Establishing your real estate agency business in Singapore
The continuous economic prosperity of Singapore has attracted international businesses and workers to settle in Singapore. With the influx of foreigners into the country, the real estate business boom is inevitable. Real estate properties have become prime commodities as more people grab every opportunity to own a piece of real estate as an investment.
More than ever, engaging in a real estate agency has become even more enticing. As such, we are providing you a general guideline in the intricacies of setting up an agency that caters to Singapore real estate.
Who must get the license?
Section 3 of the Estate Agents Act defines that whoever is doing estate agency work will need to procure the license for a real estate agency business. Estate agency work means any work that involves introducing a client for the purpose of acquisition or disposal of asset either by sale or by lease or tenancy arrangements.
Section 4 also mentions circumstances in which a person may be exempted from holding the estate agency license.
Basic requirements
Business registration
Registration with Singapore Companies Registrar as sole proprietorship, private limited company, or partnership
License
Real estate agencies need to secure a permit from Council of Estate Agencies (CEA) to operate as such. This is a requirement outlined in the Estate Agents Act and is applicable to agencies, whether they are private limited companies, partnerships, or sole proprietorships.
Individuals working under real estate agencies must also be registered with the CEA. Said registration must be facilitated by their respective agencies.
Appointment of Key Executive Officer
You must appoint a Key Executive Officer who will be responsible for meeting all the licensing conditions.
Such Key Executive officer must satisfy all following conditions;
- KEO has no record of bankruptcy;
- No conviction record for dishonesty, fraud, or cases of trust infringement in any country;
- Never been under police supervision or detention for violations of Criminal Law Act or Misuse of Drugs Act;
- Have passed relevant examinations such as Real Estate Agency Exam, Common Examination for House Agents, and others;
- Must be a partner, director, or sole proprietor of the real estate agency;
- Must not be associated with or licensee of other real estate agencies;
- Must have a minimum of three years real estate agency working experience;
- Must have at a minimum of 30 real estate transactions over a period of three years;
- Has never been a partner, director, sole proprietor, or KEO of a real estate agency that had its license revoked.
Professional Indemnity Insurance Policy
Must possess a legitimate Professional Indemnity Insurance Policy covering the real estate business and all agents under its employ. The coverage of policy is determined as per the volume of expected transactions by the agency.
Operating procedures
Every real estate agency operating in Singapore must have;
- Standard operating procedures
- Real estate agent training and supervision guidelines
- Dispute resolution and complaint handling procedures
- Standards for printing and advertising materials
- Guidelines for client information confidentiality protection
- Operational service standards guidelines
- Estate agent cards for each agent as outlined in the CEA
Requirements for person working under company as real estate agents
Real estate agents working under a real estate agency must meet the following criteria for registration:
- Must past relevant exams such as Real Estate Salesperson Exam;
Must be working with only one real estate agency and not have a license or act as KEO of other real estate agencies; - Must not have money lender’s license or work for a money-lending business;
- Must complete the mandatory yearly minimum of 6 hours professional development;
- Must not have any Medisave contribution default payment record in Central Provident Fund Board;
- No records of conviction for cases like fraud, dishonesty, breach of trust agreement, or other crimes listed under the Estate Agents Act, Criminal Law Act, or Misuse of Drugs Act.
- Must display agent identification when performing estate agency tasks.
Application steps for Real Estate Agency license
Submit following documents for application
- Business profile copy secured from ACRA;
- Copy of Professional Indemnity Insurance policy schedule or cover note which is at least valid for one year upon application;
- Personal details of partners, sole proprietor, directors, or Key Executive Officer; whichever is applicable;
- Details of at least 30 transactions of sale or lease completed in the past three years by the KEO