Getting around the new regime

Some non-registered property agents have been approaching registered agents to transact deals illegally

It has not been a Happy New Year for Mr Lim, a property agent who was poised to close two deals – a $300,000 sale of a Housing and Development Board (HDB) flat and the rental of another unit with a lease of $2,400 a month.

However, the 35-year-old found out last week that his registration has not been approved by the Council for Estate Agencies (CEA) and he stands to lose about $8,400 in commission on these deals.

Mr Lim, who declined to reveal his full name, is one of 210 agents whose registrations were rejected last Wednesday.

From Jan 1, it is an offence for real estate sales persons who are not registered with the CEA to handle estate agency work.

But MediaCorp has learnt that real estate agents whose applications had not been approved have been approaching their registered counterparts to transact deals illegally on their behalf.

Mr G Rajan, a property agent of 15 years, told MediaCorp that he has received a few such requests recently.

Said Mr Rajan: “I didn’t entertain them because it’s not worth the risk and the penalties are severe. If something goes wrong, your name and rice bowl is at stake.”

But he acknowledged that some registered agents might be tempted to take up such transactions especially if they do not have any sales for the month or that they see such transactions as an easy way to make a buck.

MediaCorp understands some of these deals could vary between an even split in commission or the registered agent pocketing 60 per cent of the commission.

Mr Koh Poh Chew, managing director of KPC properties, pointed out that some of the non-registered agents may eventually turn to acting as “runners” for registered agents – which raises the question of where to draw the line between these “runners” and property agents.

Said Mr Koh: “In the past, there are team managers who use ‘runners’ to help them show the flats to prospective buyers. Some of these non-registered agents may become such ‘runners’ and get a cut from the deals.”

The CEA had said that the public can approach the council if they encounter unsatisfactory service from the registered agents.

They can also check the CEA website to see if a property agent is on the public register of estate agents and sales persons.

The licensed estate agencies of the registered salespersons would also have a responsibility to make sure that they continue to act professionally and ethically when handling the existing cases.

Property agents, contacted by MediaCorp, said that few clients requested for their registration number. But they readily provided their registration number, when asked. Said property agent Daniel Lim: “Maybe people need more time to adopt this practice.”

While the CEA did not name the agents who were unsuccessful in registration, it allowed them to follow through their existing cases. However, they cannot enter into any new transaction from Jan 1 onwards.

The CEA had clarified that there is “no fixed debarment period or lifelong debarment”.

The length of debarment depends on the nature and seriousness of the offence. The more serious the offence, the longer the debarment period, it said. It had added: “Individuals who have kept a clean record for a period of time will be allowed to re-enter the industry. We will give an indication of the debarment period based on the circumstances of each case, if they write in to enquire.”

Mr Lim told MediaCorp he was convicted for unlicensed money-lending five years ago and was advised by his company not to reveal this when he applied to register with the CEA.

As a result, his registration was not approved, though Mr Lim does not know whether it was because of his previous conviction or that he had withheld this information in his application.

Hopeful that his appeal will succeed, Mr Lim said that failing which, he stands to lose some $15,000 a month in earnings.

Asked what he would do in the long run if CEA’s decision stood, Mr Lim said: “This is too much of a shock. I’ve spent the last five years turning over a new leaf – investing much time and money in an honest living … I don’t know yet.”

Source : Today – 3 Dec 2011

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