Failing to Declare a Potential Conflict of Interest and Protect Clients’ Interest – Singapore property for rent
Facts of Case
The sellers of a HDB flat engaged the Respondent on an exclusive basis to sell their
flat (‘Flat’). Singapore property for rent.
The Respondent was a mentor to his downline and roped in his downline to assist in
the marketing and advertisement of the Flat. The Flat was advertised on a ‘Buyer
only’ basis. The advertisements wrongly stated the block number as ‘260D’ when it
should have been ‘260B’.
The Complainant was a salesperson who was helping the buyers to look for a HDB
flat to purchase. However, the Complainant was obstructed from bringing the buyers
to view the Flat. The buyers then arranged themselves for a viewing of the Flat.
The viewing of the Flat by the buyers was arranged and conducted by the
Respondent and his downline. The buyers decided to purchase the Flat and made
an offer to purchase it at the price of $520,000. The sellers agreed to this price. The
downline’s services were offered to the buyers and they were invited to appoint him
as their salesperson in their purchase of the Flat. The buyers then engaged him as
their salesperson. The Respondent assisted the sellers to issue to the buyers an
option to purchase the Flat at the price of $520,000. Singapore property for rent.
The Respondent stood to receive an overrider fee of 6% of his downline’s
commission, of 1% of the price, which was payable by the buyers on completion of
the transaction. However, the Respondent did not disclose to his clients that he
would stand to receive the 6% overrider fee and proceeded to assist them with the
issue of the option to purchase to the buyers. Singapore property for rent.
Charges – Singapore property for rent
The Respondent was charged for the following offences:
For failing to declare to his clients his conflict or potential conflict of interest in
receiving the 6% overrider fee and continuing instead to assist his clients in
selling the Flat to the buyers, in contravention of paragraph 13(1) read with
paragraph 13(2)(a) of the Code of Ethics and Professional Client Care. Singapore property for rent.
For failing to protect his clients’ interest in marketing and advertising the Flat
on a ‘Buyer only’ basis, in contravention of paragraph 6(1) read with
paragraph 6(2)(a) of the Code of Ethics and Professional Client Care.Charge 3
For causing or allowing to be made advertisements which stated the wrong
block number, i.e. block ‘260D’ instead of ‘260B’, in contravention of
paragraph 12(4)(a) of the Code of Ethics and Professional Client Care. Singapore property for rent.
Following a trial, the DC found that the Respondent was guilty of the 3 charges, The
DC decided as follows:
The Respondent had failed to discharge his burden of showing due disclosure
to his clients of his interest in receiving the 6% overrider fee which was in
conflict or potential conflict with the interest of the sellers.
A financial penalty of $4,000 and suspension of 6 months was imposed. Singapore property for rent.
The only logical interpretation of the phrase ‘Buyer only’ was that
salespersons were excluded. The Respondent’s conduct in marketing and
advertising the Flat on this basis was not in the best interest of the sellers as it
could have potentially reduced the pool of potential buyers and hence the
price of the Flat.
A financial penalty of $4,000 and suspension of 6 months was imposed for
this charge. Singapore property for rent.
The Respondent has knowing allowed or caused the wrong block number to
be stated in the advertisements, which were posted by his downline. The DC
found that the advertisements stated the wrong block number to sieve out
unrepresented buyers from salespersons.
A financial penalty of $2,000 and suspension of 3 months was imposed.
The suspensions were ordered to run concurrently and fixed costs of $1,000 were
imposed upon the Respondent.
Source: CEA website