PropNex rolls out measures to win customers’ trust and confidence

IF YOU discovered that the agent you had hired to sell your flat was also quietly acting for the buyer, you’d probably be hopping mad and looking for some kind of recourse. Unfortunately, there is nothing by way of laws over real estate practices that you can turn to.

Property agencies like PropNex, however, are banking on self-regulation to win over hearts and minds. But some analysts say such internal policies may not go far enough to weed out bad practices.

Among the initiatives unveiled yesterday by PropNex, which has the biggest pool of housing agents here, are: No bankrupts allowed to be agents, compulsory professional indemnity insurance for all its agents and a panel to discipline errant ones.

The measures came after the company cut ties with some 2,800 inactive or non-performing agents last week, “to ensure the professionalism and reliability of its associates”.

By barring bankrupts from joining the firm, “consumers will be shielded from interaction with rogue agents riding on the brand to misappropriate funds due to cash flow problems,” said PropNex chief executive Mohd Ismail.

“There is no regulation in any form stating that bankrupts cannot be housing agents. PropNex imposed this rule to safeguard consumers from fraudulent attempts,” he said, warning that “customers cannot seek financial recovery from a bankrupt”.

Such measures are a “right step forward for the industry” because “the entry barrier into this occupation is not very high”, said DTZ Debenham Tie Leung executive director of consulting and research, Mrs Ong Choon Fah.

Several firms have also started mandating that their agents buy professional indemnity insurance.

Insuring PropNex’s remaining 5,000 agents is Tenet Insurance. In the event of any professional negligence leading to a financial loss, the insurance will help cover the liability to the customer seeking financial recovery.

Dennis Wee Properties also made such coverage compulsory for its 2,500 agents, said the firm’s director Chris Koh.

While giving consumers a channel to seek recovery “should help to protect the consumer”, Colliers International’s director of research Tay Huey Ying noted: “But I am not sure whether this will help agents be more vigilant in their representation as they now know they have insurance.”

But some of their employers will also not :hesitate to go to the authorities, besides simply terminating the errant agent’s service.

Mr Eugene Lim, assistant vice-president of real estate agency ERA Singapore, said the company had a disciplinary board chaired by three senior directors. “If (an agent is) guilty of misconduct, we will terminate the agent’s services and notify the Inland Revenue Authority of Singapore of the agent’s misconduct,” he said.

Similarly, Mr Koh from Dennis Wee Properties said: “We will file a police report on errant agents.”

They will also be shamed by having their names published in online newsletters, he added.

Will such self-regulation be enough?

The Institute of Estate Agents said: “They can only be good for the industry if every real estate agency takes pride by ensuring their agents are providing professional services and adhering to the code of conduct and ethics.”

Source : Today – 1 Aug 2008

PROPERTY agency PropNex has unveiled a range of initiatives aimed at improving the quality of its agents.

The measures range from ensuring that agents are properly insured to proficiency tests covering subject like ethics and HDB regulations.

PropNex chief executive Mohamed Ismail said the new benchmark could result in 500 below-par agents being sacked by the end of the year.

This will be in addition to its drastic axing of 2,800 inactive agents last week.

‘It’s no longer a numbers game,’ said Mr Ismail yesterday. ‘We’re focusing on quality rather than quantity. We want to help move the industry towards professionalism.’

PropNex’s actions follow a spike in consumer complaints about estate agents which has resulted in the profession being labelled a ‘cowboy industry’.

Consumers lodged 1,113 complaints about the property industry last year, up from 991 in 2006 and 672 the year before.

The PropNex measures include a new in-house practising certificate, compulsory for all agents operating under the firm’s name.

Agents must also take out professional indemnity insurance that protects them against the cost of lawsuits and offers consumers compensation when agents mess up. New entrants and inactive agents must also pass a new proficiency test – in the form of a multiple-choice exam – that will cover subjects like code of conduct and ethics, the HDB and private property markets.

PropNex’s move is the latest in a series of industry initiatives aimed at raising the bar for agents.

The Institute of Estate Agents (IEA) launched a new practising certificate for members last year. The IEA represents about 1,600 agents and aims to act for the entire industry eventually.

There is also a three-year-old Singapore Accredited Estate Agencies scheme, which conducts the original Common Examination for House Agents (Ceha).

A scaled-down version of the Ceha was launched recently, backed by the newly formed Association of Singapore Estate Agencies. This aims to rally bosses to raise standards.

Industry players say there are just too many schemes and none is compulsory.

Agency boss Albert Lu of C&H Realty said the certificates ‘won’t make a difference if an agent is intent on illegal activities’.

The solution is to have a central body that functions like the Law Society with the power to discipline members. ‘Rogue agents can then be fined or suspended; it solves a lot of problems in the industry,’ said Mr Lu.

ERA Realty and HSR Property Group say they already have in place high standards for their agents.

ERA has about 2,800 agents, all of whom must go through a training regime. It also terminates about 500 inactive agents a year.

Neither ERA nor HSR requires agents to have indemnity insurance.

There are an estimated 30,000 agents in the market – all unregulated. The Inland Revenue Authority of Singapore vets only estate agencies, but not individual agents.

Source : Straits Times – 1 Aug 2008