Estate agents face regulations
The government is working on a draft real estate services law that could bring licensing and qualifications guidelines to a largely unregulated market.
REAL estate agents accustomed to fleecing clients and avoiding tax in a largely unregulated market may soon be brought to heel. The Myanmar Real Estate Services Association (MRESA), which submitted a draft proposal for real estate service legislation in August, met with the government’s legal affairs commission this week to discuss a formal draft.
U Tin Maung Oo, a member of the Legal Affairs and Special Case Commission, said that following the meeting with MRESA on November 6 the commission will try to draw up a formal draft quickly.
He believes the government would benefit financially from a Real Estate Service Law. Although the MRESA draft proposal does not mention a tax on real estate agents and brokers, any formal legislation would involve taxation, he said.
“Agents and brokers would pay taxes from their income and so the government would receive more income tax if the law is enacted,” he said. A Real Estate Service Law is also essential in order to make the sector favourable for foreign investment, he added.
“It’s a time when the country should enact laws in areas where they don’t exist, and a real estate service law is important for that sector,” he said. “There’s going to be foreign investors and they want laws [to protect their investment].”
A Condominium Law passed in January allows for foreigners purchasing Myanmar property, although the rules and regulations accompanying the law have not been published.
Having looked into the real estate service industry there are clearly problems, U Tin Maung Oo said. People acting as agents or brokers are unregulated and do not pay tax on the fees they receive for their services. Fees can be around K3 million for brokering the sale of a K100 million property, he said.
With no legal framework, agents can charge what they like, and there are no safeguards to protect against crooked agents cheating clients using fake contracts or other underhand methods, he added.
The MRESA also wants to see the industry properly regulated.
“With no law for this industry there is no comfort when commitments are made between buyer and seller,” said MRESA chair U Khin Maung Than. “If they make any mistakes it is difficult to take action.”
In preparing its draft law proposal, the association listed the various benefits for the industry – making sure services are provided in accordance with a legal framework, raising the standard of real estate services and supporting the real estate sector.
The MRESA also wants a licence system put in place, which would make it harder for brokers providing poor service or committing outright fraud.
“If the law is enacted the people who want to provide real estate services will need a licence, which will help prevent cheating and fakes,” said U Khin Maung Than. “People will need to take a class before they receive a licence, and it would become a higherstatus profession because operators are paying tax on their income.”
U Tin Maung Oo said the commission would include MRESA proposals in the government draft, “but we will consider advice from other associations and people”, he said. “We will try to make sure there is a law in place soon.”
Real estate agents study floor plans in a Yangon office.