No handling of transaction monies
Firmly say “No” to your salesperson if he suggests helping you to pass your rental
deposit to the flat owner.
Salespersons are not allowed to handle any transaction monies. In a property lease
transaction, transaction monies include rental deposits, monthly rentals and stamp
duties. In a property sale and purchase transaction, transaction monies include
option fee, downpayment, stamp duties, deposits and sales proceeds. Valuation fees
and commissions are not transaction monies.
The ban on handling transaction monies applies to estate agency work for the buying
and selling of properties situated in Singapore and leasing of HDB properties. It is a
serious offence and the salesperson can be prosecuted in Court if he handled
transaction monies.
Case Study 1 – Consumer posted an online advertisement to look for a flat to
rent. Salesperson T contacted him and arranged to view a flat. T did not turn
up for the viewing and the viewing was conducted by the flat owner’s
salesperson.
Consumer agreed to rent the flat. He signed a Letter of Intent (LOI) prepared
by T and paid T a deposit of $1,300 and half the commission of $325 in cash.
T issued a receipt to Consumer. A few days later, Consumer signed the
tenancy agreement and further paid an advance rental of $1,300 by
transferring money to T’s bank account.
After the fund transfer, Consumer checked the CEA Public Register and found
that T was not registered with CEA. He contacted flat owner’s registered
salesperson who informed that he did not receive the LOI and deposit from T.
Consumer realised he was cheated and lodged a police report.
Learning Point:
 Ensure that the person you are dealing with is the rightful owner of the flat. Ask
for documentary proof of flat ownership e.g. Service & Conservancy charges
booklet, loan instalment payment booklet/annual loan statements which bear the
flat owner’s name.
 Ensure that the salesperson is a registered salesperson by checking his estate
agent card and his identity against the CEA Public Register at www.cea.gov.sg.
 Avoid using cash. Pay the rental deposit and rents directly to the landlord by
crossed cheque or other verifiable means.
Case Study 2 – Consumer engaged registered Salesperson A to help him find
a flat to rent. A brought him to view a HDB flat. Consumer decided to rent the
flat and the owner requested him to pay a lump sum of $10,800, equivalent to
12 months’ rent at $900 per month. Consumer paid a deposit of $900 and a
tenancy agreement was signed which was to commence in the following
month.
A few days later, the owner’s Salesperson B asked Consumer to pass some
money to the owner. Consumer then transferred $5,000 to B’s bank account.
On the following week, B informed Consumer that the owner had decided not
to rent out the flat. Consumer then asked B to refund the monies paid but B
informed Consumer that the monies had been returned to A. Consumer was
unable to find A and so lodged a report with the Police and CEA.
Learning point:
 It is preferable to pay rentals on a monthly basis rather than on a lump sum basis.
 A request to pay directly into the bank account of a third party should raise a red
flag and should be rejected if there is no valid reason for doing so.
 Always remember: Do not hand over transaction monies to salespersons or any
third party.
It is critical that you understand and control the financial aspects of your property
transaction. A property transaction goes through certain milestones and there are
expected transaction payments at different stages. If you are not familiar with any
transaction procedure or transaction monies to be paid, you should ask questions.
Your salesperson will be able to explain to you.
Estate agents and salespersons would not wish to handle or retain transaction
monies as that is not under their scope of responsibilities. They would also not want
to break the law. Therefore, be understanding if they inform you that they are not
able to help you collect, retain or pass money from one party to another.