PRACTICE GUIDELINES FOR THE SALE & MARKETING PROCESS OF FOREIGN PROPERTIES

PRACTICE GUIDELINES FOR THE SALE & MARKETING PROCESS OF FOREIGN PROPERTIES
The purchase of foreign properties carries additional risks not associated with local property transactions.
Property agencies and agents therefore play an important role in carrying out due diligence and advising consumers on the risks involved in purchasing foreign properties located outside Singapore, regardless of whether they are developed by foreign developers or Singapore developers, or whether they are owned by foreigners or Singaporeans. .
If you are marketing or facilitating the sale of foreign properties in Singapore, remember to abide by the Council for Estate Agencies’ Practice Guidelines regarding the conduct of such estate agency work.
The guidelines seek to instill professional practices that property agencies and agents must adopt in the sale and marketing process of properties located outside Singapore, as well as to better protect consumers’ interests.The sale and purchase of a foreign property is subject to the laws of the country where the property is located, with differing legal processes and financing practices.

This set of guidelines on the marketing of foreign properties took effect on 1 December 2018, superseding those issued in 2014 (PG01-14).

Let’s take a look at some of the key changes to the guidelines:

• In the pre-marketing phase, property agencies must now confirm that guarantees made in advertisements, e.g. return on investments (ROI) are binding on the vendor (such as the developer or underwriter who owns and sells the property purchased from the developer).

• Due diligence checks must be conducted by Estate agents. Due diligence must be conducted on the vendor and his claims.Due diligence must also be conducted on the foreign property, to verify the specifications and other material information relating to the foreign property, such as property title, tenure, location, size, features, amenities, etc.

• Property agencies must check whether there is information that is adverse or potentially adverse about the vendor or the property. This can be done by screening for news in the mainstream or social media.

• If property agencies assess that there are adverse or potentially adverse findings, they must inform consumers in writing.

• The agencies must also see the contractual documents providing these guarantees. If the figures indicated in the advertisement are not current, the date and time of the data must be stated in the advertisement e.g. ROI from previous years.

• Engagement of a Third Party to Conduct Due Diligence - Where an estate agent engages or depends on a third party (e.g. a company that provides compliance/accounting services, a foreign estate agent or a local representative in the country where the foreign property is located) to perform due diligence checks, the estate agent shall verify and ensure that the third party is qualified and appropriate to perform the due diligence. Estate agents shall determine the scope of due diligence to be performed by the third party and shall assess the results delivered accordingly.

• If a salesperson intends to represent a vendor or purchaser in a foreign property transaction, he shall seek approval from his estate agent to do so. 

• Estate agents shall ensure that they possess the necessary and adequate professional indemnity insurance for the conduct of estate agency work to market foreign properties.

• The agent must also be able to advise on the due diligence, risks, payment and financing for the property. Consumers are advised to also conduct their own due diligence and proceed at their own risk. 

• Estate agents and salespersons shall explain to consumers the arrangements for the signing of transaction documents (e.g. Sale and Purchase Agreements) and advise them to seek independent legal advice to explain the terms and conditions of the documents before they sign them. 

• If the documents are not provided in English, property agencies must obtain an English translation from reasonably qualified translators and provide the documents to consumers before these are signed.

• Salespersons who are marketing on behalf of the vendor cannot represent consumers in the same transaction.

• Estate agents and salespersons shall explain to consumers the dispute resolution mechanism that will apply in the event of a dispute relating to the purchase.They shall also inform consumers about the applicable jurisdiction where a dispute will be resolved, as well as the governing law of the Sale and Purchase Agreement (or equivalent contract).

• Must keep all records and documents.

The purchase of foreign properties is not without risk. However, if estate agents and salespersons do their work with due diligence and conduct themselves professionally throughout the entire transaction when they market foreign properties, the potential risks to all parties involved (estate agents, salespersons and consumers) will be reduced. In the event of any dispute, estate agents and salespersons will also know their rights and liabilities clearly.


Do refer to the Practice Guidelines (click on the link) for the full set of guidelines on the sale and marketing process of foreign properties in Singapore.


(Information accurate as at 29 March 2019.)







Info courtesy  - The Council for Estate Agencies.

PRACTICE GUIDELINES TO RAISE PROFESSIONALISM OF ESTATE AGENTS & SALESPERSONS

PRACTICE GUIDELINES TO RAISE PROFESSIONALISM

OF ESTATE AGENTS & SALESPERSONS

The Council for Estate Agencies (CEA) issued two Practice Guidelines

today to  promote ethical advertising in the real estate agency industry and to

guide the use of prescribed estate agency agreements.

(I) PRACTICE GUIDELINES ON ETHICAL ADVERTISING

2. The Practice Guidelines on Ethical Advertising provides directions and

establishes best practices on the use of advertisements for the real estate

agency industry. The guidelines were developed in consultation with estate

agents, industry associations, government bodies (eg. HDB and URA), and the

Consumers Association of Singapore.  They are applicable to all modes of

advertisements, including classified advertisements, pamphlets or flyers, online

advertising, short messaging services (SMS) and the social media.

3. With effect from 1 August 2011, misleading headlines and claims such

as “Advance loans available’, “Real Estate Specialist” and “King of X X (Name

of Estate)” will not be allowed in advertisements and publicity collaterals. Other

key points include the following:

a. Display Details of Estate Agents and Salespersons

• Salesperson’s name, registration number and contact number
• Estate agent’s name and licence number 2
•  

b. Accurate Advertisement Contents

• Basis of claims such as rates of return, yield rates, etc, must be

            indicated and substantiated

• Accurate use of photographs
• No abetment or suggestion to circumvent existing laws and regulations

      such as selling of HDB flats before minimum occupation period

• Advertisements in internet postings and portals must be kept current

c. Responsible Advertising

• SMS  text  advertisements must  provide a mobile telephone number for

      consumers to opt out of future SMS advertisements

• No SMS advertising or cold calling after 10pm

 

d. Responsible Use of Data

• No disclosure of transacted properties’ specific floor levels and/or unit

      addresses without client’s approval

• Compliance  to  Terms and Conditions of usage of public (free) and

             purchased data

4. Mr Lee Say Kee, Director (Regulatory Control) of CEA and Chairperson

of CEA’s Ethical Advertising Work Group said, “Misleading and unauthorised

advertisements are among the top three categories of public complaints. To

date, we have issued 23 letters of advice to estate agents and salespersons on

such complaints.

The Guidelines will provide clarity on the do’s and don’ts of

advertising, thereby raising  professional and ethical standards in the industry.

CEA will work closely with estate agents and salespersons to implement the

Guidelines.”

(II)  PRACTICE GUIDELINES ON THE USE OF PRESCRIBED ESTATE AGENCY

AGREEMENTS FOR RESIDENTIAL TRANSACTIONS

5. The Estate Agency Agreements are standard forms prescribed in the

Estate Agents (Estate Agency Work) Regulations.  They are applicable to the

sale, purchase and lease of residential properties.

6. The Practice Guidelines is an instruction manual that explains the  key

terms in the agreements, including commission clauses, disclosure

requirements, and co-broking clauses.  It also provides guidance on the use of

the agreements.

IMPLEMENTATION OF PRACTICE GUIDELINES

7. The two Practice Guidelines will take effect on 1 August 2011.  They are

to be read with the Code of Ethics and Professional Client Care issued by CEA

last year.  Non-compliance of the Guidelines may result in disciplinary action.

Both Guidelines are available on CEA’s website www.cea.gov.sg.

MEASURES TO RAISE PROFESSIONALISM OF THE REAL ESTATE AGENCY INDUSTRY AND TO SAFEGUARD CONSUMER INTEREST

MEASURES TO RAISE PROFESSIONALISM OF THE REAL ESTATE

AGENCY INDUSTRY AND TO SAFEGUARD CONSUMER INTEREST

The Council for Estate Agencies (CEA) will implement further regulatory

measures to raise the professionalism of the real estate agency industry and to

safeguard consumer interest.

ESTATE AGENT CARD

2. From 1 March 2011, all salespersons are required to display their Estate

Agent Card when carrying out estate agency work. The Estate Agent Card will

carry the following information:

• Name and license number of the estate agent;
• Name and registration number of the salesperson;
• Recent photograph of the salesperson; and
• Expiry date of registration of the salesperson.

3. Sample copies of the Estate Agent Card are shown in  Annex A. All

salespersons must display their card prominently during the course of their

work. Non-compliance of this regulation is an offence against the Estate

Agents  (Estate Agency Work) Regulations 2010.  Offenders are liable on

conviction to a fine of up to $10,000, or imprisonment of up to 6 months, or both.

PHOTOGRAPHS OF SALESPERSONS ON PUBLIC REGISTER

4. From 1 March 2011, CEA’s Public Register will be enhanced to display

photographs of all registered salespersons.

5. Consumers are advised to  access  CEA’s  Public Register at

www.cea.gov.sg to verify the information on the Estate Agent Card against that

on the Public Register before engaging the  services of salespersons  (see

Annex B).  Consumers should also report to CEA when they encounter any

person not listed  on the Public Register but  carrying out estate agency work

illegally. This will raise overall standards of the industry, as consumers can be

more discerning in assessing the salesperson they engage.

                                

DISPUTE RESOLUTION SCHEME

6. Consumers who are unable to obtain a satisfactory resolution with the

Estate Agent in the event of a dispute have recourse to CEA’s Dispute

Resolution Scheme. This was  implemented  on  3 January 2011. The key

elements of the scheme are summarized in Annex C.

INITIATIVES TO PROMOTE CONSUMER AWARENESS AND EDUCATION

7. On these latest measures to protect consumer interest, CEA Executive

Director, Mr Chionh Chye Khye commented: “Beyond the regulatory role,

promoting consumer awareness and education are key focuses of CEA’s work. 

CEA will work with CASE, HDB and the industry to raise consumer awareness,

and to educate  them  on their rights and responsibilities when appointing

salespersons for property transactions.”

Kindly refer to the link in the CEA website.

http://www.cea.gov.sg/cea/content/binary/pdfFiles/CEAPressRelease24Feb2011.pdf

ESTATE AGENCY AGREEMENT

ESTATE AGENCY AGREEMENT             

From 1 January 2011, an estate agency agreement is required as regards certain proposals and undertaking. The Council for Estate Agencies has prescribed forms applicable to the sale, purchase and lease of residential property. However, these prescribed forms do not apply to estate agency work in relation to:

a) property situated outside Singapore;

b) commercial or industrial property;

c) any actual or proposed collective sale of property under the provisions of Part VA of   

    the Land Titles (Strata) Act (Cap. 158);

d) any actual or proposed sale by a developer of property developed by the developer

    pursuant to a licence issued under the Housing Developers (Control and Licensing) Act   

    (Cap. 130)

Kindly click on the link below to download the relevant forms

http://www.cea.gov.sg/cea/content/estate_agencies_agents/forms_docs/estateAgencyAgreement.html

CEA RULES PROHIBIT DUAL REPRESENTATION BY AGENTS

CEA RULES PROHIBIT DUAL REPRESENTATION BY AGENTS

The Council for Estate Agents (CEA) has set out new rules prohibiting dual representation by salespersons, also known as property agents.

Starting 15 November 2010, salespersons will no longer be able to represent both the seller or buyer or tenant and landlord in any real estate transaction.

Salespersons, along with estate agents, also known as estate agencies, will also be barred from referring their customers to any moneylender or handling cash in certain transactions.

These are some of the rules stipulated by The Estate Agents (Estate Agency Work) Regulations 2010 (EAW), which comprises two codes in its schedules: the Code of Ethics and Professional Client Care, which is applicable to salespersons and estate agents, and the Code of Practice applicable to estate agents.

These rules will help enhance professionalism within the industry, guide salespersons and estate agents, and encourage ethical behavior and good service to clients.

The EAW also specifies guidelines about advertisements and requires estate agencies to create processes and systems, as well as a proper complaints handling system, for the supervision and management of their salespersons and business.

Starting 1 January 2011, estate agents are required to use prescribed estate agency agreements with their customers for the purchase, sale or lease of a residential property in Singapore.

Those doing estate agency work will also need to have professional indemnity insurance coverage and participate in continuing professional development programmes for at least 6 hours every year from 2011.

Starting March 2 next year, salespersons will also be required to present their estate agent’s card when doing estate agency work.

Application for the license of estate agents and registration of salespersons starts today. Successful registration will be published on CEA’s website on January 1, 2011.

The Council for Estate Agencies (CEA)

The Council for Estate Agencies (CEA)

Overview of CEA

The Council for Estate Agencies (CEA) is formed on the 22nd October 2010 as a statutory board under the Ministry of National Development.

Established under the Estate Agents Act, CEA is empowered to administer the new regulatory framework for the real estate agency industry. In addition, CEA is committed to raise the professionalism of the real estate agency industry through collaborative efforts with the industry on industry development programmes and protect the interests of the consumers through targeted public education schemes.