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Rea Estate Business Plans


Rea Estate Business Plans document sample

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The REA Qualifying Examination Syllabus consists of three papers:

Paper 1        : Legal Framework of Real Estate (7 competency units)

Paper 2        : Real Estate Assets and Market (5 competency units)

Paper 3        : Real Estate Agency Practice and Regulations (4 competency units)



Under the new regulatory regime administered by the Council for Estate Agencies, the
estate agency must appoint a key executive officer (KEO) who is responsible for the
overall management of the business and supervision of all its salespersons. As
stipulated under the Estate Agents Act 2010, the KEO has to satisfy enhanced licensing
conditions including passing the CEA’s Real Estate Agency (REA) examination or have
equivalent qualification. The KEO must also demonstrate to the Council for Estate
Agencies (CEA) that he has put in place the proper policies and procedures for the
management of the business. These are stipulated in the Code of Practice under the
Estate Agents (Estate Agency Work) Regulations 2010. All practising company directors
and partners are also required to pass the CEA’s Real Estate Agency (REA)

The REA syllabus is prepared in the context of laws in Singapore governing real estate
agency and related work and shall focus on sale and lease transactions involving
private residential, HDB, commercial and industrial properties located in Singapore. The
syllabus does not include laws or regulations of other countries governing transactions
of foreign properties and real estate agencies are advised to be familiar of such laws or
regulations when advising their clients in foreign properties transactions.


Candidates are expected to:

   •   have good knowledge of real estate agency business and the real estate agent

                                                                              Page 1 of 16

   •   have sufficient knowledge of laws governing estate agency work and how they
       relate to practice
   •   be conversant with prescribed regulations and practices governing private
       residential, HDB, commercial and industrial property sales and tenancy
   •   be conversant with good business development and office management
   •   understand and apply CEA’s Estate Agents Act and regulations, Code of Ethics
       and Professional Client Care, and Code of Practice with respect to real estate
       agency business and work

The syllabus is prepared to facilitate the development of appropriate curriculum by the
approved course providers.

                                                                              Page 2 of 16

                     Paper 1: Legal Framework of Real Estate

Competency Unit 1: Land Law and Registration

1.1   Land law in Singapore
      1.1.1      Legal framework for property transactions
      1.1.2      Judicial system in Singapore
      1.1.3      English legal system
      1.1.4      Applicable laws in real estate transactions

1.2   Property rights: Basic concepts
      1.2.1      Legal definitions of land and real property
      1.2.2      Fixtures and fittings
      1.2.3      Interests in land
      1.2.4      Freehold and leasehold estates
      1.2.5      Succession
      1.2.6      Gifts of property
      1.2.7      Licenses
      1.2.8      Trusts
      1.2.9      Limitations of actions
      1.2.10     Easements and profits
      1.2.11     Co-ownership of land
      1.2.12     Covenants and mortgages

1.3   Land registration systems
      1.3.1      Proof of title
      1.3.2      Registration systems
      1.3.3      Titles and deeds
      1.3.4      The Torrens system
      1.3.5      Strata title

1.4   Legal description of land
      1.4.1     District and lot number
      1.4.2     Old and new system of lot numbering
      1.4.3     Amending boundaries of districts
      1.4.4     Naming of buildings

1.5   Reading and interpreting plans
      1.5.1     Litho sheets
      1.5.2     General improvement plans (GIP)
      1.5.3     Certified plans
      1.5.4     Strata title plans

                                                               Page 3 of 16

Competency Unit 2: Law of Contract and Tort

2.1    Elements of a contract
       2.1.1     Intention to create legal relations
       2.1.2     Offer and acceptance
       2.1.3     Consideration
       2.1.4     Documentation
       2.1.5     Legality of contract

2.2    Agreements “subject to contract”: pending sale and purchase agreement

2.3    Terms of a contract
       2.3.1     Conditions and warranties
       2.3.2     Expressed and implied terms
       2.3.3     Breach of an express condition
       2.3.4     Terms and representation

2.4    Vitiating factors in a contract
       2.4.1       Mistake
       2.4.2       Misrepresentation
       2.4.3       Undue influence
       2.4.4       Duress

2.5    Discharge of contract
       2.5.1     Performance
       2.5.2     Agreement
       2.5.3     Frustration
       2.5.4     Breach

2.6    Remedies for breach of contract
       2.6.1    Specific performance
       2.6.2    Damages and/or rescission
       2.6.3    Injunction

2.7    Contracts (Rights of Third Parties) Act 2001

2.8    Singapore Law Society's Conditions of Sale 1999

2.9    Negligence
       2.9.1     Estate agents and duty of care
       2.9.2     Remoteness of damage

2.10   Employers’ vicarious liability
       2.10.1    Doctrine of vicarious liability
       2.10.2    Employer-employee relationship

                                                                          Page 4 of 16

       2.10.3     Commission of tort by employee
       2.10.4     Course of employment

2.11   Defenses to negligence
       2.11.1    Contributory negligence
       2.11.2    Volenti non fit injuria

2.12   Trespass
       2.12.1   Forms of trespass: trespass to person, trespass to goods, trespass to
       2.12.2   Defenses to trespass
       2.12.3   Remedies for trespass

2.13   Dangerous premises
       2.13.1   Occupiers’ liability for defective premises
       2.13.2   Visitors and trespassers
       2.13.3   Common duty of care
       2.13.4   Landlord’s duty of care

Competency Unit 3 : Estate Agency Practice

3.1    Setting up an agency

3.2    Securing listings
       3.2.1      Sources of listings
       3.2.2      Press advertisements
       3.2.3      Developers’ projects
       3.2.4      Magazines
       3.2.5      Referrals
       3.2.6      Buyers’ preference
       3.2.7      Cold calling and mailing

3.3    Sole and multiple agency arrangements
       3.3.1     Appointment of an estate agent
       3.3.2     Types of agency arrangements
       3.3.3     Sole and multiple agency
       3.3.4     Multiple listing system

3.4    Remuneration of an estate agent

3.5    The agent/owners relationship
       3.5.1     Creating the agency relationship
       3.5.2     Agency by agreement

                                                                           Page 5 of 16

       3.5.3      Agency by estoppels
       3.5.4      Agency by ratification

3.6    Authority of an estate agent: actual and implied authority

3.7    Rights of an estate agent
       3.7.1      Implied rights
       3.7.2      Right to remuneration
       3.7.3      Right to reimbursement
       3.7.4      Indemnity

3.8    Termination of an agency agreement

3.9    Bankruptcy Act

3.10   Oaths and Declaration Act

3.11   Civil Laws and Syariah Laws on inheritance and divorce

3.12   Land Acquisition Act

3.13   State Lands Act (conditions and covenants)

                                                                    Page 6 of 16

Competency Unit 4: Law Relating to Lease Transactions

4.1   The leasing process
      4.1.1     Features of a valid lease
      4.1.2     Distinction between a lease and a licence
      4.1.3     Creation of a Lease
      4.1.4     Relationship between landlord and tenant
      4.1.5     Commencement of lease

4.2   Types of leases
      4.2.1      Fixed term leases and periodic tenancies
      4.2.2      Equitable leases
      4.2.3      Agreement for lease
      4.2.4      Tenancy at will and sufferance
      4.2.5      Service tenancy, yearly tenancy, statutory tenancy and joint tenancy

4.3   Standard terms of a lease
      4.3.1     Premises, the “habendum” and “reddendum”,
      4.3.2     Rights and obligations of landlord and tenant
      4.3.3     Landlord’s and tenant’s covenants
      4.3.4     Option to renew
      4.3.5     Termination
      4.3.6     Assignment of lease

4.4   Renting to illegal immigrants – Section 57 of the Immigration Act

4.5   Registration of foreign workers addresses with MOM – OFWAS

4.6   Requirements of workers dormitories (Regulations under MOM and NEA and
      URA’s Planning Act)

                                                                            Page 7 of 16

Competency Unit 5: Law Relating to Property Taxations

5.1   Property Tax
      5.1.1     Annual value system
      5.1.2     Liabilities and relief
      5.1.3     Tax rate and rebate
      5.1.4     Owner’s right and obligation
      5.1.5     Owner-occupied tax concession
      5.1.6     Vacancy refund of property tax

5.2   Understanding and computation of stamp duty – sales, lease, rate

5.3   Goods and Services Tax – exempt Supply, zero rated

5.4   Income Tax Act - withholding tax (for payment to non-residents or non-resident

Competency Unit 6: Law Relating to Planning & Conservation

6.1   URA Act

6.2   Planning Act

6.3   Master Plan 2008
      6.3.1     Special control plans
      6.3.2     Detailed control plans

6.4   Development control parameters for residential and non-residential

6.5   Conservation guidelines – principles and approaches

6.6   Development charge and differential premium
      6.6.1    Temporary development levy
      6.6.2    Development baseline definition
      6.6.3    Computation of development charge
      6.6.4    Exemption
      6.6.5    Calculation of differential premium

6.7   Change of use guidelines – use classes

                                                                            Page 8 of 16

Competency Unit 7: Companies Law

7.1   Registering a sole proprietorship or partnership

7.2   Limited liability partnership and Limited company

7.3   Comparison of company structure and understanding of “veil of incorporation”

7.4   Legal Requirements
      7.4.1     Business Registration Act
      7.4.2     Companies Act
      7.4.3     Limited Liability Partnership Act

                                                                           Page 9 of 16

                      Paper 2: Real Estate Assets and Market

Competency Unit 8: Real Estate Market

8.1   Physical and economic characteristics of land

8.2   Characteristic of real estate markets: differences with other commodity markets

8.3   Supply and demand factors

8.4   Valuation concepts, principles and methods of valuation including direct
      comparable, investment approach, residual method, replacement cost and
      discounted cash flow methods.

8.5   Real estate property cycles

8.6   Factors affecting property market operations

8.7   Government intervention and effect on market

8.8   Regional and global real estate markets

Competency Unit 9: Real Estate and Other Forms of Investment

9.1    Real estate and other forms of investment

9.2    Definition of investments

9.3    Qualities and forms of investment

9.4    Risk and returns

9.5    Advantages and disadvantages of real estate Investment in comparison with
       other forms of investment

9.6    Other forms of investment e.g. property funds, REITS

                                                                           Page 10 of 16

Competency Unit 10: HDB Properties

10.1    Housing and Development Act

10.2    Type of housing subsidies – implicit subsidies (new flats) and explicit subsidies
        (CPF housing grant and Additional CPF housing grant)

10.3    HDB concessionary housing loan – first concessionary housing loan and
        second concessionary housing loan

10.4    Eligibility conditions for housing subsidy and loan subsidy

10.5    Public Housing policies – new flats, DBSS flats, studios apartments and
        executive condominiums; treatments of second timers (e.g. pay resale levy for
        new HDB flat)

10.6    Resale market – resale flats, executive condominiums (between 5 to 10 years
        from TOP), HUDC flats (mandate for privatization not obtained) and HUDC flats
        (mandate for privatization obtained)

10.7    Sales documentation (use of CEA’s Standard Estate Agency Agreement)

10.8    Terms and conditions for sales of HDB Flat

10.9    Eligibility conditions to rent subsidized flat from HDB

10.10   HDB residential premises – others uses e.g. home office

10.11   HDB property ownership -checks on sellers and owners

10.12   Guidelines on subletting and lease buyback scheme

10.13   Town Council Act

10.14   Money Lenders Act – disallowing lodging of caveats on HDB flats

10.15   Policies on HDB commercial and industrial properties

        10.15.1      Allocation and transfer of tenancies
        10.15.2      Compliance with regulations under NEA and AVA
        10.15.3      Business B1 and B2 zonings
        10.15.4      Types of e-business
        10.15.5      Change of use guidelines
        10.15.6      Sale of shops programme
        10.15.7      Industrial redevelopment programme

                                                                              Page 11 of 16

Competency Unit 11: Private Residential and Commercial/ Industrial Properties

11.1    Residential Property Act

11.2    Sale of Commercial Properties Act and Rules

11.3    Types of private residential properties eg. landed, apartments, condominiums,

11.4    Types of private commercial and industrial properties including strata titled
        factories, shops and offices

11.5    Collective Sale – Land Titles Strata Act Part VA on stamping of agreement
        under collective sale, Land Titles (Strata) Act (Amendment of Fourth Schedule)
        Order 2004 on new pre-conditions for applications to the Strata Titles Boards.

11.6    Housing Developers (Control & Licensing) Act and Rules - role and obligation
        of developer

11.7    Definition of commercial / industrial properties under construction

11.8    Sales process of property under construction including protection afforded to

11.9    Differences in marketing completed and under construction properties

11.10   Differences in marketing residential properties under construction and
        commercial/ industrial properties under construction

11.11   Legal requirements for developing commercial/ industrial properties under

                                                                              Page 12 of 16

Competency Unit 12: JTC and Other Properties

12.1   Jurong Town Corporation Act

12.2   JTC’s products
       12.2.1     Business and specialised parks
       12.2.2     Factories and industrial land

12.3   Terms and conditions of leasing and letting including assignment of JTC
       factories and industrial land

12.4   Hotels and office premises including tuition centres

12.5   Recreational facilities

12.6   Places of worship or religious sites

                                                                          Page 13 of 16

                 Paper 3: Real Estate Agency Practice and Regulations

Competency Unit 13: Estate Agents Act 2010 and Estate Agency Practice

13.1   Principal functions and general powers of CEA

13.2   Estate Agents Act

       13.2.1       Coverage of regulatory framework
       13.2.2       Definition of estate agent, salesperson and estate agency work
       13.2.3       Duties of and liabilities of a Key Executive Officer, estate agents and
       13.2.4       Offences, penalties and disciplinary actions

13.3   CEA’s licensing and registration requirements

       13.3.1       Licensing requirements for Key Executive Officers, directors and
       13.3.2       Salesperson’s registration requirements

13.4   Regulation of estate agency work

       13.4.1       No dual representation by salespersons
       13.4.2       No referral to moneylenders
       13.4.3       No holding of transaction monies
       13.4.4       Use of Council symbols and representations
       13.4.5       Display of estate agent card

13.5   Compliance with CEA’s Code of Ethics and Professional Client Care

       13.5.1       Knowledge of applicable laws, practice circulars and guidelines, and
                    essential facts
       13.5.2       Due diligence and compliance with law and statutory requirements
       13.5.3       General duty to clients and public
       13.5.4       Not to bring discredit or disrepute to real estate industry
       13.5.5       Duty to clients in relation to signing of documents
       13.5.6       Obligations in respect of agreements
       13.5.7       Conveying offers and counter offers
       13.5.8       Interpretation or translation if necessary
       13.5.9       Duties in respect of advertisements
       13.5.10      Duty to avoid conflict of interests
       13.5.11      Recommending professional advice where appropriate
       13.5.12      Safeguarding confidential information

                                                                                Page 14 of 16

13.6    Compliance with CEA’s Code of Practice

        13.6.1     Management and supervision
        13.6.2     Estate Agent Card
        13.6.3     Claims and complaints
        13.6.4     Retention of documents and records

13.7    Prescribed Estate Agency Agreements

13.8    Compliance with CEA’s mechanisms for dispute resolution

        13.8.1    CEA’s complaints handling process
        13.8.2    Dispute resolution mechanism through mediation – arbitration

13.9    Continuing Professional Development

Competency Unit 14: Principles of Real Estate Marketing

14.1     Securing listings

14.2     Type of listings

14.3     Concepts and principles of marketing and understanding of buyer behavior

14.4     Marketing plan

14.5     Marketing mix

14.6     Promotions and advertising

14.7     Telephone techniques

14.8     Art of negotiation

14.9     Sales process

14.10    Sales documentation including Standard Estate Agency Agreement

14.11    Consumer Protection (Fair Trading) Act 2003

14.12    Pricing and influencing factors

14.13    Particulars of property presentation

                                                                            Page 15 of 16

Competency Unit 15: Business Development and Office Management

15.1    Business development opportunities

15.2    Business development efforts

15.3    Proper office organisation and management

15.4    Management information system

15.5    Principles of accounting

15.6    Record keeping – compliance with CEA’s Practice Regulations

Competency Unit 16: Real Estate Finance and Analysis

16.1    Sources of Financing

16.2    CPF Act

16.3    Approved residential property scheme

16.4    Approved non residential property scheme

16.5    HDB scheme

16.6    Type of loans and mortgages

16.7    Terms and conditions of loans and mortgages

16.8    Overdraft facilities

16.9    Prepayment

16.10   Default

16.11   Investment and financial analysis

                                                                      Page 16 of 16

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