SINGAPORE - Real estate agency HSR International Realtors (HSR) have been fined $74,000 by the disciplinary committee of the Council of Estate Agencies' (CEA) over the failed en bloc sale of the Thomson View condominium.
The agency was also ordered not to undertake any collective sale work for a year, beginning April 20, 2016.
In a statement on Tuesday (May 17), CEA said that HSR had been penalised for "continuing to act on behalf of a client, where to do so would place their interests in potential conflict with those of the client, without declaring so in writing to the client."
In September 2010, HSR had been appointed as the marketing agent by the Thomson View condominium's collective sale committee. A tender was eventually launched in October 2011, and was awarded to Wee Hur-Lucrum for $590 million in September 2012.
However, the sale was halted in the same month when 13 owners filed objections. According to The Straits Times, a key issue was the sale price, which they said was too low due to the condo's proximity to the future Thomson MRT line.
The case was then brought to the High Court, where it emerged that HSR had offered incentive payments to four out of eight subsidiary proprietors to sign the collective sale agreement.
For instance, one of the subsidiary proprietors was offered the reimbursement of his wife's business class return air ticket from Europe to Singapore, so that she could have signed the collective sale agreement.
While the High Court found that the collective sale committee had not acted in bad faith, it ruled that HSR had breached its duty as an advisor by offering the incentive payments.
The incentive payments represented a conflict of interest on the part of HSR, as it placed its own interest of collecting the commission, and the interests of the four subsidiary proprietors, ahead of the interests of the other homeowners.
The collective sale was halted by the High Court.
CEA said that its investigations revealed that the lead property agent of HSR's sales investment team had received approval from the agency to offer the incentive payment.
Although disciplinary action was also initiated against the agent, he died before the disciplinary proceedings could be completed.