Property firm, agent fined after client loses S$65,000 in overseas investment

SINGAPORE — Real estate firm SQFT Global Properties Singapore and its agent, Paleenia Wong Mui Wah, were fined for misleading a customer over a foreign property purchase, which caused the customer to lose NZ$65,000 (S$65,670).

The Council for Estate Agencies (CEA) said in a press release yesterday that its disciplinary committee fined the firm S$10,000 in October, for one count of failing to supervise Wong on her work in marketing and selling Albany Heights Villas, a property in Auckland, New Zealand.

Wong was fined S$6,000 last week for giving information to the customer that turned out to be false.

Around mid-April in 2011, the customer, who was a prospective investor, saw SQFT’s advertisement about freehold properties in New Zealand, along with Wong’s contact number, in the newspapers.

SQFT had begun marketing the development to the Singapore public before it entered into an agreement with the property developer, Albany Heights Villas Ltd, on May 23 that year.

On May 22 the same year, the customer and his relatives met up with Wong, who explained to them the investment offer known as a “first right of refusal” (FRR) relating to individual units at Albany Heights Villas.

To buy a unit there, the investor had to complete and sign an FRR agreement and pay an FRR price of NZ$65,000 into a “Harkness Law Trust Account” with ANZ bank.

When the investor asked Wong why the FRR fee was being paid into the ANZ account, she told him that the money would be kept safe in the account for the construction of Albany Height Villas and the developer would not be able to use the money for other purposes.

However, in June 2011, the money was transferred to the developer without any construction having started on the development.

In 2013, on or around Feb 5, the developer went into liquidation, and the customer was not able to recover the money.

The CEA said that SQFT and Wong failed to conduct 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 Ltd, 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.”

Given that buying a foreign property is a big investment, and there are complexities and risks involved, the CEA cautioned that consumers should exercise due diligence before entering into any agreement with property companies, and should not rely solely on the advice of the foreign developer’s representatives.