C3 – UNDERSTANDING THE PROFESSIONAL SERVICE MANUAL Core Cat 3 Level 1

C3 – UNDERSTANDING THE
PROFESSIONAL SERVICE MANUAL
Core Cat 3
Level 1
CONTINUING PROFESSIONAL
DEVELOPMENT
CPD
• Required for all practicing SPs
• CPD cycle – 1 Oct to 30 Sept each year

–
–
–
6 CPD hours
50% Core hours – applicable laws, policies
50% Non-core – selling skills, etc
Increased over time
• Auto-suspension if not met
– Address shortfall plus current year for reinstatement
– Registration cancelled if not met for 2 years
3 of 106
New Core CPD Framework
• Wef 2014 - for cycle beginning 1 Oct 2013
• 3 Categories introduced
– C1 – courses focusing on enhancing professional ethics and
knowledge of EAA
– C2 – keep abreast of latest laws and regulations relating to
estate agency practice and property transactions
– C3 – raising professional standards, best practices and deepen
knowledge of CEA’s practice guidelines
• To complete at least one from each category over 3
consecutive years
4 of 106
Disclaimer! (or is it?)
The following training session should taken in the
right light. Whilst the trainer, is also a Salesperson,
any opinions, teachings, or examples are expressed
as a Trainer in the spirit of “best practices”.
All Salespersons are encouraged to adopt a mindset
of “best practices”.
So…don’t shoot the messenger!
5 of 106
Preamble
“This Professional Service Manual (PSM) is issued by the Council for
Estate Agencies as Practice Guidelines to estate agents (EAs) and
salespersons (SPs) regulated under the Estate Agents Act (Cap.
95A) for their conduct of estate agency work in property
transactions involving residential, commercial and industrial
properties.
The PSM seeks to set clear standards and guidelines to ensure
salespersons render their services competently, professionally and
ethically, thus promoting open, fair and honest property
transactions. It also highlights the responsibilities and duties that
salespersons must pay attention to when carrying out estate
agency work in both the sale and leasing of property transactions.”
(PSM – CEA 27 April 2013)
6 of 106
Summary
• The PSM shall be read with reference to the Estate
Agents Act (EAA) and relevant Practice Guidelines (PG)
and Practice Circulars (PC)
a)
b)
c)
d)
e)
f)
EA (Est. Agency. Work) Regulations
EA (Licensing & Registration) Regulations
EA (Dispute Resolution Schemes) Regulations
PG on Use of Pres. EA Agreement (Form 1-8)
PG on Ethical Advertising
PG on Options to Purchase (OTP) and Sales &
Purchase (S&P)
g) Any other PGs and PCs issued by CEA .
7 of 106
Summary
• PSM elaborates duties & obligations as specified in
the Code of Ethics & Professional Client Care (CEPCC)
• The EAA and any subsidiary legislation will continue
to have full effect
– PSM will supersede any PGs if any inconsistencies
exists
• EAs & SPs to comply with PSM wef 1 Jan 2014
– May be referred to in any investigations on alleged
professional misconduct, negligence & Disciplinary
Prceedings
8 of 106
Scope of Coverage
1.
2.
3.
4.
Establishing a Client-Agent Relationship
Providing Professional Advice to Clients
Marketing and Advertising of Property
Communicating of All Offers and Expressions of
Interest
5. Completing the Property Transaction
9 of 106
CODE OF ETHICS & PROFESSIONAL
CLIENT CARE (CEPCC) - RECAP
10 of 106
CODE OF ETHICS AND PROFESSIONAL CLIENT
CARE
1. Knowledge of and compliance with relevant
laws, practice circulars and guidelines, and
essential facts
 Including not undertake HDB work unless fully
conversant in rules and procedures.
2. Due diligence and compliance with law and
statutory requirements
 Make sure no laws are infringed
11 of 106
CASE STUDY
Failure to Comply with HDB Regulations
12 of 106
Facts of Case
• SP represent seller in HDB transaction, buyer and father
(complainant) purchased the property, issued $1,000 option
money
• Several days later, option exercise fee issued by cheque
prepared using cheque machine, amount $40,000.07 instead of
$4,000
• SP wrote name of seller on cheque and passed cheque to seller
• Mistake discovered, buyer attempted to recover $36,000.07
• Seller returned $9,000, declared bankruptcy
• S&P failed to complete
13 of 106
Charge & Outcome
• Charge
– SP was charged for failing to comply with HDB
regulations under CEPCC “knowledge of and
compliance of relevant laws” when he facilitated the
option exercise fee
• Outcome
– SP pleaded guilty
– DC considered SP failed in his duty to check the cheque
to comply with HDB regulations
– SP was fined $3,000 and suspended 4 months. Fixed
cost of $1,000 also awarded to prosecution
14 of 106
CODE OF ETHICS AND PROFESSIONAL CLIENT
CARE
3. General duty to clients and public





Act to instructions of client
Not mislead, misinform client
Not withhold relevant information
Not act against interests of client; e.g. “No co-broke”
Act honestly, ethically
4. Prohibition against bringing discredit or disrepute to
real estate industry




Avoid fraudulent, dishonest acts
Not engage in touting
Not use harassment, threatening tactics
Not solicit any reward from anyone who did not engage their
services
15 of 106
CASE STUDY 1
Misleading Potential Tenants Regarding
Ownership of Rental Property
16 of 106
Facts of Case
• Seller is selling her flat. SP represented buyer.
• Seller needed to rent another before moving into a
new flat
• SP leased out a flat which she claims to belong to her
cousin, which in fact is owned by SP and her exhusband
– Ownership proof was supplied but was altered to
reflect one name only – her ex’s
– Parties agreed that SP is not representing seller, nor
acting as an SP
• Seller proceeded to lease the flat
17 of 106
Finding & Outcome
• Charge
– SP was charged with bring discredit or disrepute
by being fraudulent, dishonest, deceitful, or
misleading in providing falsified documents
• Outcome
– SP was found guilty and suspended for 3 months.
Fixed costs of $1,000 also awarded.
18 of 106
CASE STUDY 2
Misleading Co-broke about Sellers’
Commission
19 of 106
Facts of Case
• Seller (complainant) engaged SP to sell her
property on exclusive basis with commission
agreed at 1.5%
• SP agreed with buyer’s agent for half the
commission paid by seller. SP informed buyer’s
agent the commission was 1%
• Buyer’s agent insisted that on commission to be
included in OTP, which SP added as 1%
• SP then altered her copy to reflect 1.5% in order
to collect from seller
20 of 106
Charge & Outcome
• Charge
– SP was charged for disreputable conduct against
the industry
• Outcome
– SP pleaded guilty
– SP was fined $5,000, suspended 5 months. Fixed
cost of $1,000 was also awarded to prosecution
21 of 106
CODE OF ETHICS AND PROFESSIONAL
CLIENT CARE
5. Duty to clients in relation to signing of
documents




Give sufficient time to read,
Explain terms, meanings, consequences
Seek advice from professionals – bankers, lawyers
Give copy as soon as possible
6. Obligations in respect of agreements
 Record exact agreement – commissions, asking price
etc
 No signing of blank forms
22 of 106
CODE OF ETHICS AND PROFESSIONAL
CLIENT CARE
7. Obligation in conveying offers and counter
offers
 All offers, counter offers, proposals, expression of
interest
8. Interpretation or translation if necessary
 Translated if necessary – by lawyers if possible,
individuals above 21 years-old
23 of 106
CODE OF ETHICS AND PROFESSIONAL
CLIENT CARE
9. Duties in respect of advertisements
 Name, contact number of SP
 License number of estate agent & registration
number of SP
 Information, description of property must be
accurate
 Claims of expertise, success rate to be avoided unless
substantiated by verifiable documents
 Advertise according to clients’ instructions
 Consent needed to advertise, in writing – EAA
forms, email
 Remove all ads no longer valid
24 of 106
CASE STUDY 1
Advertising Property Without Owner’s
Consent
25 of 106
Facts of Case
• Owner of HDB Flat engaged an estate agent on
exclusive basis
• Estate agent advertised in Straits Times
• SP saw add and posted in Property Guru.
• Owner saw ad mad felt aggrieved
26 of 106
Finding & Outcome
• Charge
– Failing to comply with applicable laws
• Outcome
– Was found guilty
– Fined $3,000 plus fixed cost of $1,000
27 of 106
CODE OF ETHICS AND PROFESSIONAL
CLIENT CARE
10. Duty to avoid conflict of interests
 Not accept or act for clients if interests of SP/EA are in conflict
of clients
•
SP/EA to withdraw/decline to act if clients request to exclude info on
grounds of confidentiality
 Declare in writing any conflicts that may or as they arise at
soonest possible time
•
•
E.g. buyers’ SP is from same company, other SP is related, buyer is
related
Clients decide if to continue with conflict
 EA/SP should not acquire directly or indirectly property or
interest in property of client without expressed consent of
client
 Not accept any fee reward, reward, referral fees without
consent. Fact & quantum declared in writing
 Not engage in any activity, business, work that will compromise
discharge of their obligations – e.g. also insurance agent
28 of 106
CASE STUDY 1
Failure to Convey Expression of Interest,
Declare a Potential Conflict of Interest and
Misrepresentation
29 of 106
Facts of Case
• Seller (complainant) engage SP(A) to sell their property with
1% commission
• Introduced a buyer whose property was sold recently by his
partner SP(B). Selling price was above Seller’s asking price
• SP(A) received half share of commission from SP(B) being
partners
• As selling price was above asking, SP(A) proceeded to ask for
2% by indicating that buyer was represented by “Ms. A” who
is non-existent
• Sellers reluctantly agreed to increase commission to 1.25%
• In the meantime, another higher offer alleged to have been
received for which SP(A) disputed the amount
30 of 106
Charges
• Charge 1
– Failing to protect clients interest and failing to inform of higher
offer
• Charge 2
– Failure to convey expression of interest in respect to alleged offer
• Charge 3
– Failing to declare conflict of interest in receiving half of commission
received from sale of buyers’ property
• Charge 4
– Misrepresenting to his clients that “Ms. A” represented the buyers
to solicit more commission (Para 6 CEPCC, duty to act with
honesty, fidelity & integrity
31 of 106
Outcomes
• Findings
– Charge 1 not proven that higher offer was made. However,
evidence show there was an expression of interest. However, SP
was guilty of remaining charges
• Charge 2 – financial penalty $7,000, 7 months suspension
• Charge 3 – financial penalty $6,000, 6 months suspension
• Charge 4 – financial penalty $2,000, 3 months suspension
• Suspension to run concurrently – Total $15,000 financial penalty,
7 months suspension plus $1,000 fixed cost awarded
32 of 106
CASE STUDY 2
Failing to Declare a Potential Conflict of
Interest and Failing to Protect Clients’ Interest
33 of 106
Facts of Case
• SP engaged by sellers to sell flat on exclusive basis.
SP assisted by his downline.
• Advertised unit as Blk 260D instead of Blk 260B &
“buyer only basis”
• Buyers first represented by agent (complainant).
Buyers made arrangement to view on their own
• Downline’s services offered to buyers who engaged
him at 1% commission when sale was agreed
• SP did not disclose that he was receiving 6% as
overrides of downline’s commission from buyer
34 of 106
Findings & Outcomes
• Charge 1
– Failing to declare overriding fees (COI)
• Financial penalty $4,000, 6 months suspension
• Charge 2
– Failing to protect clients’ interest in advertising in “buyer only
basis”
• Financial penalty $4,000, 6 months suspension
• Charge 3
– Failing to observe duties in respect to advertisements in
marketing wrong block number
• Financial penalty $2,000, 3 months suspension
• Total $10,000 fine, 6 months suspension (concurrently) plus fixed
cost of $1,000
35 of 106
CODE OF ETHICS AND PROFESSIONAL
CLIENT CARE
11.Recommending professional advice where
appropriate
 Recommend appropriate professional advise
unless trained – bankers, lawyers
12.Safeguarding confidential information
 Personal information or information relating to
client cannot be shared
•
Consent required from relevant parties; e.g. Both
buyer and seller must consent for ads to promote
“record COV”
36 of 106
CODE OF ETHICS AND PROFESSIONAL
CLIENT CARE
13. ???
37 of 106
1. ESTABLISHING A CLIENT-AGENT
RELATIONSHIP
38 of 106
Scope
1. Introduction
2. Duty to Client
3. Declaring COI upfront
4. SPs transacting property for themselves
5. Disallowing SPs to be Powers of Attorney (POA)
6. Confirming identity of Clients
7. Confirming owner of property and property details
8. Agency Agreements
9. Vulnerable Clients
10. Offering Gifts and Vouchers
39 of 106
1.1 Introduction
• Clients should be informed of proposed terms
service to make informed decision on whether to
engage the EAs & SPs
– To meet client as soon as possible to:
• Discuss terms of engagement including fees, and
services to be rendered
• Render advice and take appropriate instructions as may
be given
40 of 106
1.1 Introduction
• No change of EA or SP allowed once engaged
unless there is a valid termination or initiated or
requested by client
– Examples:
1. Engaged SP “A”. Just before transaction is closed with
signing of OTP or S&P, “A” informs client that SP “B” is
taking over. Not allowed.
2. SP “A” engaged by client, facilitated the entire
transaction process. At HDB’s appointment, SP “B”
appears and states he is taking over. Not allowed
41 of 106
1.2 Duty to Client
• EAs & SPs to do the following:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
Act in the best interest of the client;
Act in accordance with the lawful instructions of the client;
Act only within the scope of the authority given by the client;
Advise the client to seek independent professional advice on matters
outside the expertise of the estate agent or salesperson;
Maintain the confidentiality of information respecting the client;
Disclose to the client all material information in respect of the real
estate services and the property to which the services relate;
Communicate all offers or expressions of interest to the client in a
timely, objective, and unbiased manner;
Make reasonable efforts to discover relevant facts in respect of any real
estate that the client is considering acquiring or disposing (of);
Take reasonable steps to avoid any conflict of interest or potential
conflict of interest; and
Promptly and fully disclose to the client any conflict or potential conflict
of interest that does arise.
42 of 106
1.3 Declare COI Upfront
• CEPCC specifies that EAs & SPs have a duty to
avoid COI. Potential COI exists when:
– SPs representing their respective clients in a
transaction are related
• By blood or marriage, present or past: e.g. Spouse or
ex-spouse, parent or parent-in-law, sibling or sibling-inlaw or child
• By employment or business association: e.g. director, or
partner, or shareholder, or employee of the other party.
43 of 106
Other COI Examples
• Relationships SPs may have with other persons or
organisations which may impact the transactions
– Example: Sellers’ SP recommends a banker to the buyer for
which the SP is getting a referral fee. Must inform seller.
• SPs from the same agency may represent the other party.
Must disclose.
– Particularly if SP of other party is upline or downline
– Or if EA has a policy to pool commissions and share
amongst the SPs
• To avoid undisclosed direct or indirect COI. E.g. SPs chose to deal
with a tenant paying commission to maximise their earnings,
instead of accepting another tenant who may not pay a
commission but prepared to pay a higher rental.
44 of 106
1.3 Declare COI Upfront
• SPs have a duty to avoid COI. If potential COI is
unavoidable, SP to disclose to clients and obtain
clients’ acceptance in writing before proceeding
to act via:
– E-mail, EA forms, or other verifiable forms of
communication such as SMS or other text
message.
45 of 106
1.3.6 COI – Dual Rep
• SPs should not collect commissions from more than
one party in the same transaction. (Reg. 5 of EAA
(Estate Agency Work))
– SP may render basic assistance to explain process to
the party who is not the principal; e.g. a direct buyer
– Not allowed to do estate agency work including
negotiate price on behalf of third party.
– If collecting commissions from principal, SP is not
allowed to collect a co-broke commission from the
other party’s SP.
46 of 106
1.4 SPs Transacting Property for
Themselves
• SPs who parties to a transaction; i.e. as a buyer or
seller, must disclose that he is an interested party
as soon as possible
– Must not accept any appointment to act on behalf
the other party. A clear conflict of interest
– Example:
• SP is a buyer of a HDB flat. He cannot represent the
seller in the transaction.
47 of 106
1.5 Disallow SPs to be an Attorney to
POA
• Normal to appoint any person who is a family member or
close trusted family friend as POA
– SP is permitted to be POA if appointed by buyer or seller &
he is not facilitating in the transaction. He is also not
allowed to handle or instruct distribution of proceeds
other than to pay the other party in accordance with
contract or his principal.
• COI exists if SP is engaged by client as an agent to
facilitate the transaction and at the same time appoints
him as an attorney in a POA
– Permitted SP is an attorney, but not facilitating in the
transaction
48 of 106
1.6 Confirm Identity of Client
• SPs to take reasonable effort to confirm identity of
clients
a) Record full name of client, or authorised signatory
(via company resolution) if client is a company
b) Verify identity by checking NRIC, passport, or drivers
licence
c) Verify age – 21 years and above
•
Between 18 years to 21 years old – cannot contract in
sales and purchases, mortgage, assignment, or settlement
of any land or for any leases more than 3 years (Civil Law
Act; Cap 43).
49 of 106
1.6 Confirm Identity of Client
d) Check immigration passes and/or work permits
of tenant, keep copies
e) Cross-check passes and particulars with
passport, check photos with actual person, and
keep copies
•
•
Verify validity of passes with ICA website & print
acknowledgement slip, or
Verify work permits with MOM website & print
acknowledgement slip.
50 of 106
Immigration Act (Cap. 133)
• SPs to exercise due diligence to check status of
prospective tenants to ensure they are legal
residents in Singapore as specified by the Act
before recommending the tenant to the landlord
• Offence if SPs fail to carry out due diligence
checks
– If convicted – mandatory jail sentence of between
6 to 24 months
– And fine not exceeding $6,000
51 of 106
1.6 Confirm Identity of Client
• Corruption, Drug Trafficking and Other Serious
Crimes (Confiscation of Benefits) Act (Cap 65) (CDSA)
– Criminalises laundering of proceeds from drug
trafficking and other serious offences (>360)
– Allows for confiscation of such proceeds
– Mandatory to lodge a Suspicious Transaction Report
(STR) if there is suspicion that the property
transaction may be connected to criminal activity
(Section 39 (1), CDSA)
• Example: Buyer wants to maintain anonymity and pays for
the purchase with cash.
52 of 106
1.7 Confirm Owners & Property Details
• SPs must confirm that the clients are owners of
the property and/or verify they are authorised to
act for the owner/landlord
– For HDB
• Owners/Landlords to print flat details via “MyHDBPage”
on HDB website.
– For Private Property
• SPs can procure Title information via SLA’s INLIS
– Give copy to client
53 of 106
1.7 Confirm Owners & Property Details
• SPs to acquire & verify basic information on the
property.
Information on:
Suggested Sources
Tenure
S'pore Land Registry (SLA)
Floor Area
Land Titles Registry (SLA); HDB
Service & Conservancy Charge
HDB Infoweb, Town Council, Mgt.
Corp. Strata Title (MCST)
Upgrading works & upgrading costs of
private and public housing
HDB Infoweb/MCST
Approved Use of property
URA website
54 of 106
1.8 Agency Agreements
• EAs & SPs encouraged to use prescribed agency
agreements – PG on Use of Prescribed Estate
Agency Agreements Form 1-8
• EA/SPs to give clients sufficient time to read,
understand meaning and understand
consequences of provisions
• SPs should also explain clauses in agreement and
give client the opportunity to negotiate terms of
engagement
55 of 106
1.8 Agency Agreements
a) Commission Clause – subject to negotiation and agreed
by client
b) Exclusive/Non-exclusive Agreements – SPs to explain
differences
i.
SP to ensure clients understand contents of exclusive
agreement before signing
•
ii.
In relation, SPs shall not solicit property listings, or
buyers/tenants who are subject to exclusive agreements
For exclusive agreements SPs to provide marketing plan
•
Type of ads & number, approach, strategies, and plan for regular
updates and feedback
iii. For non-exclusive agreements, clients must be informed
of terms & conditions, fees and services to be offered.
•
If agreement has not been signed, client’s consent in writing
must be obtained in advance before advertising
56 of 106
1.8 Agency Agreements
c) Validity for exclusive agreements – max 3 months. Can
be renewed on expiry
d) Expected selling price or rent – advise client on market
price/rent and obtain clients’ instruction of expected
price/rent
e) Disclosure requirements – declare & disclose any
conflict or potential conflict of interest at all times
f) Co-broking clause – advise that marketing property on
“no co-broke”, “already co-broke” basis or similar is
contrary to sellers’/landlords’ interests
g) Additional terms (which should not be in conflict with
prescribed agency agreement) – to explain terms
clearly; e.g. reimbursement of fees for valuation
reports, or other fees
57 of 106
Co-broking
• Common practice
• Sharing of commission strictly an agreement between SPs and
should be mutually agreed upon
• If buyers and sellers agree to pay their respective agents a
commission, no further co-broking is allowed
• CEA does not prescribe commission rates – open to negotiation
and market driven
• SPs who are in the same team as sellers/landlords cannot
represent buyer/tenant in same transaction. Deemed to be in
same team if:
i.
Upline/downline relationship – overriding issues
ii. Related by blood or marriage (current or past)
iii. Advertise/market the property together
iv. Within the same division, group, or team within the Agency
58 of 106
Co-broking
• If SP who is in the same team as sellers’/landlords’
SP, he should give to the enquirer the
sellers’/landlords’ salesperson’s details (name, phone
number)
• CEPCC specifies that EAs & SPs must not solicit for
any reward, commission, fee from any person who
did not engage their services
59 of 106
1.9 Vulnerable Clients
• Vulnerable clients require greater attention and
consideration due to:
– “physical, mental, or emotional impairment or who for
any reason are unable to make rational decisions on the
property transaction”
– Also illiterate, under financial distress, persons with no
means of sustenance or family support
• Higher duty of care and due diligence expected when
dealing with such clients
• If such clients make decisions with legal connotations,
advise them to discuss with their legal advisers.
– Discuss with their legal advisers if necessary
60 of 106
1.10 Offering Gifts & Cash Vouchers
• EAs & SPs must not induce clients to engage them
by offering cash or kind
– Should also not agree id the person initiates such
requests
– Inducement considered unethical practice which
brings disrepute and discredit to industry.
• Lowering of commissions is allowed –
commissions are subject to negotiation
61 of 106
2. PROVIDING PROFESSIONAL
ADVICE TO CLIENTS
62 of 106
2.1 Advising on Price or Rent
• Any advice must be justifiable
– Draw from verifiable sources
• Caveats lodged, HDB resale transaction
• Similar properties, locality if possible
• Recommend professional advice
– Lawyers, bank loans, tax advisers, appraisers, valuers
– A&A matters (URA, SCDF, BCA), Master Plan zoning,
plot ratio, storey height (URA)
• Bank Indicatives are not market valuations
– Advice clients to engage licensed valuer
– For HDB, use HDB’s panel of valuers
63 of 106
2.1 Advising on Price or Rent
• Advice of prices and rents – ensure that;
– Data on prices and rents are current and accurate
– Properties used to compare are
similar/comparable to subject property
– Range and amount of data is reasonably
comprehensive, and client is no misled on the
value of his property
64 of 106
2.2 Advise on Procedures
• For Building under construction (BUC) SPs must be
familiar with rules & procedures
– Standard OTP, S&P, and other relevant documents and
information developers have to provide to buyers
• For completed properties
– Explain Law Society’s Conditions of Sale (1999 or
2012)
– Information can be found on the Law Socity’s website
www.lawsociety.org.sg/forMembers/RescourceCentre
/ConditionsofSale2012.aspx
– Refer client to legal adviser if in doubt
65 of 106
2.2 Advise on Procedures
• Must be familiar with Residential Property Act
– Restrictions of foreign ownership
• Definition of foreigner
• Types of restricted properties
• Advise non-Singapore citizen (SC) to obtain approvals before
purchase of strata landed in non-condominium developments
– Need for approval before entering into OTP or S&P (Land
Dealings (Approval) Unit)
– More info on SLA website, www.sla.gov.sg
• Purchasers have to withhold tax when making payments in the
purchase of residential property from non-resident trader
(www.iras.gov.sg)
– Consult tax agents/consultants
66 of 106
2.2 Advise on Procedures (HDB)
• Must be familiar with HDB prevailing policies &
procedures
• Represent Seller
– Complete checklist online, observe 7-day cooling off
before issue of OTP
– Complete sales proceeds and financial plan (if buying
another HDB flat)
• Represent Buyer
– Qualify buyers, complete checklist online before exercising
OTP
– Explain new procedures to obtain HDB valuation
– Ensure buyers obtain necessary financing (HLE, or Bank
approvals) before committing to the purchase
67 of 106
2.2 Advise on Procedures (HDB)
• Advise clients to approach Branch offices to seek
financial counseling when having difficulties in
paying mortgage instalments
• When assisting owners in subletting of flats
• Check eligibility to sublet
• Check non-citizen (NC) quota, advise tenants on their
eligibility, check legality of stay
• Explain HDB sublet terms/policies/conditions/procedures
• Ensure owners obtain approval before granting tenancy
agreement (TA), or register tenancy within 7 days of
commencement for room rentals
• Explain clauses in TA to owner and tenant
• Advise tenants to stamp TA
68 of 106
2.3 Advise on Financing/Payment of
Fees
• SPs to advise client on rules governing financing & fees
payable such as:
– For financing;
• Loan-to-value, total debt servicing ratios (TDSR)
– If CPF is used, inform clients of relevant rules such as:
• CPF Withdrawal Limits & Minimum Sum Schemes
– Fees in Property Transactions such as;
• Option/Option exercise fees
• buyers stamp duty, additional buyers stamp duty, sellers stamp
duty
• Legal & associated fees
• Commissions
• HDB Admin fees
• Valuation fees
69 of 106
2.3 Advise on Financing/Payment of
Fees
• SPs to advise clients to seek appropriate advise from
finance brokers/institutions before committing to
purchase
• Indicatives provided by banks are not valuations and
should not be communicated to clients as valuations
• Any recommendations of financial institutions, legal
firms, service providers made to clients must be
accompanied by disclosures on relationship,
connection, or association
– Any referral fees/commission must be declared and
consent from client obtained in writing including
quantum to be received
70 of 106
2.4 Signing of OTP and S&P
• SPs must:
– Be familiar with and explain terms of OTP and S&P
including financial and legal implications
– Do due diligence checks for their respective clients
• Ownership details
• Payment of option money/deposits
– If by cheque, ensure accuracy of details – name of payee, date,
amount and signature
• Only indicate agreed price on OTP
– Deduced amount; e.g. “market valuation” or “market valuation
plus Cash over valuation” or similar terms are not accepted
– Must not backdate/postdate OTP or S&P
71 of 106
3. MARKETING AND ADVERTISING
OF PROPERTY
72 of 106
3.1 Agree on Strategy
• Under CEPCC, EAs & SPs must;
– Obtain consent in writing before advertising
– Advertise according to clients’ instructions
– Obtain clients’ consent & feedback on strategy
• Marketing strategy should comprise
a) Reasonable range of recent transacted prices/rentals in
the vicinity
b) Reasonable range of current asking prices in the vicinity
•
•
Include overview of current market to manage clients
expectations
SPs to keep proper records of advertisements
–
Copies of ads, receipts/invoices
73 of 106
3.2 Information about Property
• For private properties SPs to make reasonable effort to
gather information such as:
– Facilities, maintenance fees, sinking funds, surrounding
environment
• Ensure information is not false or misleading
– Verify information from developers, reliable sources &
Gov’t authorities
• For foreign properties, ensure information by foreign
developer is accurate before marketing
– SPs to get approval from their EAs before marketing if EA is
not appointed as agent for the property
– Ensure such properties have obtained relevant building
plan approvals from their respective authorities
74 of 106
Marketing Foreign Properties
• PG 1/2014 – PG for EAs and SPs Marketing Foreign
Properties issued by CEA on 14 March for EAs and SPs
to adopt professional practices; in particular (clauses
6-9);
a) SPs to inform their EAs if they intend to represent a
developer of the foreign property to enable the EAs
to perform due diligence checks (Annex A – PG
1/2014)
b) In representing the buyer, the SP will seek the
approval of his EA as he subjects his EA to risk and
liabilities
c) EAs to ensure they possess the necessary professional
insurance for themselves and their SPs.
75 of 106
Marketing Foreign Properties
d) EAs to conduct preparatory activities when
marketing overseas projects;
i.
Selection and Training
•
Need to be conversant. Training to include details and facts,
processes, guidelines, payment schemes and law
ii. Enter into Agreement with developer/foreign estate
agent
iii. Enter into agreement between estate agents if more
than one has been engaged
iv. Buyers’ SPs who co-broke may not be able to conduct
the same of due diligence. However, still required to
ascertain details and specifications of property and
give appropriate advice.
76 of 106
3.2 Information about Property
• When marketing the property, to accurately convey;
a) Property valuation & reasonable range of recent
transactions
b) Approved current/future developments (if made known by
authorities) in vicinity
c) Transport facilities, nearby amenities such as schools, MRT,
malls
d) Approved use of property; residential, commercial/office,
or industrial
• Statements of expected capital gains or rental
yields must be substantiated
•
Include disclaimer that past performance is not indicative
of future performance
77 of 106
3.2 Information about Property
• When marketing the property, to accurately
convey;
– Surroundings in advertising & promotional
materials
• Use of artist impressions, where open green pastures
replace actual buildings around the development is
considered misleading and a misrepresentation
• SPs must not make promises/guarantees they are
not able to fulfill
78 of 106
3.3 Advertising the Property
• EAs & SPs to comply with CEPCC and also PG on Ethical Advertising
a) Obtain consent from vendor to advertise in writing before
advertising
• Include name, registration number of SP. All SPs if more than one
• Inform vendor if listed SPs are representing him
b)
Ensure accuracy in description. Must not be false/misleading
•
c)
Explain TOP dates are estimates
Ensure any offers, proposals, statements, representations, claims
or information are not inaccurate, false or misleading
Include SPs name, registration number, contact number (as
stated in CEA Register) along with EAs name & licence number
d)
•
For CATS (4-liner) – only an identifiable name and contact of SP
registered with CEA is needed
79 of 106
3.3 Advertising the Property
•
Any phrases that is against the owners’ best interest
is not allowed
–
•
SPs to verify information provided by vendor is
accurate before advertising
–
–
•
Such as “no co-broke”, “already co-broke”, “buyer
pay 1% commission” not allowed
Tenure, floor area, and other description
Via title search, documents provided by owners
When marketing a property, SPs must not
recommend that interested purchasers engage of
another SP or recommend himself
80 of 106
3.3 Advertising the Property
•
•
Ensure no discriminatory or stereotypical phrases
against any particular race, religion, or group in society
Advertisements to be removed when;
–
–
–
Property no longer available for sale/lease
Appointment is terminated
OTP has been exercised or S&P has been signed
•
•
If OTP is granted but not yet exercised, SP to explain to interested
parties that property is not available
EAs must state registered names of their SPs accurately
in all their advertising materials
–
–
EAs to show their SPs the advertisements so SPs can
respond to consumers
Breach of para 5 of CEPCC; failure to conduct business &
work with due diligence & care
81 of 106
3.4 Online Marketing
• All regulations & policies regarding advertising
also apply
• SPs to ensure compliance with Anti-spam Act
– Use of “<ADV>” for advertisements
– Provision of “unsubscribe” or opt-out facility,
removal from email mailing list within 10 business
days of request to unsubscribe
82 of 106
3.5 Advertisement Signboards
• SPs to obtain written consent from clients before
display of signs or banners at the property
• Displays to comply with applicable regulations,
guidelines, procedures or policies
– Building and Construction Authority (BCA)
(Outdoor Advertising)
– LTA approval required for signs put up on public
roads
83 of 106
3.6 Property Viewings
• For show flats;
– Per developers’ instructions on mode of sale
– Mode shall not cause inconvenience to public, traffic
congestion, or bring about bad publicity
– Ensure system for managing potential buyers is fair
and transparent
• Obtain clients’ consent prior to conducting viewing
– Details of property viewing; date, time, persons who
viewed to be informed
– Comply with rules, by-laws laid down by property’s
management office
84 of 106
3.6 Property Viewings
• SPs should be prepared for viewings
– Be punctual, project professional image,
professional conduct
– Display agent card at all times
– Keep proper records of who viewed property
• For clients info and proof of effective cause
• For sub-sale where buyer sells after OTP
exercised but before legal completion
– Legal owner to consent to viewing
85 of 106
3.6 Property Viewings
• Where Keys are given to SPs to arrange viewings;
a) SP to issue written acknowledgement on receipt and
number of keys to client
i. Not to duplicate keys without consent
ii. Verify recipient’s identity when returning keys, if not client
iii. Obtain written acknowledgement from client/recipient
b) Not use keys for any purpose other than viewing to
prospective buyers/tenants
c) Return all keys as soon as possible
i.
ii.
Upon sale or lease of property
Upon expiration/termination of agency appointment
86 of 106
3.7 Use of Cheques
• Collecting cheques for any purpose other than to
obtain OTP or S&P is not allowed (re: Project
sales)
– Developers to initiate & consent such collection in
writing direct to the EA
– Cheques to be crossed and issued to developer, or
the project account
• An authorisation letter must be issued capturing
names and NRIC of prospective buyers and SP,
including registration number.
87 of 106
Authorisation Letter
• Letter should clearly state terms to safeguard the prospective
buyer. Such terms include:
a) Name of project; approved/pending approval; specific unit
numbers
•
b)
No cheques can be collected if no unit numbers
Conditions EA/SP can handover cheque to developer
•
Maximum amount for cheque, validity period of cheques, buyers’
prior knowledge & approval
c)
d)
•
Procedure to return cheque if buyer rejects purchase
Changes such as addition/deletion of names, change in units,
change in payment schemes not allowed
e) All purchasers are at least 21 years and eligible to purchase
f) Non-Singapore citizen purchasers subject to LDAU approval if
necessary
Copy of letter to be given to client immediately
88 of 106
3.7 Use of Cheques
• EAs to maintain register, and proper written
procedure for preparation, issue, safekeeping, and
return of cheques. Register should record
information found in the authorisation letter
including;
• Cheque number, received date, SP who received cheque
• Authorisation letters and cheques to be kept by EAs,
not SPs
• For completed properties SPs should not
• Collect cheques as symbol of sincerity
• Use cheques to solicit for higher offers from other buyers
89 of 106
3.8 Statements to Other Parties &
Material Facts
• EAs & SPs to safeguard clients confidential
information
• Before marketing property, SP to discuss with
sellers to ascertain material facts for buyers in
their buying decision
90 of 106
Material Facts
• Following considered material facts and important
information to be disclosed to buyers or tenants
a) Approved use
b) Land Area/Strata Floor Area
•
•
•
From Cert. of Title or Certified Plans done by surveyor
From developer or OTP/S&P signed with developer
For strata titled properties
–
–
–
Strata Certified Plan when approved by Chief Surveyor, would
contain floor area, void (if any)and total area of each storey
If not approved yet, schedule of strata units, or form provided
by developers
OTP and/or S&P agreement
91 of 106
Material Facts
• Following considered material facts and important
information to be disclosed to buyers or tenants
c) Tenure – for leasehold, include start date of lease
d) Other information;
i.
ii.
iii.
iv.
Loan shark harassment
Bankruptcy issues
Recent death from unnatural causes
Any defects that affects the property value or suitability of use
as dwelling; e.g. pests, spalling concrete, water leakage, hazards
such as environmental hazards or natural disasters
v. Unauthorised additions, structures, alterations, renovations
vi. Any caveats lodged
vii. MOP for HDB resale flats
92 of 106
3.8 Statements to Other Parties &
Material Facts
• For sale of undivided interest or unregistered
land, SP should advise client to seek legal advise
– Example 1:
• SP represent buyer. Land has 2 houses (#5 & #7).
Revealed that buyer will purchase half share of the land
and house #5. SP to advise buyer to seek legal advise
before issuing option fee
– Example 2:
• SP represent vendor of unregistered land. Buyer
(unrepresented) must be informed as such and be
advised to seek legal advice before making purchase
93 of 106
3.8 Statements to Other Parties &
Material Facts
• In divorce cases:
– Where court order is issued for sale, written consent from
either owner to conduct sale; or from the party granted by
the courts
– No court order, then consent from all owners to be
obtained
• In HDB cases, where spouse is not co-owner/occupier of
flat, spouse needs to endorse on Resale Application form
– Also sign “Spouse Consent to Resale” in presence of HDB
Customer Service Manager
– Form to be signed in presence of Notary Public if not in
Singapore or residing overseas
94 of 106
3.9 Marketing Property for En Bloc Sale
• SPs to note
– Shall not harass owners to consent to en bloc
sales
– SPs should not withhold information which should
be shared under Land Titles Act; e.g. percentage
of owners who have already signed the Collective
Sales Agreement
95 of 106
4. COMMUNICATING OF ALL OFFERS
AND EXPRESSIONS OF INTEREST
96 of 106
4.1 Communication with Clients
• CEPCC requires EAs & SPs to render professional
and conscientious service to clients, including
communicating with them
• SPs should be clear when passing information
that is factual or based on opinion
97 of 106
4.2 Conveying Offers & Expressions of
Interest
• EAs & SPs to convey every offer, proposal, or
expression of interest truthfully, accurately, and
objectively and as soon as possible and not withhold
or sieve out any offers or expression of interest
• SPs to record all offers, verbal or written including:
•
•
•
•
Date & time of offer/expressions of interest
Name & contact details of person making offer
Amount offered or indicated
If appropriate, client to sign Letter of offer
• SPs to retain copies of all offers (whether resulted in
transaction or not) for a period of 1 year.
98 of 106
4.2 Conveying Offers & Expressions of
Interest
• SPs to advise client on offers, and maintain
confidentiality of offers and discussions with
client
• If potential buyer/tenant expresses interest but
does not give an offer, SP should seek clients
instructions to wait for offer or to consider offers
by other potential buyers/tenants
• If multiple offers are received, SP to seek clients
instructions to close with highest offer, or to ask
other interested parties to raise their offers.
99 of 106
5. COMPLETING THE PROPERTY
TRANSACTION
100 of 106
5.1 Follow-up Actions after Agreement
is Reached
• Once agreement is reached, SP to ensure
Prescribed Estate Agency Agreement is signed if not
signed earlier
• SP to explain to buyer on fees payable such as;
• Option fee, option exercise fee, and completion
payment/progressive payments
• SP to advise clients to seek advice of relevant
professionals where appropriate
101 of 106
5.1 Follow-up Actions after Agreement
is Reached
• SPs are to explain the clauses of the OTP/S&P or TA,
and highlight that these are legal documents. Also
include payments and dates due where relevant.
• SPs to make copies of signed documents for all
signatories as soon as possible after signing.
Documents to be dated same day as they were
signed.
102 of 106
5.2 Handling of Transaction Money
• EAA (Cap. 95A) prohibits EAs and SPs from
holding or handling transaction money on behalf
of any party in relation to sale and purchase of
any property situated in Singapore or lease of
HDB property.
103 of 106
5.3 No Money Lending or Advances by
EAs & SPs
• No lending or advancing money to clients except
in the payment of stamp duty for rental
transactions before reimbursement by client
• EAs & SPs prohibited from introducing, referring,
or recommending moneylenders to clients
• Also not accept client referral from
moneylenders, their employees, their agents or
their representatives.
104 of 106
5.4 Handing Over Property
• SP to ensure inventory list is prepared before
handing over – both sale and/or lease
• Inventory list to be signed by seller/landlord and
buyer/tenant and will form part of transaction
documentation, including photographs if any
• Where appropriate take photographs and include
notes on damages such as chips, scratches, cracks
etc
105 of 106
Summary
• The PSM is to strictly complied with
• To read the PSM in conjunction with the Estate
Agents Act and the relevant PGs and PCs
• When in doubt, seek clarification with the estate
agency
• Finally, put clients’ interests before your own
106 of 106