Case Studies
CEA's First Letter of Censure Case
23 December 2022
This case study details the first Letter of Censure case issued by CEA.
December 2022 - 4 min read
Under the Letter of Censure (LOC) Disciplinary Regime, the Council for Estate Agencies (CEA) can issue LOCs and impose financial penalties of up to $5,000 per case against errant real estate salespersons (RESs) and estate agents (EAs) for minor disciplinary breaches.
The LOC disciplinary regime is one of the key amendments under the Estate Agents (Amendment) Act 2020, which was operationalised on 30 July 2021.
Kareen Lim Kay-Yin, a RES with ERA Realty Network, was engaged by a seller to market and sell a three-room Housing & Development Board (HDB) flat located in Ang Mo Kio. Via WhatsApp, Lim informed the seller that the flat was 75sqm.
Lim, however, had not seen the property in person at that point, and had assumed that the flat was similar in size to the majority of three-room HDB flats in Ang Mo Kio, which were 75sqm – a data point she obtained from property portal SRX. At no point did Lim verify the actual floor area and she proceeded to market the property as a 75sqm unit.
Eventually, an offer was made, and the property was sold based on the floor area of 75sqm. However, it came to light that the floor area of the property was 89sqm – significantly different from the 75sqm that Lim had advertised.
The property’s size is an important consideration for a seller when deciding the asking price for the property. By not verifying the actual floor area of the property before informing her client and marketing the property, Lim failed to conduct her work with due diligence and care.
She was issued a Letter of Censure for a breach of paragraph 5(1) of the Code of Ethics and Professional Client Care, in the First Schedule of the Estate Agents (Estate Agency Work) Regulations 2010.
Industry Perspective
By Adam Wang
President, Singapore Estate Agents Association
It is common for salespersons to refer to HDB Infoweb or property portals to review recent transactions. Sometimes these listings state flat types, sizes, floor ranges and prices, but such data may not necessarily reflect the actual properties salespersons are appointed to market.
Although Lim was uncertain of the exact floor size during the viewing, she went ahead to advertise the unit as 75sqm and the property was sold based on this inaccurate floor size. In fact, she had sufficient time, between the date of her appointment as a salesperson by her client and the date the flat was sold, to verify the actual floor size of the property.
The Professional Service Manual clearly states that it is the salespersons’ duty to verify information via reliable sources. One way to obtain property information would be to purchase it online via SLA INLIS. The information on INLIS includes the property’s address, size, lease commencement date, any encroachment and the owner’s details.
More information can be found from section 1.7.3 of the Professional Services Manual.
In this case, though the salesperson was issued a Letter of Censure and did not have to go before the Disciplinary Committee, this breach of the CEPCC should not be taken lightly as providing inaccurate floor size to the seller may misguide the seller into making an incorrect decision on the selling price.
It is important for salespersons to be familiar with the legislation, regulations, practice guidelines and circulars of CEA, and be reminded of the dos and don’ts and best practices to render professional, conscientious service to their clients. Salespersons should always act with honesty, fidelity and integrity so as not to bring discredit and disrepute to the industry.
Information accurate as at 23 Dec 2022