Dec 2022 - 4 min read
In mid-2018, a seller approached registered salesperson Lim Yiew Boon David, from ERA Realty Network (“ERA”), to market her condominium unit. Lim had assisted the seller to market previous properties that she owned. Lim signed an exclusive estate agency agreement with the seller, and under the agreement, the seller agreed to pay 2% commission to Lim’s estate agent for a successful sale.
On 9 November 2018, Salesperson A contacted Lim for a viewing of the property for a potential buyer. Over text messages, Lim agreed to co-broke and share the commission he would receive from the seller with Salesperson A on a 50-50 basis but misled Salesperson A that he would only be paid 1% commission of the sale price instead of 2%.
After a viewing on 11 November 2018, the buyer and seller agreed on the price of $1.78 million. On 18 November 2018, Lim and Salesperson A signed a co-broking agreement which provided for Salesperson A’s estate agent to receive a commission of 0.5% of the sale price from Lim’s estate agent, ERA.
Salesperson A subsequently discovered that the seller actually paid 2% commission to Lim instead of 1% as he had claimed. When confronted by Salesperson A, Lim told Salesperson A that half of the 2% commission that he had received was to be paid to a “friend’s colleague” as a referral fee for referring the seller to him. Lim also told a similar story to ERA. Salesperson A was suspicious of Lim’s claim and decided to file a complaint against him with the Council for Estate Agencies (CEA).
During CEA’s investigation, Lim told CEA’s investigation officer that he had to pay half of his 2% commission to a third party (Ms B) whom he had met at a coffeeshop, for referring the seller to him. Lim also claimed that Ms B had rejected his request to pay her a smaller amount of referral fee. As Ms B was not answering his calls, he safekept her referral fee (i.e. 1% of the sale price) and would give it to her once she could be contacted.
To lend credence to his claims, Lim gave Ms B’s phone number and screenshots of call logs purportedly made by him to Ms B between 30 August 2019 and 10 September 2019 to the CEA investigation officer. The CEA investigation officer found out later that the telephone number provided by Lim did not exist.
Upon further questioning by the CEA investigation officer, Lim admitted that he had lied. Ms B was a fictitious person made up by him and he gave a false telephone number to the CEA investigation officer. His deception resulted in the CEA officer wasting time and effort trying to establish Ms B’s identity.
Lim was convicted by the State Court of an offence under section 182 of the Penal Code for providing false information to a public servant and fined $5,000. As a result of his conviction, Lim’s salesperson registration was revoked by CEA.
For Lim’s breaches of CEA’s Code of Ethics and Professional Client Care (“CEPCC”) under the First Schedule of the Estate Agents (Estate Agency Work) Regulations 2010, he was referred to CEA’s Disciplinary Committee (DC).
The DC imposed a financial penalty of $16,000 on Lim, who was not a registered salesperson at the time of sentencing, for a breach of paragraph 7(1) read with paragraph 7(2)(a) of the CEPCC, for misleading Salesperson A into believing that he was receiving a commission of only 1% of the sale price of the property from the seller. The DC took into consideration for sentencing, two other breaches of paragraph 7(1) read with paragraph 7(2)(a) of the CEPCC, for misleading Salesperson A and ERA that he had to pay half of his commission to a “friend’s colleague”. Lim was also ordered to pay fixed costs of $2,000 to CEA.
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Industry Perspective
By Winston Woon
Treasurer, Singapore Estate Agents Association
This case highlights the importance of transparency and honesty between salespersons in the course of their estate agency work.
Lim clearly violated paragraph 3.3 of the Practice Guidelines on Conduct between Salespersons (PG02/2014) when he misled and deceived Salesperson A about the amount of commission he received. Lim also made no effort to disclose the actual amount of commission he received when confronted by Salesperson A. Instead, he continued to lie to his estate agent, ERA Realty Network and the CEA investigation officer. This deceptive behaviour brings disrepute and discredit to the real estate agency industry.
When co-broking, it is important for salespersons to ensure that the terms and conditions including the co-brokerage fee are mutually agreed upon in writing prior to negotiating and entering into any property transaction. The sharing of commission between the co-broking salespersons should be clearly stated in figures or a percentage of the transaction price to avoid misunderstanding and potential disputes. There is no need to hide or falsely state the actual commission to be received from a client upon a successful transaction.
In addition, once the co-broking terms and conditions are mutually agreed upon, the details including the co-brokerage fee should be made known to all parties in the transaction by the respective salespersons. This full disclosure would minimise and avoid any future disputes that may arise between all parties to the transaction.
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Information accurate as at 15 Dec 2022