Real Estate Agency Setup: Key Facts and Requirements
According to the Estate Agents Act, all real estate agencies i.e. sole-proprietorships, partnerships, or a private limited company that are involved in carrying out estate agency work in Singapore either for local or foreign properties must be licensed by the Council of Estate Agencies. An individual who works for a real estate agency is required to register himself/herself with the CEA, through the real estate company that (s)he works for.
Licensing criteria for real estate agencies include the following:
The business must be registered with the Singapore Companies Registrar, ACRA either as a Singapore private limited company, partnership or sole-proprietorship.
The estate agency must appoint a Key Executive Officer (KEO) who is not an undischarged bankrupt; not convicted of fraud, dishonesty or breach of fiduciary duties in any country; and who has not served detention or police supervision order either under the Misuse of Drugs Act or Criminal Law Act. In addition, the KEO must:
Have a minimum of 4 GCE ‘O’ Levels passes or equivalent;
Have passed an industry examination i.e. Common Examination for House Agents (CEHA) or Real Estate Agency (REA) exam, or equivalent;
Either be a sole-proprietor, director or partner of the estate agency;
Not be registered with another real estate agency or be an existing licensee of an agency;
Possess at least 3 years of working experience under a Singapore licensed real-estate agency;
Have completed at least 30 property transactions in Singapore in the past 3 years, or who have sufficient experience in managing a business of an estate agent as an executive director or partner, chief executive or sole-proprietor;
Not have previously been a sole-proprietor, KEO, director or partner of an estate agency whose license was revoked.
Neither should the estate agency nor any of its key members or employees hold a money-lender’s license or be part of a licensed money-lender. The estate agency must fulfil the fit and proper criteria i.e. not be bankrupt, nor convicted of fraud, dishonesty, or breach of fiduciary duties. The agency must have a valid Professional Indemnity Insurance policy that covers the business and all the real estate agents that it employs. The agency must have Standard Operating Procedures and guidelines for training and supervision of real estate agents, complaints-handling and dispute resolution, advertising and printing of publicity materials, protection of confidentiality of clients’ information and service standards for its operations. Every real-estate agency must issue estate agents cards to each of their real estate agents in accordance with the guidelines set by the CEA.
Individual real-estate agents who are employed by a real-estate agency must fulfil the following registration criteria:
Must be at least 21 years of age;
Must have a minimum of 4 GCE ‘O’ Levels passes or equivalent;
Should have passed an industry examination i.e. Real Estate Salesperson (RES) exam or equivalent;
Should be registered with only one licensed real-estate agency at any point in time;
Must not be a licensed moneylender or an employee of a licensed moneylender;
Must not be an existing licensee or Key Executive Officer (KEO) of another real estate agency;
Must undertake mandatory continuing professional development of at-least six hours per year;
Must be adequately covered under a Professional Indemnity Insurance valid for at least one year from the commencement date of the registration;
Must not have defaulted on Medisave contributions with the Central Provident Fund Board;
Must fulfil fit and proper criteria such as not be an undischarged bankrupt; not convicted of fraud, dishonesty or breach of fiduciary duties in any country; and should not have served detention or police supervision order either under the Misuse of Drugs Act, Criminal Law Act or Estate Agents Act;
All practising estate agents must wear their agent identification card while doing estate agency work.
Real Estate Agency License: Application Procedure
The real estate agency license application procedure involves submitting the following documents and information to the Council of Estate Agencies (CEA):
A copy of the company’s Business Profile (can be obtained from ACRA for a nominal fee);
A copy of the cover note or policy schedule for the real estate agency’s Professional Indemnity Insurance, pending issuance of the insurance certificate valid for at least 1 year from date of application;
Name of the real estate agency registered with ACRA;
The Registration number of the business;
Personal particulars of Key Executive Officers, directors, sole-proprietors, or partners, as the case may be;
Details of 30 sale/lease transactions concluded in the last three years.
Note that the application must be submitted by the appointed Key Executive Officer (KEO) such as the CEO, COO, or MD.
Once the KEO has submitted the necessary documents and assuming all documents are in order, an email notification will be sent stating that the application is approved. No hardcopy of the license will be issued. A soft-copy can be downloaded and printed by logging into the CEA website. It takes approximately 4-6 weeks to process an application. The annual license fee for real estate agencies varies from S$300-S$3,000 depending upon the number of real estate agents employed.
The application fee for a new license or renewal of an existing license is S$107 and is payable annually irrespective of the fact that the license may be valid for more than one year. The annual registration fee for each real-estate agent employed is S$230 and the application fee to newly register or renew the registration of each real estate agent is around S$54. Note that the annual registration fee and application fee is payable each time the real estate agent switches companies.
On a Final Note
If you follow the real estate agency licensing procedure and comply with the documentation requirements, there is no reason for your application to be rejected. As of March2016, the CEA had licensed 1,372 real estate agencies and had registered 30,423 active real estate agents. Although you can apply for a license on your own, it is advisable to engage a professional services firm to save time and resources.