The Council for Estate Agencies' (CEA) Disciplinary Committee has slapped a $10,000 fine on real estate agency SQFT Global Properties Singapore for failing to supervise the conduct of its then agent on the sale and marketing of a New Zealand property in 2011.
The agent, Ms Paleenia Wong Mui Wah, was fined $6,000 for misrepresentation towards an investor of a unit in Albany Heights Villas, Auckland, said the CEA in a media release issued yesterday.
Around mid-April 2011, the investor contacted Ms Wong after seeing an advertisement for New Zealand freehold properties in local newspapers. He decided to buy a unit after meeting Ms Wong.
After signing the First Right of Refusal agreement, the investor was told to pay a total of NZ$65,000 to "Harkness Law Trust Account" with ANZ bank.
When asked, Ms Wong falsely told the investor that the money would be kept safe in the account for the construction of property. She added that the developer, Albany Heights Villa, would not be able to use the money for other purposes.
However, in June 2011, the developer took money from the account before construction had started. It later went into liquidation in 2013. The investor has been unable to recover his money.
"Neither SQFT nor Wong conducted proper due diligence checks on the ANZ account," said the CEA.
It added that SQFT had failed to understand the "true nature" of the account, which had no restriction on withdrawals by the developer.
"Wong had no basis at all to give the assurance to the investor. Accordingly, SQFT had failed to supervise Wong to ensure that she conducted her estate agency work in a professional and reasonable manner," it said.
The duties, business activities and conduct of property agencies and agents in Singapore are governed by the Estate Agents Act and Regulations, which include the Code of Practice and the Code of Ethics and Professional Client Care.
Those in breach of the codes will face action from the CEA Disciplinary Committee, which includes practising solicitors and real estate industry professionals.
To guard against the complexities and risks of buying foreign properties, CEA has advised consumers to first find out important information, such as the foreign country's rules, restrictions on property purchases and ownership, whether the property has obtained approvals from the authorities, taxes payable, and currency exchange risks.
The CEA said: "Consumers should exercise due diligence before entering into any agreement to buy foreign properties. They should not rely solely on the advice from representatives of the foreign developer."