Unlicensed Property Agency & director fined $215k for selling 3 properties
21 December 2016 - A Singapore company and its sole director were convicted in Court today for conducting unlicensed estate agency work without being licensed by the Council for Estate Agencies (CEA). Franks Property Pte Ltd was fined $115,000. Its sole director, Lim Koon Heng, 70, was fined $100,000, in default 32 weeks imprisonment. This is the largest fine ever meted out by the Court for unlicensed estate agency work.
Franks Property is a property management company that is not a licensed estate agent with the CEA. Lim is the sole director and shareholder of Franks Property.
Under the Estate Agents Act(Cap. 95A), an officer of a company may be guilty of the same offence committed by the company if the offence was committed with the officer’s consent. The offences were committed by Franks Property with Lim’s consent. Accordingly, the Court sentenced Lim and Franks Property on three charges each arising from three sale and purchase property transactions. Lim and Franks Property also faced six other charges each that were taken into consideration for the purpose of sentencing.
The total commission involved for the three proceeded charges alone was $94,976.64. This is the highest amount of commission collected among the unlicensed estate agency work cases that the CEA has prosecuted.
CEA’s charges against Lim Koon Heng and Franks Property
Lim and Franks Property were convicted and sentenced for a total of six charges arising from three sale and purchase transactions under Section 28(1)(b) of the Estate Agents Act (Cap. 95A), for acting as an estate agent without first being licensed as an estate agent by the CEA. The three transactions are listed below.
Residential home at Vanda Drive
In or around 2012, Lim facilitated a sale and purchase transaction for a property in Vanda Drive. The transaction was completed on or around 30 June 2013 at the sum of $8.02 million. Franks Property received a co-broke commission of $37,476.64 from the seller’s real estate agency.
Shophouse at Smith Street
In or around early 2013, the then-owner of a property at Smith Street engaged Franks Property to find a buyer. The owner agreed to pay Franks Property a commission fee of 1 per cent of the sale price if the property was sold. Lim found a prospective buyer who agreed to buy the property at the sum of $7.5 million. Franks Property was later paid a co-broke commission of $37,500.
Smith Street is a small street running through the heart of the Chinatown district in Singapore.
Unit in Far East Shopping Centre
In or around August 2013, the then-owners of a property in Far East Shopping Centre engaged Franks Property to sell their unit. They were looking to sell the property for $1 million and told Lim that Franks Property would receive the amount in excess of $1 million as commission. Lim found a prospective buyer and the property was sold at $1.02 million. The sellers paid a commission of $20,000 to Franks Property. Lim received $18,000 from the transaction.
In all three transactions, Lim had signed off as Director of Franks Property on the invoices issued for the commission fees.
Prior to the CEA’s formation, Lim and/or Franks Property had held a House Agent Licence issued by the Inland Revenue Authority of Singapore. After the CEA was formed in October 2010, all property agencies and agents are required to be licensed and registered with the CEA before they can carry out estate agency work. Lim and Franks Property did not do so.
The punishment for each offence under Section 28(1)(b) of the Estate Agents Act is a fine not exceeding $75,000 or imprisonment for a term not exceeding three years or both. In the case of a continuing offence, there may be a further fine not exceeding $7,500 for every day or part thereof during which the offence continues after conviction.
1 Under the Estate Agents Act (Cap. 95A), “estate agents” refer to estate agency businesses (sole-proprietors, partnerships, and companies) or individuals who do estate agency work. Estate agency businesses are commonly known as property agencies. “Salespersons” refer to individuals who perform estate agency work. They are commonly known as property agents.