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CEA’s Disciplinary Committee imposes financial penalty and licensing condition on property agency

In 2014, two investors each purchased a unit in the Manhattan Park Peninsular project in Bangkok, Thailand, through HSR International Realtors Pte Ltd. They each paid 30 per cent of the purchase price to the developer.

Before the execution of the Sale and Purchase agreements, HSR’s property agents were required to, but did not, provide both investors with a written advisory message stating that investors must conduct due diligence, drawing their attention that risks are involved for foreign property consumers, and that their transactions were subject to foreign laws and to any change in policies and rules in Thailand. Subsequently, the developer abandoned the project and the investors were offered units in other developments.

One investor rejected the offer as he felt that the locations of the replacement units were not ideal and he had to pay more. He was then told by the developer that if he wanted a refund of the amount paid, S$32,000, he would have to wait three to four years. He asked HSR for assistance to resolve the matter, but to no avail.

The other investor accepted the offer, but had to pay an additional $5,000 for payment of 30 per cent of the replacement unit’s purchase price.

For failing to provide a written advisory message to the two investors, CEA’s Disciplinary Committee sentenced HSR to a total financial penalty of S$12,500. The Disciplinary Committee also attached a condition to HSR’s licence to disallow it from transacting or marketing foreign properties for six months with effect from 10 September 2018.

In sentencing, the Committee took into consideration one other charge where HSR’s property agents did not explain to the first investor that the Sale and Purchase Agreement did not contain a dispute resolution mechanism or a jurisdiction for the resolution of disputes.

The full details of this case are in CEA’s media release.

Learning points

HSR was required to comply with the Practice Guidelines for Estate Agents and Salespersons Marketing Foreign Properties and the Code of Ethics and Professional Client Care under Estate Agents Act when marketing foreign properties, but they failed to do so.

The agency should have done the following:

  • Provide a written advisory message to their clients that states the following:
    • Consumers must conduct their own due diligence;
    • That risks are involved for foreign property purchases; and
    • That the transaction is subject to foreign laws and to any change in policies and rules in the country where the property is located.
  • Explain to their clients the dispute resolution mechanism that will apply in the event of a dispute pertaining to the purchase, and the jurisdiction in which the dispute will be resolved under

For consumers, find out what you should take note of for foreign property purchases.