7); and (iv) Exclusive Estate Agency Agreement for the lease of residential property by a tenant (Form 8). (3) For the purposes of paragraphs (1) and (2), “residential property” includes any property comprising residential property and property other than residential property. An estate agent (EA) or a salesperson (RES) who is unable for any reason to perform the estate agency agreement shall inform the client immediately. (g) Professional Indemnity Insurance (PII) Requirements PII protects estate agents (EAs) and salespersons (RES), who can be held legally liable for claims arising from wrongful acts (e.g. negligent acts, errors, and omissions or breaches of professional duty) committed during the performance of Estate Agency Work (EAW). Estate agents (EAs) are to ensure that both the entity and all its salespersons (RES) are sufficiently covered. The CEA has some minimum requirements: Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 24 Maximum Deductible Maximum Deductible Minimum Minimum Sub- Category (in respect of each (in respect of each Indemnity Limit* limit for each RES claim against EA) claim against RES) Sole-Proprietorship $100,000 $100,000 $5,000 $5,000 with only 1 RES Non-sole- proprietorships with 1-10 RES or $200,000 $100,000 $5,000 $5,000 Sole-proprietorship with 2-10 RES EA with 11-30 RES $300,000 $100,000 $5,000 $5,000 EA with 31-50 RES $400,000 $100,000 $5,000 $5,000 EA with 51-500 RES $600,000 $100,000 $10,000 $5,000 EA with >500 RES $1 million $100,000 $20,000 $5,000 (h) Continuing Professional Development (CPD) Scheme The objectives of the CPD scheme is to ensure that KEOs and salespersons (RES) possess the necessary professional knowledge in estate agency work (EAW), and continuously upgrade themselves by keeping abreast of the latest changes in Government policies and procedures for property transactions. o Under the Estate Agents (Estate Agency Work) Regulations 2010, every KEO, practising director/partner and salesperson (RES) is required to undertake mandatory Continuing Professional Development (CPD) to fulfil Minimum of 6 credits for each CPD cycle from 1 Oct 2019 (i.e. 2019/2020 CPD Cycle) onwards, of which 4 credits must be from Professional Competencies (courses must be approved by CEA) and 2 credits under Generic competencies (the KEO can approve Generic Competencies courses). Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 25 Excess CPD credits clocked in each cycle are not allowed to be carried forward to the next cycle. Ongoing studies and completion of certain degree programs which are directly related and relevant to real estate agency industry can be counted towards CPD requirements. These will be assessed on a case-by-case basis. o New Salespersons (RES) are EXEMPTED from CPD requirement for the first CPD cycle but will need to comply with the CPD requirement for the next and subsequent CPD cycles. For example, if Alex is first registered with CEA on 1 Dec 2019 after passing his CEA examination, he is required to fulfil the CPF requirement for 2019/2020 CPD cycle for 2021 CEA’s registration renewal, but will be required to fulfil the CPD requirements for 2020/2021 CPD cycle for 2022 CEA’s registration renewal. o For KEOs, Practising Directors/Partners and RES who leave the industry, he or she will be required to fulfil the following requirement: Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 26 Example 1 This is an illustration of the CPD requirements for a returning RES who left the industry and is returning within the same year:  The RES’ registration lapsed on 14 Feb 2020;  The EA (Estate Agent) submitted an application on 3 Mar 2020 to register the RES till 31 Dec 2020; and  The RES has no outstanding CPD requirements as he was granted renewal for his 2020 registration licence. Therefore, the RES will only need to fulfil 6 CPD credits for the 2020 CPD cycle. Example 2 This is an illustration of the CPD requirements for a returning RES who left the industry for less than two years:  The RES’ registration lapsed on 6 Sep 2018;  The EA (Estate Agent) submitted an application on 10 Aug 2020 to register the RES till 31 Dec 2020; and  The RES did not complete any CPD course in 2018 and 2019 CPD cycles. Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 27 Therefore, the RES will need to fulfil 12 CPD credits for his outstanding CPD requirements from the 2018 and 2019 CPD cycles and 6 CPD credits for the 2020 CPD cycle. The RES has no outstanding CPD requirements as he was granted renewal for his 2020 registration licence Example 3 This is an illustration of the CPD requirements for a returning RES who left the industry for less than two years, and the EA submits the registration application in the month of Oct, Nov or Dec¹:  The RES’ registration lapsed 1 Jan 2019 (e.g. did not fulfil the 2018 CPD requirements for the renewal exercise in Oct 2018);  The EA (Estate Agent) submitted an application on 30 Nov 2020 to register the RES for 2021; and  The RES did not complete any CPD course in 2018, 2019 and 2020 CPD cycles. Therefore, the RES will need to fulfil 18 CPD credits for his outstanding CPD requirements from the 2018, 2019 and 2020 CPD cycles 3.1.6 UNDERSTAND THE CODE OF PRACTICE FOR ESTATE AGENTS AND DESCRIBE THE DUTIES OF ESTATE AGENTS IN RESPECT OF MANAGEMENT AND SUPERVISION, ESTATE AGENT CARD, CLAIMS AND COMPLAINTS, AND RETEN (a) Management & Supervision (1) Estate agents (EAs) shall have in place and document in writing proper systems and processes – (i) To ensure that their salespersons (RES) acquire and have the estate agency work (EAW) knowledge referred to in paragraph 4 of the Code of Ethics and Professional Client Care (CEPCC); and (ii) For the management and supervision of their business and salespersons (RES). (2) Estate agents (EAs) shall manage and supervise their salespersons (RES) to ensure that their salespersons (RES) – (i) Comply with the laws or legal obligations or requirements stated in paragraph 5 of the Code of Ethics and Professional Client Care (CEPCC); (ii) Conduct their estate agency work (EAW) in a professional and reasonable manner and in accordance with the law; and (iii) Avoid repeating the conduct of any salesperson (RES) or other person employed or engaged by the estate agent which resulted in a breach of the law or disciplinary action. (3) Estate agents (EAs) shall vet all publicity and advertising materials of their salespersons (RES) prior to publication. 2) Estate Agent Card Estate agents must issue an identification card labelled as an estate agent card to each and every one of their salespersons (RES) and partners or the sole proprietor, if applicable; in such form and of such specifications as the Council may require. Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 28  Information In the Card The Estate Agent Card shall include the following information: 1) The name and licence number of the estate agent (EA); 2) The name and registration number of the holder of the card; 3) A recent image of the holder of the card; 4) A contact number or email address for the making of inquiries or complaints to the estate agent (EA); and 5) The expiry date of the licence or registration of the holder of the card [with effect from 19 Nov 2015, estate agents need not state the expiry date of the licence or registration of the holder of the card on the estate agent card].  Replacement of Card No Estate Agent Card shall be replaced unless the person seeking a replacement makes an application to the estate agent (EA) in writing with the reason for the replacement.  Proper Records of Card Issuance The estate agent (EA) must maintain proper records of all Estate Agent Cards issued, which must include the following information: 1) The holder’s personal particulars; 2) The licence or registration number of the holder; 3) The date of issue of the card and the expiry date of the licence or registration; and, 4) The reason for the issue of any replacement card.  Recovery of Card The estate agent (EA) shall recover the card issued to a holder in the following circumstances: 1) When the holder ceases to be engaged or employed by, or otherwise part of, the estate agent; 2) When the licence or registration of the holder expires, is not renewed, or is suspended or cancelled; or 3) When the holder applies for a replacement Estate Agent Card.  Name of The Holder The name of the holder in the Estate Agent Card shall be — 1) the name of the holder as printed in the holder’s identity card issued under the National Registration Act (Cap. 201); or 2) if the holder has not been issued with an identity card under the National Registration Act, the holder’s name as stated in the holder’s passport or any other official identification document, which should be preceded by descriptive words that identify the authority issuing the identification document. Any business or other name (e.g. Joseph) of the holder that is stated in the Estate Agent Card shall be printed within brackets below the name as specified in the above paragraph. 3) Claims and Complaints Estate agents (EAs) must have in place a system with suitable processes for the receipt and investigation of claims and complaints against the estate agent or any of their salespersons. And that system and processes must be document in writing. Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 29 All claims and complaints against the estate agent (EA) or any of its salespersons (RES) must be investigated. And the investigations must be completed within 2 weeks of the receipt of a claim or complaint, or such longer time as the Council may allow. Where the complainant is making a claim against the estate agent (EA) or a salesperson (RES), the estate agent (EA) shall meet with the complainant to explore the possibility of an amicable resolution. The complainant must be expeditiously informed of the outcome of the investigation. On the request of the Council in any particular case, the estate agent (EA) shall furnish the Council, within 2 weeks of the request or such longer time as the Council may allow, with a report on the investigation of the case and details of such action as may have been taken by the estate agent (EA) and salesperson (RES), and the outcome thereof. 4) Retention of Documents & Records i. For the purposes of the Act, an estate agent (EA) shall retain the originals or keep copies of the following documents for at least *5 years: (i) All applications to the Council in respect of estate agent’s licence and the registration of salespersons under the Act, including supporting documents; (ii) All estate agent (EA) and salesperson (RES) agreements; (iii) All Estate Agency Agreements; (iv) All documents relating to property transactions, including: o Sale and Purchase (S&P) Agreements, and Options to Purchase (OTP); o Lease and Lease Agreements, and Letters of Intent (LOI) to lease; o Housing and Development Board documents and forms, and approvals for the renting of Housing and Development Board flats; o Documents evidencing the receipt and payment of transaction monies; o Powers of Attorney (POA) and letters of authorization; and o Declarations made by estate agents (EAs) or salespersons (RES) of any conflict or potential conflict of interests; and (v) All documents and correspondence in respect of claims or complaints, including the result of investigations and any action taken. ii. Copies of documents retained for the purposes of paragraph (1) may be in electronic form. iii. The above paragraphs do not affect any statutory obligation or requirement that may require the retention of documents or records for other purposes or for a different period of time.  CEA’s Update on Retention of Documents and Records – 19 Nov 2015 In line with recommendation by the Financial Action Task Force (FATF), the requirement for records retention is henceforth extended from 3 years to 5 years. Estate agents (EAs) are required to comply with the new record keeping requirement. The FATF is an international taskforce established in 1989 to develop international standards to combat money laundering and terrorism financing. Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 30 3.1.7 KEEP ABREAST OF AND COMPLY WITH ALL APPLICABLE LAWS, PRACTICE CIRCULARS AND GUIDELINES IN RELATION TO ESTATE AGENCY WORK, E.G. PROFESSIONAL SERVICE MANUAL (PSM) Estate agents (EAs) and salespersons (RES) must have good knowledge of and compliance with relevant laws, practice circulars and guidelines, and essential facts:  Professional Service Manual (https://www.cea.gov.sg/legislation-guidelines/practice-guidelines-circulars/professional-service-manual)  Practice Guidelines (https://www.cea.gov.sg/legislation-guidelines/practice-guidelines-circulars/practice-guidelines)  Practice Circulars (https://www.cea.gov.sg/legislation-guidelines/practice-guidelines-circulars/practice-circulars)  Personal Data Protection (https://www.cea.gov.sg/legislation-guidelines/practice-guidelines-circulars/personal-data- protection) 3.1.8 KEEP ABREAT OF AND COMPLY WITH ALL APPICABLE NEWS, PRACTICE CIRCULARS AND GUIDELINES RELATING TO CEA’s CODE OF ETHICS AND PROFESSIONAL CLIENT CARE [Cross-refer to PSM] In this Code, unless the context otherwise requires – ‘clients’ includes prospective clients or customers; ‘‘practice circulars or guidelines’’ means practice circulars or guidelines in relation to estate agency work (EAW) which the Council may issue from time to time. Real estate salespersons (RES) must realise that a failure to observe this Code or any law applicable to estate agents (EA) and salespersons (RES) may constitute unsatisfactory professional conduct or professional misconduct, and may be subject to disciplinary action before a Disciplinary Committee (DC) formed under the Act. (a) Knowledge of Applicable Laws, Practice Circulars And Guidelines, & Essential Facts Estate agents (EAs) and salespersons (RES) must perform their work in accordance with applicable laws and must not perform estate agency work (EAW) unless they have the relevant knowledge to perform the work that they are engaged to perform. It means, among other things, that estate agents (EAs) and salespersons (RES): 1) Must be fully conversant and comply with the Act, the regulations made under the Act (including this Code and in the case of estate agents (EAs) , the Code of Practice for Estate Agents), and the policies, practice circulars and guidelines of the Council; 2) Must be fully conversant and comply with relevant laws, regulations and rules that apply to property transactions; 3) Must keep themselves informed of essential or relevant facts and developments in the property market and matters that could affect any aspect of property transactions; 4) Must be familiar with the procedures for property transactions, and the contents of the forms* used; and Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 31 5) Must not undertake estate agency work (EAW) in respect of Housing and Development Board (HDB) flats unless they are fully conversant and comply with the applicable laws, regulations, rules and procedures that apply to transactions involving such flats. * refer to ‘Use of Prescribed Estate Agency Agreements’ above (b) Due Diligence and Compliance with Law & Statutory Requirements Estate agents (EAs) and salespersons (RES) shall conduct their business and work with due diligence, despatch and care, and in compliance with all laws including statutory and regulatory requirements, and practice circulars and guidelines. It means, among other things, that estate agents (EAs) and salespersons (RES) in conducting estate agency business or work: 1) must comply with and shall not do or attempt to do anything that infringes, or which may directly or indirectly lead to the infringement by any person of any law; and, 2) must take all reasonable precautions and do all reasonable acts to ensure that no law is infringed by any person. (c) General Duty To Client & Public Estate agents (EAs) and salespersons (RES) shall render professional and conscientious service to their clients and shall act with honesty, fidelity and integrity. It means, among other things, that estate agents and salespersons: 1) Must act according to the instructions of the client and protect and promote the interests of the client, unaffected by the interests of the estate agent (EA), salesperson (RES) or any other person; 2) Must not mislead the client or provide any false information or misrepresent any relevant law or fact to the client; 3) Must keep the client informed of any material or relevant development or issue in respect of the property of the client; 4) Must not withhold any relevant fact or information from the client; and (e) must not act against the interests of the client in any manner, including collaborating in any form or manner with any other person. In the conduct of estate agency work (EAW) on behalf of the client, the estate agent (EA) or salesperson (RES) must act ethically, honestly, fairly and in a reasonable manner towards all other persons. It means, among other things, that estate agents (EAs) and salespersons (RES): 1) Must not collaborate with or induce or attempt to induce the client or any other person to engage in illegal, dishonest or unethical practices; 2) Must not overstate or convey a false impression of any relevant information; and, 3) Must not mislead or provide any false information or misrepresent any relevant law or fact. (d) Not To Bring Discredit or Disrepute to Real Estate Industry Estate agents (EAs) and salespersons (RES) shall not do anything that may bring discredit or disrepute to the estate agency trade or industry. It means, among other things, that estate agents and salespersons: 1) Must not do anything that may be fraudulent, dishonest, deceitful or misleading; 2) Must not engage in touting; and Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 32 3) Must not use threatening or harassing tactics or apply unreasonable or improper pressure. Any opinion that is rendered by an estate agent (EA) or a salesperson (RES) to the client or any other person shall be justifiable by reference to verifiable facts and shall be given with strict professional integrity, objectivity and courtesy. Estate agents (EAs) and salespersons (RES) must not solicit for the payment of any reward, commission or fee from any person who did not engage their services. 5) Duty To Client In Relation To Signing Of Documents Estate agents (EAs) and salespersons (RES) must give the client sufficient time to read any form or document before asking or allowing the client to sign the form or document. Before asking or allowing a client to sign any form or document, estate agents (EAs) and salespersons (RES) must explain the meaning and consequences of the provisions of the form or document. An estate agent (EA) or salesperson (RES) with any doubt in relation to any form or document must inform the client accordingly and advise the client to seek advice from appropriate professionals. The client must be given a copy of any form or document that he signs either immediately or as soon as possible after signing. 6) Obligations in Respect of Agreements Estate agents (EAs) and salespersons (RES) must ensure that all agreements concerning financial obligations and commitments in respect of any transaction are in writing, and record the exact agreement between the parties concerned. Estate agents (EAs) and salespersons (RES) shall also comply with the following requirements: 1) They must procure signatures of all joint vendors or landlords for the sale or lease of property, and those of all joint buyers or tenants for the purchase or rental of property; 2) They must ensure that a copy of the agreement is given to every person who signs the agreement, either immediately or as soon as possible after signing; 3) They must allow any party reasonable time to read the agreement before signing it, and to seek appropriate advice if he or she so desires; and 4) They must not ask or procure anyone to sign an agreement in which essential or material terms or information such as the property address, price, dates, names, and commission payable have been omitted or the relevant space for such terms or information is left BLANK or UNFILLED. 7) Conveying Offers And Counter Offers An estate agent (EA) or salesperson (RES) shall submit every offer, counter-offer, proposal or expression of interest received to his client accurately, objectively and as soon as possible after receiving it. 8) Interpretation or Translation if Necessary An estate agent (EA) or salesperson (RES) shall ensure that any information or explanation is conveyed to the client in the language or dialect that the client understands. Copyright © 2020, 2021 Life Mastery Academy Pte Ltd. All Rights Reserved (Ver. 1.7) 33 9) Duties in Respect of Advertisem

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