Enough of rogue agents

Source : Today - 1 Aug 2008

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.”