Es­tate agents face reg­u­la­tions

The Myanmar Times - - Front Page - MYAT NYEIN AYE my­at­nyeinaye@mm­times.com

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.”

Photo: Staff

Real es­tate agents study floor plans in a Yan­gon office.

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