Property agents run into difficulty over enhanced anti-money laundering rules

Property agents have been given more time to familiarise themselves with new rules to combat money laundering following industry feedback to the Council for Estate Agencies (CEA).

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?”

Mr Mark Yip, chief executive of real estate agency Huttons Asia, said agents have also questioned the practicality surrounding corporate authorisation when closing deals involving a business entity.

Under the new CEA rules, even a chief executive must obtain a formal letter of authorisation from his company to sign a lease or sales contract on his company’s behalf, Mr Yip pointed out.

“We shared these concerns and have already conveyed our feedback to the CEA regarding the practicality of the revised policy. We hope the authority will review and address these issues promptly,” Mr Yip said.

One property agent who spoke on condition of anonymity questioned the practicality of applying these stricter rules to large, well-known listed landlords in Singapore, where much information is already public.

Another said some sources of funds and wealth documents – such as the client’s bank statements, investment portfolio statements and employment payslips – could be considered sensitive, and having to provide such information may deter prospective buyers.

In replies to ST, a CEA spokeswoman said the changes were introduced to further strengthen Singapore’s enforcement regime against money laundering, terrorism financing and proliferation financing, and mirror practices in other regulated sectors, such as those involving lawyers and corporate service providers.

She added that to prepare the industry for the changes, CEA had engaged agencies and agents on the key proposed amendments in 2024.

On the challenges raised by property agents, she said property agencies and agents should explain to the relevant parties that the obtaining of such information is required by law. However, she did not address the specific scenarios cited by agencies and agents, such as performing checks on well-established landlords.

Where a party declines to provide information, agencies and agents should assess “whether there is suspicion of money laundering, proliferation financing or terrorism financing”, and if warranted, file a suspicious transaction report, said the spokeswoman.

CEA guidelines also note that if an agency or agent cannot complete customer due diligence, they must not proceed with the transaction and should terminate any existing business relationship with the client.

From Jan 1, 2026, CEA expects transactions to fully comply with the revised requirements. The extension applies only to new elements, with baseline measures such as customer due diligence remaining in force.

In April 2025, Parliament moved anti-money laundering penalties from a per-case to a per-breach basis to sharpen deterrence, so that multiple contraventions can now attract separate penalties rather than have a single cap.

CEA said it will factor the transition into its regulatory approach, continue engaging the industry to streamline the administrative work and costs relating to compliance, and issue further guidance and resources.

PropNex’s Mr Lim said: “We believe that more structured consultation and phased implementation planning would be critical in facilitating meaningful industrywide adoption. Such engagement can help ensure that the spirit of the regulation is upheld without imposing impractical burdens, especially on smaller players in the ecosystem.”

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

Woman fails to make rich ex-husband pay over $30k monthly in child support S’pore banks developing guidelines to protect seniors from financial abuse by loved ones