Today the first prosecution case has been brought against a person for unlicensed selling of properties. The practice of property seminars selling properties have been plentiful especially after the property curbs. The question is why it took them so long to clamp down on this practice.
According to CEA:
The Council for Estate Agencies (CEA) charged Tan Yang Po (50 years old, Singaporean female) trading as AZEA Personal Coaching (“APC”) in Court today for allegedly acting as an estate agent without being licensed with CEA. This is the first prosecution case related to unlicensed estate agency work for the sale of foreign properties.
[Free Ebook] How should you invest your first $20,000?
We asked 14 Singapore finance bloggers to share what they would do if they could go back in time and invest their first $20,000. They can no longer rewind time, but you can learn from their experience and hopefully start with a better footing.
Under the Estate Agents Act, an estate agent must be licensed with CEA before it can market local or foreign properties in Singapore. Tan, trading as APC, faces five charges for acting as an estate agent without being licensed as an estate agent.
How They Operate
The modus operandi is generally the same among most of the property seminars. Attend a preview for free, pay a significant amount for 1 to 2 day course and then probably pay again to join their investment club. After which, the speaker will introduce so called hot deals that cannot be found outside in the market with high returns, sometimes guaranteed. In this case, it was a company called Sterling Camden selling apartments in Texas with guaranteed returns of 8% plus net rental yield over 2 years.
The Danger of Investing In Unlicensed Foreign Properties
We always believe that there is no such thing as risk free high guaranteed returns. In fact, when you hear such words, you should probably stay far away from such investments. When dealing with foreign property investments, you already have to deal with exchange rate risks, interest rate risks as well as regulatory risks. This is further compounded by the fact that the introducer is unlicensed, so there is no one to go after if the investment fails. As compared to an established agency, they do have a reputation to protect, so they are likely to be more careful in selecting investments.
A quick search on Sterling Camden LLC reveals that they do not even have a proper website, which is unlikely for an established developer. Further search reveals that this company has only been incorporated in 2011. Now would you park your money with an overseas developer who has no presence whatsoever and track record to speak of?
We all the know the importance of investing, but at the same time we should be cautious as well especially if it involves large sums of money. Money once lost can be difficult to make back especially for retirees or near retirees. Again, it is best to stay away from such property schemes. This is the first case and probably won’t be the last. The government usually takes a long time to build up a case before taking action, but by then many people would already have fallen victim. So invest smart and don’t be one of them.
About the Author
Calvin Yeo, CFA, CFP is the Managing Director of Doctor Wealth Pte Ltd (www.drwealth.com), which is is revolutionizing the financial advisory industry by building an online platform to provide high quality and comprehensive financial advice.
For further information, you may be interested in: