Surge in complaints from home buyers

Source : Straits Times – 21 Sep 2009

THE upbeat property market has led to a surge in the number of real estate-related complaints from home hunters.

The Consumers Association of Singapore (Case) said the number of such complaints it received started to surge from May.

It has received 619 complaints in the first eight months of the year, of which 89 cases and 107 cases were lodged in July and last month respectively.

The bulk of the complaints relate to HDB flat transactions, said Case executive director Seah Seng Choon.

The Singapore Accredited Estate Agencies (SAEA) said it received 141 public inquiries, feedback and complaints in July and last month, which is more than what it would typically get in a full year. This compares with just 26 cases in the first half of this year.

Another six complaints have poured in during the first two weeks of this month.

About 40 per cent of the 141 cases comprise complaints against property agents or disputes on commission payments, and so on, said SAEA chief executive Tan Tee Khoon.

These cases include referrals from the HDB or Inland Revenue Authority of Singapore, as well as from MPs’ Meet-the-People sessions, he said.

However, the other body that aggrieved real estate consumers head to – the Institute of Estate Agents – said it has not seen any recent rise in complaints against its members.

Dr Tan said there are often overlaps in complaints, as a consumer may sometimes go to all three bodies.

In cases involving the behaviour of property agents, SAEA said it would have problems resolving a dispute concerning an agent who is not accredited with it, and who refuses to cooperate.

Property agency bosses have said compulsory accreditation is a key thing needed by the industry, which has low entry barriers.

They are hoping that a government review of the regulatory framework for real estate agents announced last month will raise standards in the industry.

National Development Minister Mah Bow Tan recently said there was a need for some legislative changes and that the authorities may need to set up an agency.

At least one property agency boss has called for the establishment of a neutral party – instead of the associations – to enforce rules in the industry.

One irate HDB flat buyer, Ms Xie Ruzhen, is hoping the review gets to the bottom of the problems facing the largely fragmented sector of real estate agents.

Among her complaints, she felt that she had been duped into signing an agreement requiring her to pay her agent a 1 per cent commission.

She was intending to pay a 0.5 per cent commission after having recently forked out a 2 per cent commission to the agent for his service in selling her previous flat.

The media consultant has been told by SAEA that not all agencies and agents are accredited, and that those who are not accredited are not obligated to respond to it.

The association is ‘almost powerless’, she said. ‘An agent who wants to get away with the devil just doesn’t join the association.’