Some Singaporean real estate agents are breaking Malaysian law by offering their services across the causeway, according to media reports.
It is illegal for them to solicit for customers in the Malaysian market, as real-estate negotiators must be registered with the Board of Valuers, Appraisers and Estate Agents Malaysia. After which, they will be issued an identification tag which must be displayed when conducting business.
Unlawful representation by a broker is punishable by a fine of up to RM300,000 (S$117,000) or a jail term of up to three years, or both.
Malaysian Institute of Estate Agents (MIEA) Johor branch chairman S. Vadeveloo told Malaysian media, “They are flouting our immigration laws because they enter the country as visitors and then work here without a permit. The commission gained from a transaction goes into their pocket and they escape paying tax to the Inland Revenue Board.”
According to Vadeveloo, these agents would focus on Singaporeans and foreigners in the republic who were looking for new or secondary-market properties, and they would then offer their services.
Speaking to PropertyGuru, MIEA President Savi Shanker confirmed there were verbal complaints by MIEA members and practitioners, from Johor Bahru as well as Kuala Lumpur, about Singaporean agents marketing Iskandar property in Malaysia. This has been ongoing on for some time and practitioners are clearly upset with the blatant flouting of the law.
“Some are even bold enough to set up booths to offer their services,” Shanker said.
Hence, MIEA has recently started a campaign encouraging real estate practitioners in Malaysia to lodge police reports if they encounter such illegal practices. “We need our members to be proactive and individually submit police reports and document the process as proof of such offences,” Shanker said.
He has also brought the matter up to the Institute of Estate Agents (IEA) in Singapore. IEA President Jeffhery Foo said, “IEA had previously sent out Letter of Advice to our members not to be selling properties in Malaysia as they are not licensed to do so and is illegal. If they do so, they will be committing an offence.”
However, it would be “an uphill task for IEA Singapore to monitor any such infringement as it’s beyond our jurisdiction if they commit the offence or indulge in illegal activities outside Singapore. We can only advise them against it,” Foo said.
Under the Estate Agents Act, an estate agent must be licensed with the Council for Estate Agencies (CEA) before they can market local or foreign properties in Singapore, and they are allowed to approach foreign developers or partner with foreign estate agents to market foreign property to consumers in Singapore.
Nicholas Kwek, Associate Director at Dennis Wee Realty (DWG) said Singaporeans generally are more comfortable communicating with a Singaporean agent when it comes to buying foreign property.
“Most established developers know this, therefore they choose to engage a Singapore estate agency to assist them in marketing their projects,” he added.
DWG is currently marketing a few projects in Iskandar Malaysia, such as Country Garden Danga Bay, Tropez Residences, Bora Residences and Capitol 21.
Kwek said, “DWG agents will always be thoroughly trained and briefed on every project we embark on, especially overseas ones. We are also frequently updated on rules and regulations.”
As for secondary market properties, Mohamed Ismail Gafoor, CEO of PropNex Realty, said Singaporean salespersons are generally not keen on marketing resale properties in Johor, because the quantum is low, with negligible commission.
“A commission of one percent on a half million ringgit transaction will only translate to about S$2,000 — which a salesperson can earn easily by simply closing a HDB rental transaction, without having to go through the agony of constant causeway jams,” he said.
Ismail added most Singaporean salespersons who are marketing resale properties in Johor are doing so for their Singaporean investors and targeting Singaporean buyers in Singapore.