Dennis Wee Realty (DWR) has been prohibited from marketing or transacting foreign properties until 24 November 2018 and is required to pay a fine of $66,000, announced the Council for Estate Agencies’ (CEA) Disciplinary Committee on Wednesday (6 December).
“This is the largest fine meted out so far to a property agency for failing to abide by the regulations related to estate agency work involving foreign properties,” said CEA in a statement.
DWR was convicted of six charges under paragraph 16 of the Practice Guidelines for Estate Agents and Salespersons Marketing Foreign Properties (PGMFP). It states that estate agents appointed by a developer must provide a written advisory to clients that they should conduct due diligence. They also need to highlight the risks involved in purchasing offshore properties, such as the fact that these deals are subject to foreign laws.
In 2014, DWR locally marketed units at the Ibis Budget Hotel in Lymm and Ibis Budget Hotel in Knutsford, both in the UK. The agency had exclusive rights to sell these properties in Singapore. A unit at the Knutsford project was sold for £82,500 (approx. $169,645), while that in the other went for £82,500 (about $169,645).
In the same year, six sets of investors, including one who acted on behalf of his firm, purchased five units in the Knutsford project and 13 units in the Lymm project. Collectively, they paid £1,641,000 (around $3,374,400) in booking fees and as full payment for the units to the UK developers via DWR.
The investors were promised returns ranging from eight to 12 percent for the first three years. Thereafter, the developers guaranteed to buy back the units at a premium of nine to 20 percent over their purchase price.
The six investors received monthly returns for periods ranging from one to six months before payments stopped. Then in early-2015, the developers — Hotel Options (Lymm) Limited and Hotel Options (Knutsford) Limited — went into administration.
This article was edited by Keshia Faculin.