A former property agent has been fined for handling $93,000 of his client's money in cash - the largest amount to date for which an agent has been prosecuted.
Goh Chung Yong, 48, had told his client that he would pass the cash to the client's conveyancing lawyers. Instead, Goh used the money to pay off debts he owed to loan sharks, and lied that it had been stolen from him, according to a Council for Estate Agencies release yesterday.
He was convicted yesterday and ordered to pay a $10,000 fine (in default, seven weeks' imprisonment).
It is illegal for property agents to handle transaction monies for or on behalf of anyone involved in the sale and purchase of a property, and in leasing Housing Board (HDB) properties.
The law took effect in 2010. Seventeen agents - including Goh - have been prosecuted since then.
Goh was previously a PropNex Realty agent. In 2014, a flat owner engaged Goh to sell his Sembawang HDB flat and look for another flat to buy.
In January last year, the flat was sold for $360,000. The owner had earlier agreed to buy a flat in Yishun for $308,000.
Goh asked the owner for $106,000 in cash - $93,000 to pay the conveyancing lawyers handling the purchase, and the rest as commission. Goh said he would pass the money to the lawyers since his office was near theirs.
The owner gave him the cash. But when the lawyers contacted the owner soon afterwards, it emerged that the money had not made it to them.
On March 12 last year, the owner lodged a complaint with PropNex, saying he could not complete the purchase of his new flat in time.
PropNex advanced the sum of $93,000 to the owner, and helped to get an extension from the HDB. The purchase was completed on March 27 last year.
PropNex terminated Goh as one of its agents. Investigations revealed that Goh initially lied to PropNex that the cash had been stolen from his car. He promised to return the money out of his own pocket.
He later admitted he had used the money to pay off debts. On April 16 last year, Goh repaid PropNex after selling his own condominium.
The Council for Estate Agencies advises consumers not to hand transaction monies to their property agencies and agents.
In a sale transaction, such monies include the option fee, downpayment, stamp duties, deposits and sales proceeds. Valuation fees and commission are not considered transaction monies.
Real estate agencies said clients might not realise that it is illegal for agents to handle cash.
Cheques and cashier's orders are more commonly used by clients in such deals, said PropNex chief executive officer Mohamed Ismail Gafoor. He said if a client requests the use of cash, the agent should advise him to get a cashier's order instead.
"Even though it's the law, not everyone may know. I think consumer education still has to catch up," said ERA Realty key executive officer Eugene Lim.
The council said it will continue to take action against those who commit the offence.
The public can report cases of property agencies or agents who handle transaction monies to CEA by calling 1800-6432555 or e-mailing firstname.lastname@example.org.