JAN / FEB 2016

Salesperson disciplined for providing misleading information on use of property

Doreen Lim Yinfeng, then a registered salesperson with Propnex Realty Pte Ltd, was sentenced to a five month suspension (from 5 September 2015 to 4 February 2016) and faced a financial penalty of $4,500 for advertising a property for commercial use when it was zoned for residential use only, and for failing to take reasonable care when preparing a Letter of Intent (LOI) for the tenant and her landlord client to sign.

In August 2011, Lim was engaged by her landlord client to sell and/or lease the property. Despite knowing that it was zoned for residential use only, Lim put up newspaper advertisements for the sale and lease of the property stating that it was for commercial use. The tenant, a health fitness centre owner, was interested to operate a health fitness centre at the premises after viewing the property. Lim then prepared and presented, among others, a LOI for the tenant and her landlord client to sign that reflected the premises may be used for commercial/industrial purposes. The tenant and the landlord eventually signed the tenancy agreement to lease the property for 36 months from 15 March 2012 at a monthly rental of $7,500. As a result of the tenant's lease of the property to operate the health fitness centre, renovation expenses amounting to more than $65,000 were incurred before business could commence on the premises.

Lim's case came to light when an officer from the Urban Redevelopment Authority (URA) inspected the premises in June 2012 and notified the tenant and the landlord in July 2012, that the property was only for residential use. When the tenant sought Lim's advice on how the health fitness centre could remain at the property, she advised the tenant to apply for a Home Office Licence which was obtained. But URA subsequently informed the tenant that the health fitness centre business was not allowed to operate under the Home Office Scheme. The tenant therefore had no choice but to move out of the property and bear the financial loss, and to find an alternative location to run its health fitness centre.

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