Paper 2 · Ethics & Professional Conduct
The CEA Code of Ethics & Professional Client Care
Conduct is governed by the Code of Ethics and Professional Client Care, set out under the Estate Agents (Estate Agency Work) Regulations. It is not aspirational — it is enforceable, and breaches are a rich source of Section B scenarios.
Who the Code binds
The Code binds both the registered salesperson and the licensed estate agency they work through. The agency — and its KEO — must supervise its salespersons and ensure compliance, so one salesperson's misconduct can expose the agency too. Duties are owed primarily to the client, but honesty obligations also extend to the other party in the transaction.
Core duties of a salesperson
- Act with honesty, integrity and in the client's best interest.
- Avoid conflicts of interest (and disclose any that arise).
- Do not mislead — no false or exaggerated representations.
- Never hold or handle transaction money — and note this one is not in the Code at all: it is regulation 7 of the Estate Agency Work Regulations, a criminal offence. See the section below.
- Protect confidential information; keep proper records.
- Be competent and diligent, and keep up CPD.
Specific obligations under the PCC
- Use the prescribed estate agency agreements with clients.
- Give accurate information; do not exaggerate or make false representations.
- Recommend independent professional/legal advice where appropriate, and do not draft legal documents beyond your role.
- Disclose any conflict of interest or personal interest in the transaction.
- Handle complaints properly and avoid high-pressure / hard-sell tactics.
Handling money — the rule is regulation 7, not the Code
"Never touch the client's money" is the most-tested conduct rule of all, and candidates lose marks by attributing it to the Code. It is not in the Code. It sits in regulation 7 of the Estate Agents (Estate Agency Work) Regulations 2010, which makes it a criminal offence — a separate and heavier consequence than a Disciplinary Committee sanction. Regulation 7(1): no estate agent or salesperson shall hold or handle any money for or on behalf of any party in relation to (a) the sale or purchase of any property situated in Singapore, or (b) the lease of HDB property. On conviction: a fine of up to $10,000, imprisonment of up to 6 months, or both — plus a further fine of up to $500 a day for a continuing offence.
| Money passing through the salesperson's hands | Regulation 7 position |
|---|---|
| Option fee, exercise money, deposit or purchase price on a sale or purchase of any property in Singapore | Prohibited |
| Rent, security deposit or other money on a lease of HDB property | Prohibited |
| Delivering a crossed “account payee” cheque or cashier's order drawn in favour of another party to the transaction | Allowed — reg 7(2)(a) |
| Remuneration or reimbursement for the management, repair or renovation of the property, under a written contract or authorisation | Allowed — reg 7(2)(b) |
| Rent or deposit on a private residential tenancy | Outside regulation 7 — but read the trap below |
The trap
Two halves of one trap. (1) The courier exception is real. Reg 7(2)(a) expressly permits a salesperson to deliver a crossed account-payee cheque or cashier's order made out to the other party. What is banned is holding or handling money for or on behalf of a party — cash, a cheque made out to *you*, or anything parked in your own account. An option that says “the agent hands the seller the buyer's crossed cheque made out to the seller” is not the breach. (2) The scope is narrower than candidates assume. Reg 7(1) reaches the sale or purchase of any property and the lease of HDB property — a private tenancy's rent and deposit fall outside it. That is not a licence to collect them: the Code's duties still apply and CEA's guidance is that consumers should pay the payee directly. Read the question: is it asking about an offence under reg 7, or a breach of the Code?
- Your commission is not transaction money — it is the fee for your own services, not money held for a party. But it is payable through the estate agent you are registered with; a salesperson does not collect it personally from the client.
- Referral fees need prior written consent. Under the Code a salesperson must not directly or indirectly accept any fee, reward, commission, rebate or other payment for referring a third party's services in connection with the client's transaction without the client's express knowledge and prior written consent — and must disclose both the fact and the quantum in advance, in writing.
- Never point a client at a moneylender. Regulation 6 bans introducing, referring or recommending a client to any moneylender, and bans receiving any commission, reward, fee, payment or benefit from one. Penalty: a fine of up to $25,000, up to 12 months' imprisonment, or both — the same ceiling as dual representation under regulation 5.
Mandatory vs best practice
Provisions phrased as “shall” are mandatory obligations; “should/may” signal recommended best practice. The exam deliberately tests whether you can tell a binding duty from a guideline.
Consequences of a breach
CEA investigates complaints and breaches, and the outcome then runs on one of two tracks depending on how serious the breach is assessed to be. Candidates routinely assume every breach ends up before a Disciplinary Committee — most do not.
| Letter of Censure (LOC) | Disciplinary Committee (DC) | |
|---|---|---|
| Used for | Less serious breaches | Serious breaches |
| Who decides | CEA itself | A DC of at least 3 members, nominated from CEA's Disciplinary Panel (practising solicitors, architects, engineers and industry practitioners, among others) |
| Financial penalty | Up to $5,000 — per case, or per breach for AML/PF/TF | Up to $200,000 on an estate agent and $100,000 on a salesperson — per case, or per breach for AML/PF/TF |
| Other orders | A written censure, with or without a penalty | Suspend or revoke the licence/registration, attach or vary conditions on it, or admonish or reprimand in writing |
Appealing a decision
"There is a right of appeal" is not an answer — know where the appeal goes. It goes to an Appeals Board that is independent of CEA: not back to CEA, and not to the courts. The notice of appeal must be lodged within 14 days of being notified of the decision, with a non-refundable $1,000 fee, and the Appeals Board's decision is final. The same Board hears appeals against CEA's own decisions — for example on a licence or a registration — as well as against a DC's orders. (Confirm the current procedure with CEA.)
Keep discipline and prosecution apart. An LOC or a DC order is a regulatory sanction against the licence or registration. Where the conduct is also an offence — dual representation under regulation 5, handling transaction money under regulation 7 — the salesperson can be prosecuted in court on top of it. One set of facts, two separate consequences.
Worked example — spot the breaches
Section B rarely asks you to recite the Code — it gives you a messy scenario and asks which actions breach it. Work through this one before reading the answer.
Worked case study · Section B style
Salesperson Wei is exclusively engaged by a seller. During the deal he does three things: • takes the buyer's $20,000 option-exercise money in cash and keeps it in his own bank account “to pass to the seller later” • tells the buyer the unit “has approval for a roof terrace” without checking • agrees to also act for the buyer to “speed things up”, and discloses this to both sides
- (i) Receiving and holding the buyer's transaction money is an offence under regulation 7
- (ii) Stating an unverified “approval” can be a misleading representation
- (iii) Acting for both sides is a conflict that disclosure does not cure
- (iv) Because Wei disclosed the dual role, all three actions are compliant
- A.(i) and (ii) only
- B.(i), (ii) and (iii) only
- C.(iii) only
- D.All of the above
Show answer & explanation
Answer: B. (i)–(iii) are each breaches. Taking the money in cash and holding it himself is squarely within regulation 7(1) — and the reg 7(2)(a) exception does not save him, because that covers only delivering a crossed account-payee cheque or cashier's order drawn in favour of the other party, not receiving cash. An unverified representation that induces the buyer is misleading; and dual representation is prohibited by regulation 5 *regardless of the consent of any or all parties*, so disclosure does not cure it. (iv) is the trap — disclosure never legitimises prohibited conduct. On these facts Wei faces disciplinary action under the Code and prosecution for the reg 5 and reg 7 offences.
Common mistakes
- Receiving or holding transaction money for a party — an offence under regulation 7, not merely a Code breach.
- Assuming disclosure cures a prohibited conflict (e.g. dual representation) — it doesn't.
- Drafting legal documents / giving legal advice beyond the salesperson's role.
- Treating the Code as optional 'best practice' rather than binding rules.
The trap
Misreading a mandatory “shall” obligation as merely recommended. The Code sets binding duties — and the most-tested money rule is not even in the Code: holding or handling transaction money is an offence under regulation 7 of the Estate Agency Work Regulations.
Exam takeaway
Treat the Code as enforceable law, not etiquette. In a scenario, name the specific duty breached (conflict? misleading? handling money?) and the likely consequence — that's what earns the marks.
Apply it · the IRAC method
To close a sale quickly, a salesperson tells a buyer the flat 'definitely has no defects' although he has not checked, and asks the buyer to pay the option money in cash directly to him so he can 'pass it to the seller later'.
- IIssue: Has the salesperson breached the Code of Ethics and Professional Client Care through misrepresentation and improper handling of the client's money?
- RRule: Under the Code of Ethics and Professional Client Care, a salesperson must act with honesty and integrity, exercise reasonable competence and care, avoid misrepresentation and act in the client's interest. Separately, regulation 7 of the Estate Agents (Estate Agency Work) Regulations 2010 makes it an offence for an estate agent or salesperson to hold or handle any money for or on behalf of any party to the sale or purchase of any property in Singapore, or the lease of HDB property — the only exceptions being delivering a crossed account-payee cheque or cashier's order drawn in favour of another party to the transaction, and remuneration or reimbursement for managing, repairing or renovating the property under a written contract or authorisation.
- AApplication: Stating the flat 'definitely has no defects' without verification is a misrepresentation and a failure of honesty and competence under the Code. Taking the option money in cash for himself to pass on later is holding money on behalf of a party to a sale — squarely within regulation 7(1), and outside the reg 7(2)(a) exception, which covers only delivering a crossed cheque or cashier's order already made out to the other party.
- CConclusion: The salesperson has breached the Code by misrepresenting the property and committed an offence under regulation 7 by holding the buyer's money. He must give only accurate, verified information and have the buyer pay the seller (or the conveyancing solicitor) directly — or face CEA disciplinary action and prosecution carrying a fine of up to $10,000, imprisonment of up to 6 months, or both.
Ready to test yourself?
Practise exam-style questions on Ethics & Professional Conduct — with instant answers and explanations.
Practise Ethics & Professional Conduct questions →Common questions
- Is the CEA Code of Ethics legally binding?
- Yes — it sets out mandatory professional obligations under the estate-agency regulations, and breaches can result in disciplinary action against the salesperson or agency.
- Can a salesperson appeal against a Disciplinary Committee decision?
- Yes. The appeal goes to an Appeals Board that is independent of CEA — not back to CEA and not to the courts. The notice of appeal must be lodged within 14 days of being notified of the decision, together with a non-refundable fee of $1,000, and the Appeals Board's decision is final. The same Appeals Board also hears appeals against CEA's own decisions, such as one on a licence or a registration. Confirm the current procedure with CEA.
- What is Professional Client Care (PCC)?
- PCC is the set of standards governing how a salesperson must serve and protect clients — acting in their best interest, communicating honestly, and safeguarding their money and information.
- Can a property agent hold my deposit or option money?
- No. Regulation 7 of the Estate Agents (Estate Agency Work) Regulations 2010 makes it an offence for an estate agent or salesperson to hold or handle any money for or on behalf of any party to the sale or purchase of a property in Singapore, or to the lease of an HDB property. Conviction carries a fine of up to $10,000, imprisonment of up to 6 months, or both. Pay the seller or the conveyancing solicitor directly.
- Can my agent pass my cheque to the seller?
- Yes, within a narrow exception. Regulation 7(2)(a) permits a salesperson to deliver, on behalf of a party, a crossed "account payee" cheque or cashier's order drawn in favour of another party to the transaction. The agent is acting as a courier for an instrument that can only be banked by the named payee — quite different from taking cash, taking a cheque made out to themselves, or holding the money in their own account, all of which are offences. Regulation 7(2)(b) separately allows a salesperson to receive remuneration or reimbursement for managing, repairing or renovating the property under a written contract or authorisation.
- Does the transaction-money ban cover rent on a private condo tenancy?
- Regulation 7(1) reaches the sale or purchase of any property situated in Singapore and the lease of HDB property — so a private residential tenancy's rent and security deposit fall outside the regulation 7 offence. That is not permission to collect them: the Code of Ethics still requires honesty, diligence and the client's interests to come first, CEA's guidance is that consumers should pay the payee directly through verifiable means, and mishandling the money can still lead to disciplinary action or a criminal charge such as criminal breach of trust. In the exam, check whether the question asks about an offence under regulation 7 or a breach of the Code.
- What happens if an agent breaches the Code of Ethics?
- CEA investigates, then takes one of two routes. Less serious breaches are dealt with by CEA itself through a Letter of Censure, with or without a financial penalty of up to $5,000. Serious breaches are referred to a Disciplinary Committee of at least three members drawn from CEA's Disciplinary Panel, which can impose a financial penalty of up to $200,000 on an estate agent or $100,000 on a salesperson, suspend or revoke the licence or registration, attach or vary conditions on it, or issue a written reprimand. For anti-money laundering, proliferation financing and terrorism financing breaches those caps apply per breach rather than per case, from 1 July 2025. Confirm the current framework with CEA.
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