Oral answer by Ministry of National Development on educating first-time home buyers or sellers on non-exclusive agreements

Nov 29, 2022

Question No: 3655

Question by: Dr Tan Wu Meng

* 3655 Dr Tan Wu Meng asked the Minister for National Development whether there is any requirement for individuals signing an exclusive estate agency agreement to be formally advised of the option of signing a non-exclusive agreement, especially in situations where the individual is entering into a property transaction for the first time and may not be aware of the existence of non-exclusive agreements.

Answer:

          Mr Speaker, Sir, an Estate Agency Agreement (EAA) is a contract between a consumer and a property agency and agent for the performance of estate agency work. The agreement protects the interests of both parties by providing contractual clarity in the property transaction.

Under the Council for Estate Agencies (CEA)'s Code of Ethics and Professional Client Care, a property agent must explain the meaning and consequences of the agreement to the client and give the client sufficient time to read and understand the content, so that the client can make an informed decision whether to enter into the agreement with the agent. Property agents who fail to do so may be issued a warning letter, imposed with financial penalties of up to $100,000 and/or have their registration suspended or revoked. There is no specific requirement for a property agent to advise the client on the options between an exclusive and a non-exclusive agreement.

In addition, CEA actively promotes consumer education. CEA continues to work with relevant agencies, for example, HDB and CASE, and the real estate agency sector and online property portals to educate property consumers about the purpose of signing an estate agency agreement, the differences between an exclusive and a non-exclusive agreement, and consumers' obligations under each type of agreement. Consumers are advised to choose and sign the type of estate agency agreement based on their needs and preferences.