https://www.straitstimes.com/singap...t-enhanced-anti-money-laundering-requirements
Property agents run into difficulty over enhanced anti-money laundering rules
Agents and property agencies were supposed to perform stricter due diligence checks from July 1, when changes kicked in for the Estate Agents Act and its subsidiary legislation, the Estate Agents (Prevention of Money Laundering, Proliferation Financing and Terrorism Financing) Regulations.
The deadline has been extended to Dec 31 following industry feedback, CEA said in response to queries from The Straits Times.
Before the revised regulations, property agents and agencies were required only to conduct due diligence measures on their own clients.
The enhanced framework expands checks beyond an agent’s own client to include unrepresented parties in a deal, such as a direct buyer when the agent represents the seller. The CEA said the changes align with international standards set by the Financial Action Task Force.
Property agents must also
verify the source of funds used to buy or rent a private property, identify ultimate beneficial owners when entities are involved, and keep fuller records.
The changes also require agents to guard against proliferation financing – the provision of funds for the illicit development and supply of weapons of mass destruction and related materials.
Property agencies said they support the policy intent, but agents had reported challenges in applying the new procedures in everyday deals.
The most cited pain point was collecting sensitive information such as source of funds, particularly from people they do not represent.
Mr Eddie Lim, chief agency officer of real estate company PropNex Realty, described it as a “compliance gap”, as the new rules legally oblige agents to obtain documents from parties who are “neither contractually nor relationally bound to respond”.
For example, those who are not the clients of PropNex agents may “see little reason to cooperate”, he said. Clients are also not mandated by any governing body to comply with an agent’s checks.
“Similarly, processes like enhanced checks on well-established landlords or verifying source of funds have been raised as sensitive or difficult to execute in the field,” said Mr Lim.
He added that moving from the initial announcement to the implementation of these measures, it felt “relatively sudden” and did not give agencies sufficient lead time to adjust internal processes or train their people.
PropNex, Singapore’s largest real estate agency with more than 13,700 agents, said smaller outfits could feel the strain most. As at Jan 1, 2025, there were 36,058 registered property agents in Singapore.
Mr Eugene Lim, key executive officer of real estate agency ERA Singapore, said
additional checks could slow down transactions or cause them to fall through.
PropNex agent Richard Tan said that as a shophouse specialist handling high-value deals, he found it challenging to obtain information on third parties such as buyers or tenants when he is representing the seller.
“The new rule states that even if I represent the seller, I am required to collect details about the buyer. But the buyer’s agent may be reluctant to disclose this because client details are valuable,” said Mr Tan.
He added: “We also have to ask customers to fill out a customer particulars form before a viewing. That would be impractical, as who will give out sensitive details and sign a form even before viewing the property?”
