Objectives

The purpose of this Code of Conduct and Ethics is as follows:

• To enable accredited estate agencies and any person associated with the accredited estate agencies (AA) to develop a sense of commitment and professional responsibilities when dealing with their clients and the public
• To inform and promote realistic expectations of the estate agency service, and
• To provide norms where unprofessional agency conduct can be assessed.

Scope of Conduct

The areas of control are as follows:

• Professionalism
• Competence
• Fiduciary duties
• Protecting client’s interest
• Professional etiquette
• Advertising and publicity

All accredited estate agencies and any person associated with the accredited estate agencies (AA) are required to comply with the following code of conduct and ethics.

Professionalism

There is a need for AAs to maintain a certain level of professional standard in their conduct. They should therefore not engage in undesirable activities and to take responsibilities to ensure compliance with the code and uphold proper conduct.

1) Rendering service with integrity and fairness

To render service to their client with absolute fidelity and to practise their profession with integrity, honour and courtesy, and in a spirit of fairness and goodwill to their fellow AAs.

Scenario: In view of the current weakening market condition, being an experienced real estate agent, Grace had sincerely shared the truth of the current state of the market and discourage her clients for going for a ‘fire sale’ since the clients do have the holding power to consider the sale at a later date when the market is more positive.

2) Avoiding unethical practice

To protect the public against fraud, misrepresentation and unethical practices in real estate transactions and the rendering of real estate agency services. AAs should endeavour to eliminate, from their area of practice, any practices which could be damaging to the public or bring discredit to the real estate profession.

Scenario: To increase the volume of businesses secured, James who had been an agent for 12 years, had been involved and encourage his agents and salepersons to promote the idea of ‘Cash Back’ to prospective clients although it is an offence to do so.

3) Maintaining high standards

To maintain the high standards of the real estate agency profession, and not to engage in any act or omission which may bring discredit to the profession.

Scenario: Knowing that a waste recycle plant would be erected at the open field in front of a property that Kate is selling for her clients, It will be a breach if she tries to avoid telling prospects what the said land would be used for the aforesaid purpose.

4) Not associating with disreputed enterprise or activity

To guard against the use of the AA’s name by, or personal association with, any enterprise or activity of a questionable character which may bring the AAs or the profession into disrepute.

Scenario: Ah Long of ABC Loan Shark had gone around a particular neighbourhood giving unsecured loan to home owners in need of monies and if failed to repay, the debtors would have to use Roger’s real estate agency services to dispose off the debtors properties in settlement of the debts.

Competence

AAs should be sufficiently trained and knowledgeable in their area of practice. They should engage in continuing professional development (CPD) and keep up-to-date with developments and changes in law and policies.

5) Provision of competent service

To provide an acceptable level of competent service as expected in keeping with and in line with the basic standards of quality agency practice.

Scenario: Edward who is a specialist in marketing and leasing of retail space had highlighted as a competent practitioner of the restriction of a particular unit that the clients is interested in turning that space into a food outlet, there is site constraint for the required provision of a grease trap. This is line with the compliance of these rule.

6) Not to be involved in providing services not sufficiently competent to do so

Not to undertake to provide specialised professional services concerning a type of property or service that is outside their field of competency, unless this fact is fully disclosed to the clients concerned.

Scenario: Alex, being a well trained and qualified real estate agent with 10 years of experience would be in breach of these rule if he accepted an appointment by the clients to carry out investment feasibility study of a specialized investment property which only qualified licensed valuer could undertake unless he had clearly explained that such work scope would be outsourced to the right competent professional.

7) Keeping updated with developments

To keep themselves informed and updated on matters and issues affecting real estate in the areas of practice, legislations and governmental regulations, public policies and market conditions in order for them to stay current and to be in a position to advise their clients properly.

Scenario: It would be a breach of these rule if an agent failed to keep himself updated that a particular development would be drastically affected by a road widening programme by the Relevant authorities and hence failed to advise his clients correctly.

Fiduciary Duties

AAs should act in utmost good faith with the interests of the principal in mind. They should not engage in activities which will undermine the principal or be in conflict with that of the principal.

8) Acting in fiduciary manner

To act for their client in all professional real estate matters in a fiduciary manner and shall hold and observe the requirements of keeping confidential of the results and other findings of their work and any report, until the transaction or proceedings for which the work or report being executed have lapsed or have been completed.

Scenario: The agent stands in a fiduciary relationship with his principal, to whom he must disclose all that he knows which may affect his principal’s interests. In a situation whereby the intended transaction would be complicated as the Vendor had accepted the option money though Option To Purchase (OTP) had not been signed and yet still offer the option to a third party prospect.

9) Disclosing personal interests

To inform their client of the nature of any business connections, interests or other affiliations the AAs concerned may have in connection with the service to the client, and not to undertake to provide professional services concerning a property where they have a personal or contemplated interest, unless such interest is specifically disclosed to their clients.

Scenario: Ronald who owns a 2% stake of a commercial fund has to bring to the attention of the clients who had engaged him to sell a 4 storey commercial building at Amoy Street and the prospective purchasers were the fund that he had a stake in, to avoid breach of these rule.

10) Accepting secret commission

Not to accept from a third party any commission, rebate or profit without the client’s knowledge and consent.

Scenario: It will be considered a breach if an agent who is engaged to exclusively market a property and secretly without notifying the Vendor accepts an offer by the prospective purchasers to give him $10,000 as additional commission should he manage to seal the deal at $50,000 below market valuation.

Protecting client’s interest

AAs should not conceal or exaggerate material facts about the property. They should also not mislead their clients and should protect their clients’ interests.

11) Not making misleading statements

Not to knowingly prepare or certify any statement which is false, incorrect or misleading or open to misconception by reason of the mis-statement, omission or suppression of a material fact or otherwise.

Scenario: In the sale fact sheet of a condominium unit, an agent knowingly includes the common areas immediate to the unit as the additional areas of the said unit although it is not within the boundary of the strata unit. Such provision of misleading information is a breach.

12) Not making misleading advertisements

Not to make advertisement which contain any of the following:

• an inaccurate or misleading statement of fact;
• an explicit solicitation of instructions;
• an explicit comparison between the service offered by their firm or company with that of other firms or companies; or
• a claim by the AAs to be specialising in or to be a specialist or an expert in any particular aspect of their real estate work unless they have the necessary specialist skills.

 

Scenario: An example is where a real estate agency services company in their corporate advertisement openly declared that they are the largest real estate agency in Singapore where the actual truth is otherwise and they are including in-house Feng Shui services as an add on value whereas they do not have such trained or known expertise within the company.

13) Putting agreement in writing

For the protection of all parties, to ensure that the financial obligations and commitments regarding real estate transaction are in writing expressing the exact agreement of the parties and a copy of such an agreement shall be furnished to each party upon signing such an agreement.

Scenario: All contractual relationship should be documented in writing and explained in language that the clients could understand and clients should be given such endorsed copy so that they could recall and appreciate the contents of the agreement that they have committed or signed.

14) Not acting for two parties on same transaction without consent

Not to act for one party to a transaction while another AA from the same firm or related, associated or affiliated firm is acting for the other party to the same transaction, except with the knowledge and consent of the parties concerned.

Scenario: Karen and Joe are colleagues in AB Agency Pte Ltd and Karen had the exclusive right of sale for 10 Duchess Close and Joe is representing a potential purchaser. Before they could continue with further negotiation and activities, they both should advise their clients respectively and seek their consent, failing which it will be considered a breach of this rule.

Professional etiquette

AAs should not engage in unfair competition with fellow AAs. They are not to solicit instructions or offer inducements to secure services, or making negative remarks about fellow AAs.

15) Avoiding conflict with fellow AAs

Not to seek unfair advantage over fellow AAs, and should conduct their business so as to avoid controversies with fellow AAs.

Scenario: Knowing that Janet did not sign exclusive letter with her long term clients, Wilfred tried to discredit her and hopefully secure an exclusive appointment with the said clients. This will be a clear breach.

16) Not engaging in inconsistent practice

Not to engage in any practice or take any action inconsistent with the estate agency work.

Scenario: An agent shall not hold himself out as the “Sole Agent” for the sale or leasing of a property unless he holds a written authority as sole agent from the Vendor of the said property.

17) Not poaching employees of fellow AAs

Not to, directly or indirectly, solicit the services of an employee in the organisation of another AA without the prior notice to the said AA.

Scenario: Knowing that Agnes is a star performer of ABC Agency Pte Ltd, it will be in breach of this rule if XYZ Real Estate Pte Ltd proceeds to convince and solicit Agnes to leave her current AA and join the new company.

18) Not criticizing fellow AA in the public

Not to offer, express or communicate to the public any criticism or comment on the professional services, or conduct of, or professional fees charged by a fellow AA.

Scenario: It will be a breach of this rule if an agent had openly criticised and discredit another agent who is competing for an exclusive right to market a client’s property.

19) Acting in professional manner

To observe principles of professional etiquette when dealing with fellow AAs and clients.

Scenario: Although you are aware of your clients’ exclusive instruction to another AA for the sale of her shop unit and was consulted for advice, professionally, you should still share with the clients on areas of concern and ways to generate best return from the sale and never give negative remarks on the fellow AA that she had engaged.

Advertising and publicity

AAs should not engage in improper advertisements and publicity. They should not be misleading and/or providing inaccurate facts in their marketing efforts, and should be well-informed of the Consumer Protection (Fair Trading) Act.

20) Not making improper advertisements

Not to make advertisement in respect of wording, content, layout and arrangement which will bring the profession into disrepute or to undermine public confidence in the services provided by AA.

Scenario: A case where an agent/saleperson tried to develop more business within a residential development by highlighting in his business flyer that the development concerned had potential for en bloc sale because of possible revision of plot ratio in the subsequent Master Plan review which is not a factual situation.

21) Advertising in commercial concern

Not to allow any reference to them or their firm or company to appear in any advertisement published by a commercial concern unless they have been associated with the provision of services.

Scenario: UVW Services Pte Ltd being a pure real estate agency services company allowed or publicised in a commercial concern that they are also competent in providing professional valuation indication or services although they do not have such capability.

22) Ensuring proper content of publicity materials

Not to allow any reference to themselves, or other materials describing their firm and the service it offers which contain information that are inaccurate and misleading.

Scenario: UWV Services Pte Ltd is a real estate agency services company and the Licensor is a individual member of an International Real Estate Organisation FIABCI and hence it will be in breach of these rule if in the firm’s publicity material mentioned that the firm concerned is a member of FIABCI.