Estate Agents (Amendment) Bill

Order for Second Reading read.

2.34 pm

The Minister of State for National Development (Mr Zaqy Mohamad) (for the Minister for National Development): Mr Speaker, on behalf of the Minister for National Development, I beg to move, “That the Bill be now read a Second time.”

The Estate Agents Act establishes the Council for Estate Agencies (CEA), which administers the legislative and regulatory framework for estate agents and salespersons.

An “estate agent” is a person or business entity that does estate agency work, and is commonly known as the estate agency or property agency.

A “salesperson” is, among other things, an individual who, in the course of the individual’s employment or engagement by an estate agent, does estate agency work, and is commonly known as a property agent.

The real estate agency industry plays an important role in facilitating property transactions in Singapore. Buying or selling property is a major decision for many Singaporeans, and is one of the single largest investments that they will make. Therefore, it is important that they receive the best advice before making such a transaction.

Many Singaporeans rely on estate agents and salespersons for property-related advice. It is essential that they do their work professionally and ethically and give their clients accurate advice that is in their clients’ best interest.

With this in mind, the Estate Agents Act was enacted in 2010, to better protect consumer interest and raise the professionalism of the real estate agency industry. A three-pronged approach was adopted.

First, strong government regulation. All estate agents must be licensed and all salespersons must be registered with the CEA. In addition, estate agents and salespersons have statutory duties to ensure professional and ethical practices. To ensure compliance, CEA has investigative powers and disciplinary levers to identify and punish errant estate agents and salespersons. CEA also has powers to take prosecution action in Court for criminal offences under the Estate Agents Act.

Second, greater industry accountability. Each salesperson must be registered through a licensed estate agent, who is primarily responsible and accountable for the supervision and management of the salesperson.

Third, better consumer education. Public education is a key part of CEA’s work. A public register was set up to allow the public to access information about their estate agents and salespersons before engaging their services, including records of any offences committed and disciplinary penalties.

Almost 10 years on, the number of complaints against estate agents and salespersons received by CEA has dropped by 34%, from 1,170 complaints in 2011 to 777 in 2019. In particular, the number of complaints which led to prosecution or disciplinary action, has also dropped. The number of concluded cases involving misrepresentation of property-related information to clients has declined by 98%, from 404 cases to 2011 to 10 cases just in 2019. And the number of concluded cases involving dual representation, which is a serious offence, has seen a 97% decline, from 59 cases in 2011 to two cases in 2019.

Sir, I thank the real estate agency industry for improving our service standards and governance this past decade.

While the number of complaints has gone down, there remains scope for improvement in three areas: first, to strengthen Singapore’s levers against money laundering and terrorism financing in the real estate agency industry; second, to strengthen CEA’s disciplinary levers to better deter and punish errant estate agents and salespersons; and last, but not least, to enhance CEA’s investigative powers to better enable CEA to identify and take action against errant estate agents and salespersons.

These stronger levers will ensure that estate agents and salespersons conduct their business professionally and ethically, so that we can protect the interest of consumers. Let me go through these areas in turn.

First, the Bill gives effect to the Financial Action Taskforce (FATF) Recommendations on the preventive measures in the real estate agency industry to strengthen Singapore’s levers against money laundering and terrorism financing. FATF is an inter-Governmental body established in 1989 to set out national and international standards to promote the effective implementation of measures to combat money laundering and terrorism financing.

The FATF Recommendations form part of the broader international financial sector standards. They are recognised and used by the International Monetary Fund (IMF) and the World Bank in their assessment of a country’s financial sector.

Since 1992, Singapore has been a member of FATF and has put in place a very strong legislative and regulatory framework to detect, deter and take action against money laundering and terrorism financing. Singapore has committed to periodic peer assessments to ensure compliance with FATF Recommendations.

This Bill continues our on-going efforts to combat money laundering and terrorism financing. The use of real estate to launder large amounts of illegal funds is a known method for money laundering. It opens Singapore’s non-financial and financial sectors to criminal abuse.

Safeguards are essential to detect illegal sources of funding for properties early, so that such transactions can be identified and blocked upstream.

As intermediaries of property transactions, estate agents and salespersons have a part to play to counter these threats. FATF has identified the real estate agency sector as crucial gatekeepers against money laundering and terrorism financing.

One example of money laundering occurred in 2016, where the Singapore Police Force (SPF) seized more than $27 million in criminal proceeds from one of China’s biggest Ponzi schemes. 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.

While investigations did not reveal any local parties being involved, SPF successfully prosecuted the real estate salesperson and conveyancing lawyer involved in the planned property purchase. Both of them knew that their client, the bungalow buyer, had been arrested in China for involvement in the Ponzi schemes. But, clearly, both did not fulfil their obligations to lodge Suspicious Transaction Reports with SPF.

Currently, under CEA’s practice guidelines, estate agents and salespersons are required to fulfil specific duties to counter potential money laundering and terrorism financing. Failure to comply with CEA’s guidelines may result in disciplinary action under the Estate Agents Act.

However, FATF Recommendations require such duties and the penalties for non-compliance to be provided in "any legislation approved through a Parliamentary process". The FATF interprets this to mean that the duties must be set out in primary legislation. On this basis, setting out the duties to counter potential money laundering and terrorism financing in CEA’s practice guidelines does not meet FATF’s standards for preventive measures, as the duties and penalties must be spelt out expressly in the Estate Agents Act. Hence, to comply with FATF Recommendations, clause 8 will introduce a new Part IVA in the Estate Agents Act on the prevention of money laundering and terrorism financing.

First, the new sections 44A to 44D of the new Part IVA set out the duties of estate agents and salespersons on prevention of money laundering and terrorism financing in the Estate Agents Act. It requires them to conduct customer due diligence checks and report any suspicious transactions to SPF’s Suspicious Transaction Reporting Office (STRO). For estate agents, they must also keep records of the due diligence checks that are conducted, which CEA may inspect. Details of the duties will be prescribed in subsidiary legislation.

Second, the new section 44E of the new Part IVA will provide that disciplinary action can be taken for non-compliance of the requirements under Part IVA. I will elaborate more on CEA’s disciplinary levers in the second area of the Bill.

To be clear, these duties are not new to the real estate agency industry and are already provided for under the CEA’s practice guidelines today. Disciplinary action can also be taken against estate agents and salespersons who do not comply with these practice guidelines. The Bill takes the relevant obligations to counter money laundering and financing of terrorism from the practice guidelines, and inserts them as express provisions in the Act, in order to comply with FATF Recommendations.

Let me move on to the second key area of the Bill – strengthening CEA’s disciplinary levers.

Currently, CEA has two disciplinary levers to punish errant estate agents and salespersons.

First, CEA can refer the case to a Disciplinary Committee, nominated from CEA’s Disciplinary Panel comprising practising solicitors, academics, professionals from the real estate industry as well as members from other professions.

The Disciplinary Committee has the power to impose a financial penalty and revoke, suspend or impose conditions on an estate agent’s licence or a salesperson’s registration. The proceedings before a Disciplinary Committee can be a resource-intensive process. So, CEA generally refers more serious cases, such as cases which involve dishonesty or financial losses to the client, to the Disciplinary Committee.

The second disciplinary lever for CEA is to issue a “letter of advice”. However, this has limited deterrent and punitive effect as the fact that a “letter of advice” has been issued cannot be published in CEA’s public register under the Estate Agents Act. The letter of advice also does not provide for an accompanying penalty.

Hence, the Bill will amend the Act to provide CEA with more options to deal with errant estate agents and salespersons without having to refer cases to the Disciplinary Committee.

Clauses 6 and 11 amend sections 36 and 49 of the Act respectively, to allow CEA to censure errant estate agents and salespersons, and publish the censure on the public register. It also allows CEA to impose a maximum financial penalty of $5,000 per case. 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.

As a safeguard, CEA will have to first give notice of its intent to censure or issue a financial penalty, and allow the estate agent or salesperson to make representations before deciding on the penalty to impose.

Overall, the new powers to censure and impose a financial penalty provide more calibrated levers against errant estate agents and salespersons.

In addition, to better deter serious breaches, clause 13 of the Bill will amend section 52 to increase the maximum financial penalty the Disciplinary Committee can impose to $200,000 per case for estate agents, and $100,000 per case for salespersons, up from $75,000 today.

A tiered structure distinguishing the maximum financial penalty for estate agents and salespersons is not unique, and can be found in other regimes that regulate professions such as accountancy, where different limits apply to the accountants and the accounting corporations.

All cases undergo a disciplinary process, where both CEA and the respondent have the opportunity to present their case to the Disciplinary Committee, before the Disciplinary Committee decides on the penalty.

For estate agents, the new maximum financial penalty of $200,000 per case will better match the higher commissions estate agents can potentially earn, compared to the individual salespersons.

The higher financial penalty limit will therefore give the Disciplinary Committee more flexibility to impose adequate punishment on estate agents, depending on the facts of each case.

Similarly for salespersons, the new maximum financial penalty of $100,000 per case will better match the commissions received by salespersons, which are generally lower than that of estate agents, but can also be quite high. It will strengthen the deterrence against serious breaches.

Mr Speaker, I will touch on the third key area of the Bill, which is to enhance CEA’s investigative powers.

The Estate Agents Act provides CEA with powers to investigate disciplinary breaches, and additional powers to investigate criminal offences, such as acting as a salesperson without being registered, and holding property transaction monies.

To better enable CEA to identify and take action against disciplinary breaches and criminal offences, clauses 9, 10 and 17 of the Bill amend the Act to clarify and enhance CEA’s investigative powers on two fronts.

First, clause 10 will repeal sections 46, 47 and 48 of the Act and re-enact sections 46 and 47 to clarify and enhance CEA’s powers to collect evidence in investigations under the Act, including investigations into disciplinary breaches.

Under the re-enacted section 46, CEA inspectors may, among other things, require any person to attend before an inspector, give statements, and provide documents to be inspected, copied or extracted.

This is for the purpose of ascertaining whether the Act has been or is being complied with or for the purposes of any investigations under the Act.

Clause 17 amends section 64 of the Act to make it an offence if the person, without reasonable excuse, does not comply with such requirements, or provides false or misleading information.

These changes will better enable CEA to obtain the necessary evidence from salespersons, estate agents and witnesses for disciplinary breaches.

Second, in view of technology adoption in the industry, the Bill will allow CEA inspectors to require any person to provide, among other things, any document, computer or computer output to be inspected, copied or extracted.

This is for the purpose of ascertaining whether the Act has been or is being complied with or any investigation under the Act, whether of disciplinary breaches or criminal offences.

Clause 9 inserts a new section 44F in the Act to define, among other terms, the terms “computer”, “computer output” and “document”. “Computers” include electronic devices, and “computer output” and “document” include the content and output from such electronic devices, such as WhatsApp chat logs or emails.

Clause 10 repeals and re-enacts section 46 to allow CEA inspectors to specify the form and manner in which, among other things, information, document, computer or computer output is to be provided to the inspector. This will also allow inspections to be conducted electronically or at premises under CEA’s control, instead of only at the estate agent’s premises.

The re-enacted sections 46 and 47 provide that, in the investigation of disciplinary breaches, CEA inspectors may take possession of any document, computer, computer programme, computer software or computer output when they enter into the premise of an estate agent, if certain criteria are satisfied.

For the investigation of criminal offences, CEA inspectors may exercise similar powers in any premise, whether or not in the possession or control of an estate agent.

As a safeguard, the Bill will provide that these powers of taking possession in the re-enacted sections 46 and 47 will only be allowed under specific conditions, namely:

Where the inspection, copying of or extraction of content from the document or electronic device cannot be performed reasonably without taking possession;

Where the document, electronic device or its content may be interfered with or destroyed; or

Where the document, electronic device or its content are required as evidence for proceedings under the Act.

These enhancements to CEA’s investigative powers will better enable CEA to identify and take action against errant estate agent and salespersons. To prevent such estate agents and salespersons from trying to evade punishment by leaving the industry, clauses 5 and 16 complement the amendments by making clear that, after disciplinary proceedings have commenced, even if the estate agent’s licence or salesperson’s registration are not renewed, investigations may continue and disciplinary action can still be taken against them.

The Bill will also make other changes to improve and clarify the regulatory framework and to facilitate CEA’s operations.

It makes clear that CEA can collect and publish transaction records of estate agents and salespersons on the public register, to help consumers make more informed decisions.

Clause 7 inserts a new section 43A, which requires estate agents and salespersons to submit transactions records to CEA, and provides that non-compliance without reasonable excuse or the submission of false information knowingly is an offence.

Clause 6 amends section 36 to, among other things, make it clear that CEA can publish the transaction records.

Clause 3 amends section 15 to provide, among other things, that where information is supplied to the public pursuant to any written law, including these published transaction records, CEA is protected from liability for any loss or damage suffered by any member of the public if the supply of the information is made in good faith, with reasonable care and in the ordinary course of the discharge of the duties of CEA.

Clause 18 amends section 70 to allow service of documents by electronic means, including email, to bring convenience to both the industry and CEA. And this will also update the Act in view of technology adoption and enhance CEA’s operational efficiency.

Clauses 2, 4 and 19 amend provisions of the Act to allow CEA to accredit Continuing Professional Development (CPD) courses.

CPD courses are a renewal requirement for licences and registrations, to ensure that estate agents and salespersons possess the necessary knowledge to provide professional service to their clients.

The rationale for this change is for CEA to ensure the courses meet CEA’s guidelines.

Lastly, Clause 12 will amend section 51(1) to allow CEA to determine the size of the Disciplinary Panel. This provides CEA the flexibility to increase the size of the Panel beyond the current limit of 20, should the caseload increase in future.

Mr Speaker, this Bill is important as it ensures our compliance with the FATF Recommendations and signals our commitment to be a responsible member of the international community. It also better enables CEA to protect consumer interest, punish errant estate agents and salespersons, and operate more efficiently.

CEA conducted industry consultation on the key changes. The respondents, comprising estate agents, salespersons and industry associations, were supportive or were neutral to the changes.

The amendments are largely targeted at CEA’s enforcement against errant estate agents and salespersons. For the majority of the real estate agency industry, who have been following the requirements and providing ethical and professional services to their clients, we thank you for your cooperation and efforts. Mr Speaker, I beg to move.

Question proposed.

2.55 pm

Mr Saktiandi Supaat (Bishan-Toa Payoh): Mr Speaker, Sir, buying a property, especially a house that one plans to live in, is possibly one of the largest commitments one would make in his life. Despite attempts to cut out the middle man through websites, apps and direct sale on social media, the demand for estate agents remains high. This proves the need for professional, ethical estate agents who deliver their services while looking out for the needs of their consumers.

Since the Council for Estate Agencies (CEA) was established in 2010 to handle complaints against errant estate agents, the complaints have in fact fallen over the years. But in recent years, the numbers have been going up again. It was 894 in 2018, highest in six years since 2013. The number has been somewhat stable in the past five years, but we should not rest on our laurels, and I appreciate the Government’s effort to bring this number down. We have to bear in mind that these reports may not even include others who may be less knowledgeable about their entitlements and how to make a report. Elderly selling their properties to right-size under the Silver Housing Scheme, or foreigners renting property, come to mind.

A recent high-profile case last year saw a property agent fined $30,000 and suspended for 12 months. He had made offers to a seller of a condominium unit without his client’s knowledge, with the purpose of negotiating a higher commission for himself. This resulted in the client making a final offer which was higher than necessary and suffering a loss of between $20,000 and $30,000. So, the heavy penalty was certainly justified. The incident came to light only because the client decided to contact the seller directly.

I would like to share an incident concerning a HDB transaction. No official complaint was lodged, but I learned about it from a Singaporean whose family lives in an HDB flat and has been moving house a couple of times. Back when the elderly couple lived together with their eldest son who was unmarried, they wanted to move out from their first BTO flat to a larger house. Their property agent had suggested they register the new house under their son’s name so they could avoid paying the Resale Levy. They agreed, without questioning possible consequences. A couple of years later, the son got married, wanted to move out and get his own house, so the ownership had to be transferred. The levy not only had to be repaid, but with interest. On top of that, the son now has one subsidised BTO flat under his name. The agent did not have selfish intentions, but due to his inadequate advice, his clients incurred a financial loss. And the mistake would follow them for the rest of their lives.

Some real estate agents place their self-interests far above their clients’. Others observe the ethics but lack the knowledge and empathy to engage and understand the layman consumers, which results in costly mistakes.

The HDB laws can be complex to some to ensure public housing remains affordable and grants stay relevant to the various demographics, while preventing people from profiteering from these subsidies. Therefore, due to the complexities of the policies, there can be a certain amount of confusion when it comes to transactions. That is why it is important to have estate agents who are knowledgeable about the policies and capable of helping their consumers understand them.

To further enhance the standards of the real estate industry, I hope more training and courses can be made available to estate agents to hone their communication skills, keep their knowledge up to date and reinforce information about the laws and ethics to abide by. I think that this will help to reduce the amount of dissatisfaction towards the industry, especially in cases where unprofessional conduct was not intentional.

I note that real estate agents can benefit from the SkillsFuture Study Award for the real estate agency industry. But how many are attending such courses, and are the courses truly relevant and specific to their services? I also note that some large real estate agencies do provide opportunities for their agents to upskill themselves, but not all do so. So, I hope the Government can encourage more agents to upskill themselves through SkillsFuture and to meet CEA's guidelines.

Indeed, real estate agencies need to take greater responsibility for the professionalism of their agents and the industry as a whole. With the new regulations, are agencies capable of assessing the compliance and duties, as well as the code of conduct of their estate agents, as Minister of State Mr Zaqy mentioned earlier? There may be a need for them to beef up or set up compliance units. I would like to ask: what is the average waiting time for consumers to wait to get their grievances addressed and can this be improved on? What role do real estate agencies play in investigations and disciplinary actions against errant agents registered under their agencies? I think the consumers should be able to go to agencies to seek help and give their feedback on errant real estate agents. This may help to filter out cases involving misconduct, from unprofessionalism and poor service. Of course, this should not be done at the expense of consumers having to wait longer.

Property transactions incur huge amounts of money and, certainly, it is something to watch out for over concerns of money laundering and financing of terrorism. The high property prices made it possible for millions to be moved across borders, especially when it involves the purchase of buildings, factories and others. I note that on this matter, the regulations aim to have the real estate industry comply with international standards. But would these be the same standards as those imposed on the financial services sector? If not, how does it differ from MAS guidelines on Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT)? For example, just like for the financial sector, AML/CFT, which takes a preventive approach that combines tough licencing and comprehensive reporting requirements, strict AML/CFT regulations and risk-based supervision of the relevant financial and non-financial sectors, what is the extent at which these agencies understand the AML/TF risks and how it can be enhanced? Most importantly, how can we promote a culture of compliance within the real estate agencies?

Singapore's property market plays a crucial role in driving our economy and nation building. Private properties and land attract significant amounts of foreign investment. Meanwhile, property transactions often play out as milestones and significant developments in the lives of a typical Singaporean. For example, when one is thinking of expanding their family, moving nearer to schools or workplaces, having ageing parents move back with them to facilitate better care, or, in the case of retirees, to right-size their homes so that they can live more comfortably and so on. Over the years, professional standards of property agents and estate agents have improved and I am glad that the Government is constantly reviewing these standards to ensure that it moves with the times. Mr Speaker, Sir, I support the Bill.

Mr Speaker: Mr Melvin Yong.

3.03 pm

Mr Melvin Yong Yik Chye (Tanjong Pagar): Mr Speaker, I stand in support of the Bill, which seeks to ensure that the primary legislation that governs the actions of our property agents continues to remain relevant amid the rapid changes in our real estate landscape and the corresponding evolving industry practices. However, I have a few questions and clarifications for the Minister of State.

Property agents play an important role in the home ownership journeys of many Singaporeans. With over 90% of our population homeowners, many will rely heavily on property agents for their property transactions. Therefore, I support the proposed increase in the maximum financial penalty that the Council of Estate Agencies (CEA) Disciplinary Committee can impose, from the current $75,000 to $200,000 for licensed estate agents and $100,000 for registered salespersons. This will, hopefully, serve as an effective deterrent against unethical and unprofessional conduct.

The proposed increase in financial penalties is also timely, as 2019 saw a number of high-profile cases of agent misconduct publicised in the news. Could the Minister of State provide an update on the nature and the number of complaints against property agents in 2019 and how many agents have been sanctioned by the CEA as a result?

For minor disciplinary breaches, I would like to ask if the Ministry could consider a demerit points system, so that first-time minor breaches by property agents, especially those who are new to the industry, such as advertising-related breaches, would not result in a Letter of Censure or a financial penalty. Additionally, having the demerit points system made public would also serve as a simple, yet effective deterrent against the commission of such breaches.

Mr Speaker, I also support the Bill's proposed framework which will require licensed estate agents and registered salespersons to comply with the prevention of money laundering and terrorism financing. In addition to fulfilling our obligations as a member of the Financial Action Task Force, the framework will also remind all property agents of their duties to perform the necessary due diligence checks.

However, I note, as the Minister of State mentioned in his speech, that the proposed anti-money laundering and anti-terror financing requirements are already covered under existing CEA regulations and Practice Guidelines. So, just to be clear, can the Minister of State confirm that the proposed framework will not result in any material change to the way due diligence and suspicious transactions reporting need to be conducted henceforth?

Mr Speaker, the COVID-19 circuit breaker measures have impacted the livelihoods of many property agents, as they have had to defer key activities, such as viewings and property launches. Some, especially the younger agents, have been able to adapt and embrace technology to reach out to prospective clients virtually. With digital literacy and digital marketing skills increasingly viewed as critical core skills, could the Ministry consider reviewing the Continuing Professional Development (CPD) Framework and list these digital skills as Professional Competencies?

Lastly, considering the impact of COVID-19 on the industry, I would like to ask the Ministry to consider waiving licence renewal fees for all estate agents and registered salespersons for the next renewal cycle. This will help in some small way to support the profession at this very difficult time.

Mr Speaker, the real estate industry has been undergoing profound shifts in the past few years. The proposed amendments in the Bill will empower the CEA to keep up with evolving industry practices and help deter errant and unethical behaviour by rogue property agents. This would better protect both property buyers and property sellers. With that, I support the Bill.

Mr Speaker: Minister of State Zaqy.

3.08 pm

Mr Zaqy Mohamad: Mr Speaker, Sir, I thank the Members for their comments and their support of the Bill. Let me address the issues raised.

First, there were several questions about the duties related to the prevention of money laundering and terrorism financing.

The Bill provides for duties to conduct customer due diligence checks, to keep records of the checks and relevant documents and to also submit Suspicious Transaction Reports, as required under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act or CDSA.

These are duties aligned with the international standards set by the Financial Action Task Force or FATF, and are the key building blocks for an effective regime to prevent money laundering and terrorism financing. This standard applies to various sectors, including estate agents, lawyers and the financial sector.

Mr Saktiandi Supaat asked how the duties under the Bill compare to those for the financial sector. We have taken a risk-based approach and calibrated the specific requirements for the real estate agency industry vis-a-vis other industries. For example, salespersons are required to conduct customer due diligence checks when facilitating a sale or purchase of a property. For banks, there are instances where additional due diligence checks are required, such as when conducting a wire transfer transaction of more than $1,500, which are not relevant to estate agents and salespersons in this case.

Mr Saktiandi Supaat also asked whether estate agents are capable of assessing the compliance of their salespersons with the duties under the Bill. Let me reiterate and respond to Member Melvin Yong's question earlier on, on whether this Bill puts an additional burden on the industry, this Bill will not introduce new duties for the industry. Estate agents and salespersons are already required to fulfil duties to counter money laundering and terrorism financing. Disciplinary action can be taken for the failure to perform these duties today. The Bill merely inserts express provisions on these duties in the Act, in order to comply with FATF Recommendations.

Hence, the industry is familiar with the duties and has already been performing them. To facilitate compliance, CEA has consulted with the industry to put in place guidelines to provide clarity on the steps and checks required to comply with the duties. This includes checklists to guide salespersons and estate agents on the conduct of customer due diligence checks and to determine if there is suspicion of money laundering or terrorism financing. For example, where there are complex or unusually high-value transactions, salespersons should ask clients about the purpose of the transaction and the clients' source of funds. These are some of the red flags to assess if the transaction was meant to launder monies. Salespersons should also look out for suspicious indicators of money laundering or terrorism financing, such as adverse news concerning the client, paying a substantial downpayment in cash or paying a higher price for a property without viewing.

I would like to assure Mr Melvin Yong that these guidelines are already in place today and the Bill will not result in any material change to the way due diligence checks and submissions of Suspicious Transaction Reports are conducted.

Next, on investigations of estate agents and salespersons, Mr Saktiandi Supaat asked about the role estate agents play in investigating customer complaints and disciplining errant salespersons, as well as the average time taken for the industry to resolve consumer complaints. CEA has a framework to assess and classify complaints and works together with estate agents to address these complaints. Estate agents are required to manage and supervise their salespersons. And where there are non-compliances, they need to take the necessary remedial actions to prevent a repeat of a similar incident.

For service-related complaints, such as being late for appointments or unsatisfactory services, CEA will refer them to the estate agent to resolve the matter. These typically conclude within three months.

Similarly, for complaints involving minor disciplinary breaches, such as advertisements with a missing salesperson's registration number, or making claims on a salesperson's area of expertise in advertisements that cannot be substantiated, CEA will refer the complaint to the estate agent for them to take the appropriate action against the errant salesperson. These typically conclude within three months as well.

For complaints involving more serious disciplinary breaches and criminal offences under the Act, CEA takes between six and 12 months to complete its investigation, depending on the nature and complexity of its cases. Those which proceed to Court or Disciplinary Committee hearings may take several months to complete the proceedings. For disciplinary breaches that are not as serious, the new powers under section 49, as amended by clause 11, allow CEA to censure errant estate agents and salespersons and impose financial penalties of up to $5,000 per matter. So, this will allow CEA to deal with these cases more efficiently, hopefully quicker for all concerned.

Mr Melvin Yong asked about the number of complaints in 2019 and how many agents have been sanctioned by CEA. In my opening speech, I mentioned that CEA received 777 complaints in 2019. In total, six cases were prosecuted in Court, five of which resulted in fines being imposed. Seventeen cases were concluded by the Disciplinary Committee where disciplinary action was taken and CEA issued 206 Letters of Advice to errant estate agents and salespersons.

The Member also suggested to introduce a demerit points system as a simple and effective way to deter first-time minor breaches, so that such breaches would not result in a censure or financial penalty. I thank the Member for his suggestion and would like to assure him that CEA will adopt a calibrated approach in imposing censures and financial penalties under section 49 as amended by clause 11.

CEA will take into consideration the severity of the breach and whether the estate agent or salesperson is a repeat offender. For example, for minor breaches, CEA will generally refer the matter to the estate agent for them to take the appropriate action or CEA may issue a warning letter. If the minor breaches are repeated, then CEA may issue a letter of censure. If the salesperson commits yet another minor breach, CEA may consider imposing financial penalties as a stronger deterrent.

Hence, first-time minor breaches will not result in a censure or financial penalty. In a way, this incremental approach works like a demerit points system and these disciplinary actions will also be published on the CEA Public Register as a strong deterrent to would-be wrongdoers in the industry.

On training, Mr Saktiandi Supaat asked about training efforts to enhance the professional standards of the industry. I agree with the Member that training is crucial to ensure that our salespersons continue to have the necessary knowledge and skills to comply with regulations and safeguard consumer interest. This is why Continuous Professional Development (CPD) training is a key component of CEA's regulatory framework. Each salesperson must complete about six to nine hours of CPD training annually in order to renew his registration.

CEA recently reviewed its CPD framework last year to place emphasis on both Professional and Generic Competencies. The courses on Professional Competencies ensure salespersons are competent and have updated knowledge of relevant laws and regulations, property markets as well as policies.

On the other hand, courses on Generic Competencies cover general skills relevant to the real estate agency industry, such as leadership, digital literacy and communication. These are in line with Singapore's Skills Framework list of generic skills and competencies.

Both Professional and Generic Competencies are important to ensure that our salespersons have the skillsets and critical competencies to carry out their duties effectively. I thank Mr Melvin Yong for his suggestion to list digital skills as professional competencies and agree that the ability to harness technology has enabled the industry to serve their clients better and more productively.

I would like to assure the Member that just because digital skills are listed as Generic Competencies, it does not mean they are less important. Salespersons are required to complete courses from both Professional and Generic Competencies under CEA's CPD framework. We will continue to encourage that industry to upskill themselves with digital skills to enhance their service offerings.

Mr Saktiandi Supaat asked about the SkillsFuture Study Award for the real estate agency industry.

CEA started the SkillsFuture Study Award for the estate agency industry in 2018 to support salespersons in upskilling and acquiring skillsets and competencies. The award was given to its first recipient last year and CEA will continue to offer the award to encourage more salespersons to better serve their clients.

Lastly, Mr Melvin Yong suggested that CEA waive the licence and registration renewal fees for estate agents and salespersons in view of the COVID-19 situation. We have received a few similar requests from the industry recently and, rest assured, we are studying the matter carefully. For many salespersons today, we also have other schemes that are available to them, such as the Self-Employed Income Relief Scheme (SIRS) which NTUC manages, the Temporary Relief Fund (TRF) as well as the Self-Employed Persons (SEPs) Training Support Scheme, which enables our salespersons to also undertake courses and still get allowance while doing so.

But at the same time, I would like to also take the opportunity to commend the efforts of some of our estate agents by implementing their own resilience packages to help their salespersons. Some property agencies have stepped up during this difficult period by extending financial help, by allowing salespersons to apply for early release of commissions; some have subsidised registered salespersons' CPD course fees; some have provided discounts on rentals by salespersons, such as training rooms and offices at the estate agent's premises.

I think all these measures today have helped and I hope that the industry will prosper beyond this COVID-19 circuit breaker period.

Sir, the Bill will align Singapore's levers against money laundering and terrorism financing in the real estate agency industry with international standards. It also strengthens CEA's disciplinary and investigative powers under the Estate Agents Act.

Overall, the amendments will help to deter and punish errant estate agents and salespersons to safeguard the interest of consumers and the professional reputation of the majority in the sector who discharge their duties responsibly and with care. Mr Speaker, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Mr Zaqy Mohamad]

Bill considered in Committee; reported without amendment; read a Third time and passed.