The disciplinary committee of the Council for Estate Agencies (CEA) has slapped SQFT Global Properties Singapore and its former agent with financial penalties over the sale and marketing of a New Zealand property.
In a statement on Monday, the council said it has imposed a fine of S$10,000 on SQFT for one count of failing to supervise its former property agent, Paleenia Wong Mui Wah.
The council said the case involved the conduct of Ms Wong over the sale and marketing of Albany Heights Villas, a property in Auckland, New Zealand.
Ms Wong, who has been fined S$6,000 by the CEA, was found to have made misrepresentations to the investor. Some time in April 2011, the investor saw SQFT’s advertisement in the newspapers regarding the sale of freehold properties in New Zealand and contacted Ms Wong, whose details were included in the advert.
In May 2011, Ms Wong met the investor and his relatives and explained to them the investment offer relating to individual units in Albany Heights Villas known as a First Right of Refusal (FRR). When an investor decides to purchase the FRR, he would fill up a FRR agreement and pay a FRR price. The investor and his relatives decided to buy a unit in Albany Heights Villas and signed the FRR agreement and paid a FRR price of NZ$65,000 (S$65,500) put in a “Harkness Law Trust Account” with ANZ bank. The investor had then asked Ms Wong why the FRR price was being paid into the ANZ account and she told him that the money paid as the FRR price would be kept safe in the ANZ account for the construction of Albany Height Villas and that the developer, Albany Heights Villa Ltd, would not be able to use the money for other purposes.
But on June 2011, the monies in the ANZ account was subsequently transferred to the developer without any construction having started on the development.
Later in February 2013, Albany Heights Villa Ltd went into liquidation. The CEA said the investor has not been able to recover the money.
“Neither SQFT nor Ms Wong conducted proper due diligence checks on the ANZ account. SQFT failed to understand the true nature of the ANZ account that there was no restriction on the withdrawal of funds from the account by Albany Heights Villa Ltd and failed to supervise Ms Wong in her verbal representation to the investor. As such, Ms Wong had no basis at all to give the assurances to the investor. Accordingly, SQFT had failed to supervise Ms Wong to ensure that she conducted her estate agency work in a professional and reasonable manner,” said the council.
It cautioned that in buying foreign properties, investors should exercise due diligence beforehand and “should not rely solely on the advice from representatives of the foreign developer”.
“Given the complexities and risks involved, consumers should find out and understand pertinent information such as the foreign country’s rules and restrictions on property purchases and ownership, whether the property has obtained approvals from the authorities, taxes payable, pricing and terms and conditions of the purchase, the foreign property market condition, currency exchange risks, and so on,” the council said.
Adapted from: The Business Times, 6 December 2016