You may have plans to purchase, sell or rent out your property when you reach retirement age. This segment equips you with the necessary knowledge to be a savvy consumer and maximise the value of engaging the services of a salesperson in your property transactions.
Do Not Fall Prey
Below are some case studies for consumers to take note and you can avoid the pitfalls during property transactions.
Case Study 1: Unregistered Salespersons
A 91 year old woman Madam T engaged the service of Miss M to rent out a room in her flat after seeing the advertisement put up by M. M found a tenant for T and facilitated the rental of the room. T was however unaware that M was not a registered salesperson.T’s grandson found out about the rental transaction and told M that they did not wish to proceed with the transaction.
M then turned up at the unit and caused a commotion. The police was alerted to the scene. The grandson subsequently reported to CEA about the matter. CEA has decided to charge M for conducting estate agency work without registration.
Learning Points:
Verify that the real estate salesperson you engaged is registered with CEA using the public register.
Case Study 2: Alleged misappropriation of funds by salesperson
An 89 year old man engaged a real estate salesperson T in the sale of his private property. The client, wheelchair bound and partially blind, was staying with his mentally challenged daughter and a domestic helper. The salesperson facilitated the sale of the property and helped the client purchase another smaller property with the sale proceeds. The client also issued cheques amounting to half a million in T’s name to pay for the down payment of the new property, the renovation and buying of furniture for the unit. However, T did not carry out the full instructions and used part of the money for his own benefit, including drinking and spending it at the casinos.
In 2011, the police informed CEA that T was prosecuted for Criminal Breach of Trust. CEA carried out its own checks and determined that T’s actions did not deem him fit to be a salesperson. CEA then denied T of his renewal for registration in November 2011. T is no longer a salesperson and the case is undergoing trial at court.
Learning Points:
- Do not entrust you salesperson with money that is meant for use in purchasing and preparation of the property.
- Involve your family members/relatives in discussions regarding the transaction.
Case Study 3: Salesperson providing wrong information
A 57 year old woman wanted to rent an apartment and informed her salesperson of her two requirements: the property was to have a minimum floor area of 1367 square feet and at least three bedrooms. Her salesperson found her an apartment in Simei. Both her salesperson and the landlord’s confirmed that the floor area for the three bedroom unit was 1367 square feet when she viewed the apartment. The woman rented the unit but subsequently found out that the actual floor area was only 1270 square feet. She lodged a complaint with CEA against her salesperson for providing her with the wrong information.
Her salesperson had failed to verify the information given by the landlord’s salesperson on the floor area. The landlord’s salesperson admitted her mistake too and claimed that the owner had given her the wrong information. Both salespersons subsequently received a Letter of Advice from CEA.
Learning Points:
Raise a formal complaint to CEA about salesperson for misrepresentation, misconduct, etc.
Case study 4: Conflict of Interest
Kee was charged for failing to declare her interests which were in conflict with those of the buyers (her clients) as one of the co-sellers was her husband and colleague, and the other two co-sellers were her parents-in-law. She had also facilitated the buyers to enter into a supplemental agreement to extend the sellers’ stay beyond completion. She also arranged the sellers to grant the Option to Purchase (OTP) on the same day as the completion of the Sellers’ Resale Checklist – which was not allowed within the 7 days of “cooling off period”. Kee had also asked the sellers to sign an undated OTP and she had made a false declaration in her salesperson’s Statutory Declaration that the buyers and sellers had not entered into a supplemental or other agreement other than the standard.
For failure to declare her interests, the Disciplinary Committee (DC) imposed a suspension of three months and a financial penalty of $3,000. For failing to comply with HDB resale procedures, she was sentenced to a one month suspension. The sentence of suspension for both charges ran concurrently. In addition, the DC awarded $1,000 as costs to CEA.
Learning Points:
Raise a formal complaint to CEA about salesperson for misrepresentation, misconduct, etc.
Case Study 5: Avoid premature cashing out of HDB Homes
A 70 year old widow Y faced financial difficulties and wanted to sell her flat for urgent cash flow after her husband passed away recently. Y engaged a real estate salesperson to sell her flat but decided to cancel the sale after some reconsideration. As she had already signed the Option to Purchase (OTP), she was likely to face legal action from the buyer. Considering Y’s psychological state after her recent bereavement, the salesperson could have explained the consequences of premature cashing out to his client and advised Y to consult her family members before persuading her to sign the OTP.
Learning Points:
- Consult other family members, such as your children, extensively and know the consequences of encashing your home before deciding to sell your flat.
- Your salesperson should give you appropriate advice and explain the consequences of premature cashing out.
Source: CEA – Updated on 23-May-2014
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