The new Estate Agents (Amendment) Bill will see the maximum fine increased to $200,000 for real estate agencies and $100,000 for property agents.
The Estate Agents (Amendment) Bill, which was passed in Parliament on Tuesday (5 May), raised the maximum fines that could be imposed on errant real estate agencies and property agents.
Under the bill, the maximum financial penalty that can be imposed to estate agencies was increased to $200,000 per case and $100,000 per case for property agents, up from $75,000 previously.
During the second reading of the Bill, Minister of State for National Development Zaqy Mohamad explained that the new maximum penalty for estate agencies will better match the higher commissions they can potentially earn compared to individual property agents.
The $100,000 maximum fine for property agents will also better match the commissions they receive, which are generally lower compared to that of estate agencies, but can still be quite high, he said.
The Bill also outlines the duties of estate agents and property agents in the prevention of money laundering and terrorism financing, as recommended by inter-governmental body Financial Action Taskforce (FATF).
This comes after the Singapore Police Force (SPF) seized over $27 million in criminal proceeds from one of the biggest Ponzi scams in China in 2016.
“The monies were transferred to Singapore to purchase a $23.8 million Sentosa Cove bungalow, with the purchase falling through when one of the Ponzi scheme’s key accomplices was arrested in China,” noted Zaqy.
Although investigations showed that no local party was involved, the SPF successfully prosecuted the conveyancing lawyer and real estate salesperson involved in the planned property acquisition, he said.
“Both of them knew that their client, the bungalow buyer, had been arrested in China for involvement in a Ponzi scheme. But clearly, both did not fulfil their obligations to lodge Suspicious Transaction Reports with the Police.”
The Bill mandates real estate agencies and property agents to conduct due diligence checks on their customers, reporting any suspicious transactions to the Suspicious Transaction Reporting Office (STRO).
Real estate firms are also required to keep records of the due diligence checks conducted, which could be inspected by the Council for Estate Agencies (CEA).
The Bill also allows CEA to impose a fine of up to $5,000 to errant estate agents and property agents.
“This provides better deterrence against repeated and less serious breaches that do not warrant action by the Disciplinary Committee, but are serious enough to merit punishment,” said Zaqy.
Previously, CEA could issue a “letter of advice” or refer serious cases to a disciplinary committee, which would impose a fine, and revoke, suspend or impose conditions on an estate agency’s licence or a property agent’s registration.
The minister, however, noted that such disciplinary proceedings can be resource-intensive, while the “letter of advice” has limited deterrent and punitive effect.
The Bill also enhance CEA’s investigative powers, such as requiring a person “to attend before an inspector, give statements, and provide documents to be inspected, copied or extracted”.
Providing false or misleading information to the inspector, or refusal to comply with the requirements will be considered an offence under the Bill.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email firstname.lastname@example.org