A former Key Executive Officer (KEO) of an estate agent, Nicholas Kok Chiew Leong, was convicted and sentenced in April 2014 for handling transaction monies, according to the Council for Estate Agencies (CEA).
Kok was fined $2,500 for handling an option exercise fee of $4,000 for his clients, and another charge of a similar breach was also taken into consideration for sentencing.
A couple engaged Kok to purchase a unit in Clementi, and made an offer for it after the second viewing.
Two days after making the offer, Kok’s clients handed him $1,000 in cash, the proposed option fee and they signed the resale checklist and Option to Purchase.
Two weeks later, they handed Kok the option exercise fee of $4,000, which he subsequently passed to the sellers.
Salespersons are not allowed to handle transaction monies, so as to protect the clients’ interest and to minimise the risk involved in loss of sales proceeds. CEA also states it “is not under their scope of responsibilities”.
In a property lease transaction, transaction monies include rental deposits, monthly rentals and stamp duties. Meanwhile, transaction monies in a property sale and purchase transaction include option fee, down payment, stamp duties, deposits and sales proceeds.
The ban on handling transaction monies applies to buying and selling of properties situated in Singapore and leasing of HDB properties.