SINGAPORE: Real estate agency HSR, which was rebuked by the High Court over the failed en bloc sale of Thomson View Condominium, has been fined S$74,000 by the Council for Estate Agencies’ (CEA) disciplinary committee.
The agency has also been barred from undertaking any work related to en bloc sales for one year from Apr 20, 2016, the CEA said in a media release on Tuesday (May 17).
In September 2010, HSR was appointed by the condominium’s collective sales committee as its marketing agent. A tender for the collective sale of the development was eventually awarded to Wee Hur-Lucrum for S$590 million in October 2011.
However, the deal stalled after some homeowners lodged objections, arguing that the sale price was too low given that a Thomson Line MRT station was to be built nearby. The case was subsequently brought to the High Court.
It emerged that HSR had offered “incentive payments” to four homeowners to back the sale. This included additional payments amounting to more than S$548,000, and the reimbursement of a return business class air ticket from Europe to Singapore so that one owner’s wife could sign the collective sale agreement.
The court found that HSR had breached its duty as an advisor by offering the incentive payments, which brought about a conflict of interest, with the agency placing its own interest in collecting the commission, and the interests of the four homeowners, over the interests of other homeowners.
The en bloc deal was eventually voided by the High Court.
CEA said its investigations revealed that the lead property agent in HSR’s sales investment team had approval from the agency’s management to offer the incentive payments. The intention was to pay out the incentives through the commission from the collective sale, the CEA said.
HSR pleaded guilty to two counts of breaching the Code of Ethics and Professional Client Care. Another two counts were taken into account by the CEA’s disciplinary committee.
Disciplinary action was also initiated against the lead property agent. The agent, however, died before the disciplinary proceedings were completed.
AGENTS MUST BE TRANSPARENT IN THEIR DEALINGS: IEA
The Institute of Estate Agents, Singapore (IEA) told Channel NewsAsia that agents must be transparent in their dealings.
IEA president Harry Yeo said: "When we approach the sellers, we will say that this is the expected current price, this is what you can expect to get, and this is what each owner will get. If they are satisfied with the selling price, they will come in. If they think the selling price is too low to induce them, then they will stay put."
"It's their property; we must be fair and transparent," he added.
CEA, a statutory board under the Ministry of National Development, also has a system in place to manage complaints and disputes. It investigates reported malpractices and takes appropriate disciplinary action against errant property agencies and agents.