Agency and individual legal due diligence is important in any property transaction, and this fact was highlighted in Singapore when a leading real estate agency was fined S$ 66,000 (THB 1.59 million) for misleading investors.
The agency was also banned from marketing and transacting foreign properties for 12 months.
Singapore agency Dennis Wee Realty failed to properly advise its investors of the risks involved in purchasing foreign properties, after which the investors did not receive returns promised to them.
This is the largest such fine imposed against a Singapore property agency for failing to abide by regulations related to estate agency work involving foreign properties by the city state’s Council for Estate Agencies (CEA).
The real estate agency faced a total of 18 charges including failing to advise investors of the risks involved in buying foreign property, and for making “false representations” in its advertising.
It was eventually convicted of six charges.
The Singapore agency has also been marketing Thailand property to Singapore buyers in recent weeks and months, including in Krabi and also Bangkok properties The Park at EM District, Noble Around, Space ID by Areeya and The Banyan Tree Residences.
This investment in U.K. hotel rooms is something I am familiar with, something I have written about for the past four years, and been involved in meetings with Singapore investors and the U.K. developer here in Bangkok.
During 2014, Singapore investors reportedly purchased 21 units in budget hotel developments. I know for a fact the investment had buyers based in Thailand and Malaysia too, not only in Singapore.
Dennis Wee Group had exclusive rights to sell these in Singapore and was entitled to commission from the developers of about 10 per cent of the units sold. Annual returns of up to 12 percent during the first three years were promised to investors, in addition a buyback of the initial investment by the developer plus between 9 percent and 20 percent on top.
“To date, the investors have not been paid the remaining guaranteed annual monthly returns and the capital uplift on the purchase price that they were promised,” said CEA in a press statement.
It added that throughout the property marketing process, the agency “… did not provide the investors with a written advisory message, stating that they must conduct due diligence, drawing their attention that risks are involved for foreign property consumers, and that the transaction is subject to foreign laws and to any changes in policies and rules in the U.K.”.
Don’t believe everything you read. Yesterday evening I exchanged messages with one of my U.K. contacts who confirmed that one set of Singapore investors is in the process of signing an agreement imminently that would see repayment of their investment in this case.
Will the high-profile agency that sold this investment in Thailand be similar charged and banned? That’s extremely unlikely in my opinion. But Thailand does need something similar to Singapore’s CEA – otherwise the only losers will be property investors.