A HIGH Court judge yesterday criticised the unethical behaviour of two
ERA Realty Network agents and ordered the return of $257,000 to a couple
who used the agency to sell their apartment.
Mr Yuen Chow Hin, an IT company vice-president, and his wife, Madam Wong
Wai Fan, a housewife, had let go of their two-bedroom downtown flat at
$688,000. They took their ERA agent's word that this was the best price
they could get.
What they did not know was that the buyer of their Riverside Piazza unit
was the wife of their agent's boss, and that she re-sold it almost
immediately for $945,000, making a hefty profit.
Yesterday, Justice Choo Han Teck ruled in favour of the Yuens, who had
sued ERA for the 'secret profit' made in the second deal.
Justice Choo found that the conduct of agent Jeremy Ang and his boss, Mr
Mike Parikh, senior group division director at ERA, amounted to breach
of duty and fraud.
He also had a stern reminder for the industry of its ethical
responsibilities, as it had emerged in court that such practices were
common.
The judge concluded that it was Mr Parikh who wanted to buy the flat in order to make a quick profit during the property boom.
To distance himself from the deal, he used his wife, Madam Natassha
Sadiq, as the buyer and Mr Ang as the seller's agent, the judge found.
Mr Ang was the link but Mr Parikh was the person behind the scheme, and
his position made his subordinate's breach of contract even more
reprehensible.
The misconduct was of such magnitude that the judge said he felt bound
to make the reasons clear in his judgment so that no property agent
could now claim ignorance.
When a property agent is engaged to sell or buy property, he has a
responsibility to act in the interests of the person who appointed him -
not his own, or his friends', or his relatives' or his boss', said the
judge.
'This responsibility that the agent bears is the foundation of the
ethical rules and contractual principles that prohibit an agent from
acting in conflict of interests and reaping secret profits for himself
or his friends.'
Madam Sadiq was a party to the plan carried out by her husband and Mr Ang.
'The result of the concerted efforts of Jeremy, Mike and Natassha
resulted in the plaintiffs selling their flat for less than what they
might have had they been properly and honestly advised,' said the judge.
Justice Choo rejected the testimony
of ERA's top brass - president Jack Chua and senior vice-president
Marcus Chu - that the two men had done nothing wrong.
The judge said it was clear why they thought so - Mr Chu admitted in
court that he and others in the company, as well as agents in other
companies, had done the same thing.
Dennis' comments:
this is really shocking!!! No wonder the Public have such Bad
impression of Property Agents in general.... if you earn commission from
clients, you Ought to take care of clients' interest, it is Unethical,
Unbelieveable and Unacceptable to do anything against Clients'
interest....
Real estate transactions involved
billions of dollars each year. It is a "joke" that Property Agents are
NOT regulated in Singapore and not required to be properly licenced when
even Taxi Drivers need to pass through standard tests and be properly
licenced.
It is time for the Singapore
government to take a good look at the Property sector and implement
proper licencing and regulations on Property Agents operating in
Singapore
Justice Choo also rejected arguments by ERA that it was not liable for
the actions of its agents, who are 'independent contractors'.
The option form had ERA's logo printed on it; the commission agreement
was between Madam Wong and ERA; and the newspaper advertisements sought
to persuade the public that they would have the backing of the company
and its network by engaging an ERA agent.
It was also ERA - not Mr Ang - which took the couple to the Small Claims
Tribunal when they refused to pay the commission on the sale.
Yesterday, a relieved Madam Wong said: 'Naturally, I'm very happy. I respect the decision of the court.'
In a statement, ERA president Jack Chua said: 'ERA intends to appeal the
court decision that finds our company liable as we did not benefit from
the transaction.'
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