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Real estate agency, agent fined over sale of foreign property
Artist’s impression of Albany Heights Villas, a residential project in Auckland, New Zealand.
The Council for Estate Agencies’ (CEA) Disciplinary Committee has fined SQFT Global Properties Singapore $10,000 for failing to supervise the conduct of one of its former agents on the sale and marketing of a property in Auckland, New Zealand.
The ex-agent, Paleenia Wong Mui Wah, was also fined $6,000 for misrepresenting to an investor that the NZ$65,000 price to be paid in relation to his purchase of a unit in Albany Heights Villas would be kept safe in a law practice’s trust account with ANZ bank for the construction of the said development.
Wong assured the investor that the developer, Albany Heights Villa, would not be able to use the money in the trust account for other purposes.
In June 2011, however, the developer took the money from the trust account without any construction having started on Albany Heights Villas.
The developer subsequently went into liquidation in February 2013, and the investor was not able to recover his money.
In a statement, the CEA noted that neither SQFT nor 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 and failed to supervise Wong in her verbal representation to the investor.”
As such, Wong had no basis at all to give the assurances to the investor, while SQFT had failed to supervise Wong to ensure that she conducted her estate agency work in a professional and reasonable manner, noted the CEA.
Meanwhile, the CEA has advised consumers to exercise due diligence prior to entering into any agreement to purchase foreign properties.
“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, etc,” it said.
The CEA added that consumers should not rely solely on the advice of the foreign developer’s representative, and can refer to its guide on buying foreign properties for more tips.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
