The Council for Estate Agencies (CEA) – Illegal Cash Back Scheme

The Council for Estate Agencies (CEA) was formed as a statutory board under the Ministry of National
Development. Established under the Estate Agents Act. CEA is empowered to administer the regulatory
framework for the real estate agency industry to uphold professional conduct and practice in real estate
industry.

Estate Agents Act (Cap. 95A) - Code of Ethics and Professional Client Care/The Code of Practice for Estate
Agents.

Point 1.10 Offering gifts and cash vouchers

1.10.1 Estate agents and salespersons shall not advertise or offer any benefit, in cash or kind, to any party
in a transaction, so as to induce them to engage the services of the estate agents or salespersons. Estate
agents and salespersons also shall not agree if any person initiates the request for them to offer such
benefits. This practice of offering benefits as inducement is an unprofessional and unethical practice and
brings disrepute and discredit to the industry.

Circular PC 04-18 (12Jul2018)

Practice Circular on the Offering of Benefits by Estate Agents and Salespersons via Third Party Entities:

In addition to clause 1.10 from the Professional Service Manual, “Salespersons and estate agents who
work with and/or use third parties to offer benefits, including any “cash back programme”, which results
in the consumer engaging the services of the salespersons or estate agent will be in breach of this Practice
Circular.

“Estate agents and salespersons are not to participate in any schemes where direct or indirect benefits
are given to a consumer in a new development sale transaction that ultimately results in the consumer
engaging the services of the estate agent or salesperson. This includes “cash back” schemes from third
parties that offer benefits to consumers in new development sale transactions.”

CAS specifically identified “cash back programmes” to be illegal to entice buyers or encourage
transactions.

Buyers and third party would also infringe MAS’s “Notice 1106 Residential Property Loans”. If they are
taking a loan with a financial institution and fail to declare the “cash back”, this may result in the bank
granting a loan higher than the loan at the valuation of the unit that the buyer bought.

Under 6. Declaration part (b) “A merchant bank granting a credit facility for the purchase of Residential
Property shall obtain a written declaration from the Borrower on…whether any discount, rebate or any
other benefit (including the payment of legal or stamp fees for the purchase) which has the effect of
reducing the true purchase price has been or will be received from the vendor or any other party, and the
amount of such discount, rebate or benefit;”

Source: The Council for Estate Agencies (CEA)