PROPERTY: Myanmar – Bill to regulate real estate brokers open to public
A real estate bill which includes legislation to regulate dealings between brokers and their customers was made open for public comment by the Union Parliament this month.
The 33-section bill, led by the Myanmar Real Estate Services Association, was first drafted in August 2016. When enforced, it will impose a stricter system of doing business on property brokers doing business in Myanmar and include punishments of up to six months imprisonment or a K3million fine, or both.
“Currently, property brokers are operating without any discipline. We want the agents that function as middlemen between buyers and sellers of property to be regulated and legal,” said Daw Moe Moe Aung, general secretary of the Myanmar Real Estate Services Association.
Included in the bill are stipulations such as requirements for those seeking a broker’s license to pass exams in eight-related subjects, said U Kyaw Swa Myint, secretary of the association in Nay Pyi Taw.
“Any citizen who attains the minimum age of 18 years will have to attend a two-day course arranged by the State. Licenses will be issued to those who have completed the course,” he said. Licenses will not be granted to those who have a history of crime, according to the bill.
Once qualified, brokers will be allowed act as agents for their customers in arranging for mortgage loans from State-owned and local private banks.
Meanwhile, property agencies working together with foreign firms will require a Myanmar Investment Commission permit, while a real estate services supervisory committee will be formed.
Service charges
The bill also provides regulations on the fees property agents can charge for their services. If the law comes into effect, agents will be eligible to charge a 3percent service fee for properties sold for under K100 million and 2pc for properties over K100 million, said U Kyaw Swa Myint.
However, the service charge can also depend on the terms of individual agreements between the agent and seller.
Meanwhile, real estate agents who successfully broker the rental of properties have the right to charge service fees or receive a commission from both the renter and tenant.
The bill states that sellers who fail to pay mutually agreed fees to their brokers, or those who switch brokers without prior notification after a contract has already been signed with their original broker, can be taken to court.
No stipulations have been included regarding the consequences for brokers found to be in violation of contracts or the service charge regulations though.
Buyer, seller protection
Members of the public say the bill lacks regulations that support property buyers and sellers. “The bill includes stipulations on the rights and obligations of the brokers and service providers but lacks sections that support consumers” said U Yan Aung, general manager of Asia Construction Co.
On the other hand, U Thaw Nay Zaw, lecturer at the Law Department of the Yadanabon University, said “it is okay if the law is not enacted as the absence of such a law will not hurt Myanmar. I think the government is implementing the law to improve the sector.”
U Nay Myo Kyaw, lower house MP from Htantabin constituency, said the purpose of the bill is to facilitate more efficient collection of taxes.
“Currently, property agents do not pay taxes on fees earned,” he said.
Although Myanmar doesn’t have special enacted laws to levy property taxes, this law is drafted with the intention for the real estate service businesses to be more systematic and taxable, U Nay Myo Kyaw said.
26 JUN 2018
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