HSR fined $74,000 for offering incentive payments to four sellers.
The Council for Estate Agencies (CEA) has imposed a fine of $74,000 on HSR International Realtors, for unfairly providing incentive payments to several sellers in the failed collective sale of Thomson View condominium.
It also prohibited the property agency from brokering any en bloc deals for one year, starting from 20 April 2016.
Originally, HSR was chosen as the property’s marketing agent by the condominium’s collective sale committee in September 2010. On its advice, the committee approved a minimum reserve price of $490 million for the condominium in October of the same year.
By March 2011, the collective sale committee received 58.5 percent consent of the total share value of the condo. But after the minimum reserve price was raised to $580 million, it received the consent of 80 percent of the owners in October of the same year, allowing it to proceed with the tender.
“The first two tenders did not receive any bids, and the third tender in August 2012 attracted a bid of $590 million from a purchaser, Wee Hur-Lucrum,” said the CEA.
Eventually, the tender was awarded to the company in September 2012, and the committee applied for a collective sale order from the Strata Titles Board in October of that year.
However, the deal was halted by the Strata Titles Board in January 2013, after some owners objected to it. They argued that the sale price was too low, in light of an upcoming MRT station in the vicinity, reported Channel NewsAsia.
The parties then sought the intervention of the High Court, which eventually terminated the transaction, after it discovered that HSR gave incentive payments to four sellers.
The incentives include an additional 10 percent on the final purchase price and additional payments ranging from $85,886 to $185,000, while another seller was offered a reimbursement of his wife’s business class return air ticket from Europe to Singapore, so she could sign the collective sale agreement.
According to the High Court, HSR had breached its duty as an advisor to the collective sale committee when it offered incentive payments. This had led to a situation wherein the agency prioritised its own interest and that of the four sellers, over the interest of the other owners.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
