New CEA rules – Can property agents still cheat?

April 2011

With the recent set up of Council of Estate Agencies, Estate agents (Licensing and Registration) Regulations 2010 and the Estate Agents (Fees) Regulations 2010 will take effect on 1 November 2010. (http://www.cea.gov.sg/cea/content/index.html) it may be easier to complain against any errant singapore property agents. In the current regulation, agents can no longer represent buyer and seller in a single deal, but we believe that this does not go far enough.

CEA also mandates that property agents cannot refer home owners to money lenders. However this does not go far enough as agents are still referring home loans to buyers and doing a lot of illegal legal fee kick-back.

In case your agent have referred you a lawyer or a bank, and in the situation where you feel you have been cheated, you could note down the sequence of events and check with us first or raise it with the CEA

Many agents make referral to a bank or a mortgage consultant with the lawyer of the agent’s choice. This lawyer then over-charges the person for legal conveyancing fees so as to pay a commission to the property agent. In other words, the agents receive a kick-back. However, as legal kick-backs is illegal under Singapore law, what these property agents have done is, they have committed a crime and is liable to being punished. Similarly many property agents receive a legal kick-back from intermediary companies which we cannot name, with the property buyer ending up with expensive legal conveyancing fees. These intermediary companies are not apparent to the person taking a home loan as it is done at the back end, but these companies will pay the illegal legal fee kick back to the property agent.

Property agents also push you towards unattractive home loan rates just so as to benefit from the legal fees kick back.

Always note the time and date of your communication with the property agent. Do not drop your guard. Make sure to always force a reply or confirmation via email, this way the agent cannot run.

Attached here is a property agent complaint form which we downloaded from the CEA website. (Please note, you should always check the CEA website to ensure that the form is up to date, we only provide a convenience and are not liable to any losses whatsoever from using the form)A property agent complaint form is available at property buyer. You can contact them at loans (at) propertybuyer.com.sg

CEA Property Agent Complaint Form is available upon request.

Reasonable Legal Conveyancing Fee Guide – Apr 2011

For HDB buyers – Buying a HDB in the resale market

The reasonable price ranges from $1400 to $1800 for legal conveyancing excluding the mortgage stamp fee (by Inland revenue – IRAS) which is about $500.

Total (inclusive of Mortgage stamp fee) is $1900 to a max of $2300.

Conveyancing rates for HDB home loan refinance

Total (Inclusive of Mortgage stamp fee) is $1900 to $2300.

For Private Property Loan- Buying a New Condo under construction

Legal fees for buying BUC properties is $2500 to $3000, although some goes up to $3500 if the property is years away from Temporary Occupation Permit (TOP).

The higher fees is due to the fact that many buildings which are going to get the Temporary Occupation Permit (TOP) may be getting it late, therefore there is more administrative cost on the part of legal conveyancing as they will need to keep track for a longer period of time.

For Private Property Loan- Buying a New completed Condo

The total legal conveyancing cost ranges from $2500 to $3210, with $2800 to $3000 being the norm.

The price varies a bit, depending on the law firm and the banks. Some banks are deemed more troublesome at the back end, therefore some law firms charge more. But there is a limit to it, so the above prices can be used as a guide.

Conveyance fees for Private Residential Refinance

The legal conveyance fees (including mortgage stamp fee) ranges from $2500 to $2800.

When do Singapore law firms charge higher rates?

Basically it is up to the law firms when to charge you higher. Perhaps sometimes, we feel it depends on their mood, other times, it depends on whether they are in cahoots with the Dishonest property agents.

Law firms may charge you more under some of the following conditions: -

• Last minute appointments such as 1 day before the exercising of option date, law firms may charge more.
• Exercise dates falling into public holidays (maybe)
• Faster completion dates such as 6 to 8 weeks.
• Liaising with CPF on expediting payment.
• Multiple parties involved in the property.
• Involving bridging loans or construction loan.
• In illegal partnership with property agents.
• Not corrupt, but legal conveyancing is not their core business and hence they charge a higher price.
• Some property, usually those above 3m may face higher legal conveyancing fees, due to more potential complexity. (But not always the case)
• Involving probate cases.

<h2>How do you know if you are over-charged?</h2>

If you have discovered that you get charged a higher fee than what we have described, it is possible that you have been cheated by the property agents, if you have not been cheated by the agents (in that they did not receive a commission), it is possible that you have over-paid.

Although the law society fee recommendation stipulates a higher fee, the free market has stabilized on the above fees which we have highlighted and hardly anyone uses the recommended fee.

In case you have paid higher than the highest range there, you can take down your property agent’s license number and raise a complaint in case the bank and/or the law firm was referred to you by the property agent.

These guideline fees are what we understand to be correct market rates as at April 2011

In case you do not know if you are cheated, you can tell us your story, we will be able to guesstimate whether you have been cheated.

write to loans at propertybuyer.com.sg perhaps we can go through your case to let us know if you have been cheated.

SMS Property Buyer mortgage consultants at: +65 9782 8606

Related posts:

1. Secret tricks dishonest property agents play on option to purchase in Singapore
2. Singapore property agents speculate at genuine buyer’s expense
3. Dishonest Singapore property agents cheats Novice property investors on home loan valuations