Buying and selling property is no trivial matter, and can be pretty overwhelming for the inexperienced. There’s plenty of paperwork involved, and big sums of money changing hands. That’s why most people look at hiring a property agent, so they can skip the hassle and tedium that comes with selling their property.
In October 2019, a property agent was caught trying to pull a fast one on the buyer he was representing. PropNex Realty agent Ngu Ping Chuan James Ethan (James Ngu) was fined $30,000 and suspended 12 months — the highest fine and longest suspension meted out by the Council for Estate Agencies (CEA) to date — for unprofessional and unethical conduct in a 2016 property transaction.
Representing a client who was looking to buy a home in the range of $900,000, the 39-year-old brought the client to view a condominium unit in the East of Singapore that was priced at $1.04 million. After the viewing, Ngu told the seller’s agent about his client’s interest in the property and asked about the commission payable to him.
Deception Tactics
The seller’s agent told Ngu that the owner was willing to transact at $1.02 million, with a 1% commission that would be payable to Ngu, amounting to about $10,000.
Ngu, however, said he wanted a commission of 2.5 to 3%. He also did not tell his client about the seller’s offer – which, under CEA regulations, he would have been obliged to.
He then misrepresented to his client that the property was valued at $1.18 million and suggested an offer of $1.06 million, when the asking price was $1.04 million. Ngu’s client did his own share of research – after conducting checks with a bank, the client discovered that the property was actually worth $950,000 to $1 million.
Going full rogue
When the client eventually told Ngu to start negotiations for buying the property in April 2017, Ngu started spinning a series of lies:
- He told his client he conveyed an offer of $950,000 that was rejected by the seller
- He told his client the seller had made a counteroffer of $1.04 million, when in reality no such offer was made (misleading his client)
- He told the seller’s agent his client was willing to buy the property at $1.04 million with a 4% commission that would be paid by the seller. This commission would be shared between both agents. However, Ngu’s client did not give any instructions of the sort (conveying a false offer)
- He demanded 3% commission for himself, which was about $30,000
- The seller rejected this offer, instead offering 1% commission to his own agent and 2% commission to Ngu, which Ngu did not accept
- Ngu also did not convey the counteroffer of a sale price of $1.02 million from the seller’s agent, with Ngu collecting commission from his own client instead of the seller. Ngu did not tell his client about the counteroffer
- He then advised his client against buying the unit, citing the high price (acting against his client’s interests)
In the end, Ngu’s client contacted the seller’s agent directly instead, and a $1.04 million offer was accepted.
Pleading Guilty
Ngu faced a total of eight charges under the CEA Code of Ethics and Professional Client Care, of which he pleaded guilty to three charges. The CEA Disciplinary Committee meted out its harshest sentence yet as Ngu was fined $30,000 and suspended for 14 months on each charge, which was reduced to 12 months upon appeal. The suspension periods would run concurrently.
CEA highlighted that Ngu’s conduct led to his client suffering a loss amounting between $20,000 and $30,000 in the property transaction.
What to do if something similar happens to you:
If you have evidence that your agent is not acting in your best interest, you can lodge a complaint with the CEA.
Two Other Cases Where Property Agents Stepped Out of Line
Unsavoury behaviour much like what Ngu did was once par for the course during the 1990s and 2000s, before the CEA was established in 2010 as a government agency for regulating property agents and agencies in Singapore. Here are two other cases where property agents stepped way out of line:
#1: Conducting agency work without CEA registration
In April 2019, 31-year-old Lim Ruiwen was convicted of nine charges of conducting estate agency work without being registered as a property agent with the CEA. He was convicted and fined $72,000, and if he failed to pay the fine, he would face jail time of 27 weeks.
Lim’s registration had expired after 31 December 2016, when he was terminated by Global Alliance Property Pte Ltd after a one-year stint. Although his registration had lapsed without him applying for a renewal, Lim continued acting as a sales staff for Global Alliance. He posted nine advertisements for the rental of HDB flats and private properties on public online property portals between January and March 2017.
Each offence carries a fine of up to $25,000, up to 12 months’ jail, or both.
(In another case in May 2019, Vanessa Thien Cai Yen was fined $15,000 for acting as a property agent without a licence, even going as far as to conduct viewings and close a deal for a rental room!)
What to do if something similar happens to you:
Prevention is easier than cure. Always check whether your agent is registered before dealing with him/her. If you are using PropertyGuru, clicking on the agent’s name on a listing page takes you to the agent’s profile page. You can then click on the agent’s registration number (RXXXXXXX), which will take you to CEA’s Public Register. If the agent is licensed, his/her name should appear.
#2: Not doing due diligence for vulnerable clients
In Sep 2017, Ng Ser Leong represented an elderly couple in their 80s, who had wanted to sell their HDB flat. Despite knowing the elderly female seller was senile, Ng had obtained her thumbprints to facilitate the sale. He did this without her children’s knowledge, and while her husband was hospitalised for a fall.
Although the sale was later aborted, the children filed a complaint with the CEA, who subsequently slapped him with two charges for breaching its Code of Ethics and Professional Client Care (CEPCC). The first of the charges was for the lapse of due diligence under paragraph 5(1) of the CEPCC.
The second charge under paragraph 9(2)(d) states that property agencies and agents "must not ask or procure anyone to sign an agreement in which essential or material terms or information such as the property address, price, dates, names, and commission payable have been omitted or the relevant space for such terms or information is left blank or unfilled".
For breaching these two counts, Ng was fined $6,000 and banned from conducting estate agency work for a total of 11 months.
What to do if something similar happens to you:
Always insist that any document, such as the Option to Purchase (OTP) or Tenancy Agreement, is filled in with the necessary details before you sign on the dotted line. If you have elderly parents who are going through with a property transaction, it might be wise to ask to view a copy of any document they might be signing.
4 Key Steps to Note When Engaging A Property Agent in Singapore
When it comes to transacting property in Singapore, property agents can take a large load off you and potentially reduce lots of headache for you. At the same time, you don’t want them creating headache for you through their wrongful conduct as we’ve just seen.
CEA puts forth these 4 important steps when hiring a property agent in Singapore, which we’ve summarised in a convenient table for you below.
1)
Check that your property agent is registered with CEA
Every property agent in Singapore needs to be registered with CEA via a licensed property agency. As such, every property agent who is registered should have a unique CEA registration number (RXXXXXXX).
2)
Negotiate commission rates first
Discuss the commission rates with your property agent before work commences, as well as honour them once the transaction is done.
Property agent commission rates are not fixed, and CEA does not set rates or provide any guidelines for them. There is also no minimum or maximum percentage.
When negotiating the commission, remember to check if GST is included too. Only GST-registered property agencies can charge GST, and you can check here whether your property agent’s agency is registered.
When the property transaction is completed, the commission should be paid to the property agency, not your property agent.
3)
Make sure your property agent represents only you in the property transaction
Your property agent cannot be appointed by both the buyer and seller in the transaction.
Furthermore, your property agent should do the necessary transaction checks. CEA provides checklists that are helpful in guiding you and your property agent.
4)
Sign 2 crucial documents
Do remember to sign the following 2 documents:
- The estate agency agreements prescribed by CEA
- An estate agency agreement is essentially a contract between you and the property agency, meant to protect both parties. This agreement indicated the agency’s duties, the commission rate agreed on, and also requires the property agent to declare if there is any conflict of interest
- Before your property agent begins work, use the relevant agreements found here.
- You can read more here about which agreement type will be the best for you.
- Customers’ particulars forms
- After you’ve decided to engage a property agent, you’ll need to fill in a compulsory Customer’s Particulars Form. This form will be provided by your property agent, and is among the measures property agents must take to prevent counter-terrorism financing and money laundering in Singapore.
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