Property Agents Set for Tighter Control

(2/14/2009)

The government and the Indonesian Association of Real Estate Brokers (AREBI) have promised to begin surveying the actual number of property agents operating in Indonesia as part of an eventual certification process commencing from April 2009.

The government is targeting that all property brokers involved in the purchase and sale of properties will be qualified to hold licenses/certification by August of 2009.

According to the Director General of Domestic trade from the Department of the Trade, Subagyo, the establishment of a professional certification program for real estate agents is the first step in a program to bring order to the nation's real estate sector.

Speaking at a real estate conference in Jakarta, Trade Minister Mari Eka Pangestu said current steps are intended to bring a certainty of law to both consumers and brokers, and eliminate unhealthy business practice.

Pangestu said that in principle all forms of business must have a clear identity and follow set rules of the game. Adding, "anyone who wants to do business in the country must have a clear identity."

New Rules

Under the new rules, real estate agents and property consultants will be required to hold a new property agency business license (surat izin usaha perusahaan perantara, perdagangan properti SIUP4). In the past a simple trading license (SIUP) was sufficient, with the new rules having the additional requirement of professional certification.

The Chairman of AREBI, Tirta Setiawan, told the press that the final requirements for certification are being discussed the National Professional Certification Board (BSNP). According to Setiawan, through the beginning of February some 350 real estate companies from an estimated total of 1,500 have indicated their readiness to follow the new rules.

The President Director of ERA Indonesia, Darmadi Darmawangsa estimates the annual value of secondary property transactions approaches Rp. 100 trillion (US$8.6 billion). From that total 30% is estimated to be handled by professional brokers with the remainder processed by traditional brokers and unlicensed foreign property agents.