Archive for the ‘Legal issues’ Category
Condo ads – caveat emptor
Leave a CommentPROPERTY developers, by virtue of their particular trade, have a habit of getting creative in marketing campaigns. In recent, fairly typical instances, two property companies advertised projects as being near unconfirmed locations of future MRT stations. The real estate business knows private property by train stations is highly valued, even if buyers are car owners. Being flexible with the truth in advertising has no place in an industry that meets a prime social goal besides being a plank of the economy.
Following a report carried in this newspaper, the two firms stopped using misleading transport information as a selling point. This is all to the good, particularly after a Land Transport Authority (LTA) spokesman dismissed the advertised claims as ‘wild guesses’. Putting out unconfirmed MRT site information is not the only ploy resorted to. It has become a common – and even acceptable – industry practice for advertised properties to be depicted as being ensconced in verdant greenery when in reality, the ‘greenery’ is man-made infrastructure such as busy thoroughfares and tall buildings. Schematic diagrams frequently show schools, shopping malls, eating places and other amenities to be closer than they are. ‘Walking distance’ and ‘minutes away’ are relative, so advertisers get away with it.
It is easy to explain why home buyers can be taken in by hype and misrepresentation. In the first half of the year, more than 7,000 privates home were sold, exceeding the 4,264 units sold last year. Lower interest rates, improving consumer sentiment and the fear of being priced out are feeding the froth.
The onus is on buyers to do their homework. This should exceed what is promised in ads, scale models and dressed-up showflats. In the case of proposed MRT locations, buyers should check or verify the information on LTA’s website and published media sources. Better still, do a reconnaissance of the property itself.
The buyer naivete shown underscores an oddity of the national psyche. Singaporeans have implicit trust in the integrity of the authorities (and rightly so). By extension, they tend to be fairly trusting of big commercial entities – banks, airlines, developers being examples. They accept sales information at face value. Property buyers who do not make thorough checks get what they deserve. The worst kind of information one is bombarded with is not brazen untruths, but untruths cloaked in a modicum of truth. If developers pull this stunt, the operative phrase for buyers is caveat emptor.
Source: Straits Times, 15 Aug 2009
Three of the feuding families have moved out
THREE of the original seven feuding families on the now infamous Everitt Road have moved out and since then life has been more peaceful.
The Chan family at 130B, who are at the centre of the dispute, says that calm has returned somewhat.
‘It’s quiet. They dare not rebut or gang up any more,’ said Madam Chua Gek Eng, 71, the mother of Dr Chan Soo Yin, 47.
In the past three years, their immediate neighbours – the Tan family and the Chua family – sold their houses, citing harassment as the reason.
The Gan family, right across from the Chans at 136C, have relocated to Shanghai.
Those left are the other Chua family in 136L, the Loh family in 136B, the Ee family in 136F and Gan’s parents in 136E.
But some of them contend the angst is far from over.
Mr Loh Ah Wee, 74, said that the shouting has not stopped.
‘They don’t dare throw things at us any more,’ he said in Mandarin. ‘But they still curse us when we walk past their house. I still sneak out of my back door to avoid them.’
‘It’s been so long, we are used to it. They will never change,’ he added, sighing.
Another family member, who did not want to be named, said that the Chans still hurl abuse at their children, calling them things like bastard son.
‘They also taunt us with bags full of something or other, as if to throw them at us. But we just ignore them,’ he said.
A Straits Times check found that the Chans’ bright spotlights – a bone of contention with neighbours because they were sometimes left on all night – are still there.
Also yesterday, Dr Chan was seen rushing out of her house with a knotted-up plastic bag full of a brown substance as her neighbour’s van drove past.
She dropped the bag on the side of the road when she realised she had been spotted.
When asked if it was true that verbal abuse still went on, she screamed, referring to a particular neighbour: ‘She shouted vulgarities at us and now she wants to turn things on us. This is really rich coming from her.’
Mr Chris Koh, a director at Dennis Wee Properties, said the coverage that the area has received due to the feuding residents cannot be good for property prices there.
The Straits Times understands that the former neighbours sold their properties for between $1million and $1.4 million.
‘This kind of negative publicity definitely has an effect. Some people will be wary of buying a property there for sure,’ Mr Koh said.
However, he added that the value would depreciate only slightly. ‘People buy property based on land value. They will consider neighbours as a factor, but in the end if the price is right, it will go.’
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About the spat
1993: The Everitt Road dispute reportedly started over parking space, and escalated into a tit-for-tat war involving chains, video cameras and allegations of abuse on both sides.
2002: The quarrel drew media notice when seven families sought help from MP Chan Soo Sen.
But mediation efforts failed to resolve the conflict.
The escalating quarrels drew wide interest, with the neighbourhood attracting curious observers from outside the area.
A slew of police reports and court complaints followed.
2004: In July, Mr Chan Cheng Khoon was fined $4,000 for insulting Madam Teo Suan Moy and another neighbour, Ms Bency Chua.
2005: In November, Mr Chan was again fined for insulting another neighbour.
2006: In February, MrChan was fined the maximum $2,000 for harassing Mr Loh Beng Lee, who lived diagonally across from his house.
His 47-year-old daughter, Dr Chan Soo Yin, was fined $2,000 in January for insulting a neighbour.
2009: Dr Chan said she filed 25 magistrates’ complaints against various neighbours between
She added the others were either resolved, settled or dismissed.
Source: Straits Times, 15 Aug 2009
Everitt Road spat: Fine set aside
Both parties in dispute claim victory of sorts after court ruling
A NEIGHBOURHOOD feud that has been festering in Everitt Road for 16 years had a High Court conclusion yesterday that could finally draw a line under their increasingly bitter dispute.
The conflict, which has also involved several other people, dozens of legal complaints and several court appearances, has blighted life in the Joo Chiat street since 1993.
Even the outcome of yesterday’s court case was disputed, with two women claiming to have won a victory of sorts.
Madam Tan Bee Hua had been fined $500 in April for hurling vulgarities at Dr Chan Soo Yin, but had the penalty set aside yesterday on condition that she keeps a clean record for the next 12months.
Madam Tan, 51, was given a conditional discharge – a rare move by the High Court – after arguing that she was provoked and the offence was minor.
Her lawyer Ram Goswami also told the appeal hearing before Justice Choo Han Teck that she was unlikely to repeat the offence.
Madam Tan had been convicted and fined by a magistrate’s court in April for hurling vulgarities at Dr Chan in Everitt Road at about 11pm in August 2003.
At the time, she was living in nearby Teng Tong Road and had cycled to Dr Chan’s house.
Dr Chan had cross-appealed and argued in person yesterday for a heavier deterrent fine against Madam Tan, but left empty-handed after Justice Choo threw out her suit.
Yet Dr Chan, who is an educator, said she was happy with the appeal outcome, noting that the complaints against Madam Tan and the others who hired lawyers would have cost them legal fees several times the fine payable.
Madam Tan, a businesswoman, said she fought the case all the way to the High Court ‘to protect her dignity’ and received support from friends for her legal fees. ‘I feel very happy and relaxed today,’ said the single mother of three, who added that the ongoing feud had led to bouts of depression and many sleepless nights.
Yesterday’s case marked the end of a slew of disputes that started in 1993 and eventually led the Chans to lodge about 25 complaints against various neighbours, including the Loh, Chua and Gan families.
The Chan family consists of retiree Chan Cheng Khoon, 74; his wife Chua Gek Eng, 71; and their daughter, educator Chan Soo Yin, 47.
Seven families have been engaged in a long-running conflict with the Chans which has drawn widespread media attention over the years. Three of the families have since moved out.
The dispute began over a parking space but soon escalated into a tit-for-tat turf war involving chains, video cameras and allegations of abuse on both sides.
The spats are believed to have been one factor in the establishment of the neighbourhood courts scheme set up last year to sort out rows, with Justices of the Peace presiding.
Dr Chan said she filed 25 magistrate’s complaints against her neighbours between 2005 and 2006, but only one was successful. That was the subject of yesterday’s appeal.
She filed six complaints against Madam Tan and others against the Gans, the Lohs and the Chuas. All were either resolved though mediation or settled.
Dr Chan and her father were also the subject of complaints and were hauled to court a number of times between 2004 and 2006 for insulting and harassing their neighbours.
Mr Chan was fined three times and Dr Chan once – racking up total fines of $10,000.
However. she was far from dispirited after yesterday’s setback: ‘The experience has been a wonderful learning journey. I can now actually give advice on what to do in neighbourhood quarrels.’
Madam Tan, meanwhile, has moved. She left the area in May 2006 to get ‘peace of mind’ and now lives in Balestier Road.
Source: Straits Times, 15 Aug 2009
Cheated of property and $1.2m
Brothers’ signatures were forged; court deletes rogue lawyer’s name from title deed after 5-year battle
CHEATED of their property when their lawyer forged their signatures to seize ownership, three brothers had to come up with another $700,000 to prevent the bank from selling off the building.
Yesterday, their five-year-long plight finally ended when the High Court ordered the rogue lawyer’s name to be removed from the property title deed and replaced by their names instead.
The brothers, Mr Sim Chiang Lee, Mr Sim Sien Tong and Mr Sim Ah Ban, now in their 50s and 60s, were partners and shareholders in a family business that included provisions, hardware and realty.
Their ordeal began in March 2004 when then lawyer Sivakolunthu Thirunavukarasu, now 51, forged their signatures and transferred ownership of a factory they had purchased to her name.
Among other things, Sivakolunthu drafted documents that made out that the three brothers had sold the premises in Chai Chee to her.
To cover her tracks, she included one of the brothers, Mr Sim Chiang Lee, as co-owner with her.
The forged documents stated that Sivakolunthu owned 75 per cent of the property – worth $1.4 million – while the remaining 25 per cent was supposedly in Mr Sim Chiang Lee’s name.
The lawyer then mortgaged the property to a bank for a $700,000 loan by forging Mr Sim Chiang Lee’s signature, and skipped town in May that year.
She is still on the run.
In August 2005, after her fraudulent work was uncovered, the bank acted on the mortgage default and the brothers had no option but to pay up or see the bank sell off the premises.
The bank took its case to the High Court, which confirmed it had a valid mortgage, which could be enforced.
The brothers contested the move all the way to the Court of Appeal where they lost and have yet to settle the legal costs of the move.
One small compensation was the brothers were entitled to the rent from the building, which had been leased from the time Sivakolunthu was found out. They received $226,000 in January this year.
Altogether Sivakolunthu swiped $2.4 million from more than a dozen victims in early 2004, by mortgaging four properties, but the Sim brothers suffered the most.
They lost $1.2 million as she also swiped $500,000 which they paid into the clients’ account of the law firm she worked in.
The Sim brothers, who were represented by lawyer Philip Fong of Harry Elias Partnership, were all shareholders and partners in several businesses they ran, including Sin Aik Provision Store, Sin Aik Realty and Sin Aik Hardware.
Contacted last night, Mr Sim Ah Ban expressed disappointment that Sivakolunthu remains missing and said he was in no mood to talk.
‘A loss is a loss,’ he added.
Their case was among those cited by the Law Ministry recently when it proposed new rules for the handling of money in property deals.
Under the proposals, now the subject of a public feedback exercise, lawyers will no longer be allowed to handle conveyancing monies and deposits will be placed with approved institutions.
In the past five years, five rogue lawyers have absconded with almost $20 million of their clients’ money; four are yet to be caught.
A fifth, Victor Tan, who handed himself to police in late 2007, is currently behind bars serving a 54-month sentence after being convicted of misappropriating $32,000 from a client.
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Proposed safeguards
THE Law Ministry had made several recommendations to protect monies entrusted to lawyers by buyers and sellers of properties.
On Tuesday, it proposed that all payments for property deals will, in future, be held by the Singapore Academy of Law or commercial banks, and not law firms.
The general details of how this will work were released by the Law Ministry, as it sought public feedback on a final solution to the longstanding problem of some lawyers running off with their clients’ money.
Among other proposals, the ministry suggested that the academy take over the role of the law firm in holding the deposit, which it pays out in due course. Clients do not have to deal with the academy directly. Property buyers and sellers will also not be inconvenienced.
The ministry is in talks with local banks such as UOB, OCBC and DBS to provide the service.
Source: Straits TImes, 14 Aug 2009
No more ‘future MRT stations’ in condo ads
TWO developers which included unconfirmed locations of future MRT stations in their condo advertisements have stopped using the information as a selling point.
UOL Developments has altered publicity material for its Meadows@Peirce, removing a location map that showed several MRT stations on the planned Thomson Line, which will be ready only in 2018.
Far East Organization has removed the supposed site of a future station in Marine Parade from a webpage on the Silversea condo.
The moves came after The Straits Times ran an article over the weekend on developers using unconfirmed MRT information in their sales materials.
Ms Claire Cher, spokesman for UOL Group, parent of UOL Developments, said the company realised that station sites in its Meadows@Peirce advertisements ‘have not been confirmed’.
‘We have therefore taken steps on the very day the article appeared to remove the map from all our publicity materials.
‘It was never our intention to mislead buyers,’ she said.
Ms Cher also said the company is writing to buyers to inform them of the possibly inaccurate information, but stopped short of offering them outright the option to withdraw from their purchase.
One buyer, Mr Sean Chia, 37, said ‘it is good’ that UOL has corrected the ads. But he said he did not buy a unit there because of the proposed stations, which he pointed out were ‘not near’ the development.
‘We bought because of the location – it is close to a reservoir and there is a lot of greenery around. It is also a huge plot,’ he said.
Advertising Standards Authority of Singapore chairman Eleanor Wong said developers should avoid misleading advertisements.
‘Certainly, an advertiser should never make it seem like a ‘planned’ station has already been built; or oversell the certainty of the station being built if things are still open to confirmation.’
She added that builders should also ‘be careful not to give the impression that an MRT station is nearby if it is not’.
Far East Organization spokesman Oh Thay Lee gave the assurance that the company will now use only confirmed information on MRT lines and stations in its property advertisements.
She admitted that Far East ran an advertisement on July 11 on the Silversea that had a map which indicated the location of a possible MRT station in Marine Parade.
‘Since then, we have not used this map in our print advertisements,’ she said.
Subsequent Silversea ads, however, still had the line ‘near to the future Marine Parade MRT Station’. Far East said this too will be removed.
Source: Straits Times, 13 Aug 2009
Law firms to lose right to hold property deal money
Ministry seeks feedback on proposals to protect buyers and sellers
ALL payments for property deals will in future be held by the Singapore Academy of Law (SAL) or commercial banks, and not law firms.
General details of how this will work were released by the Law Ministry yesterday as it sought public feedback on a final solution to the longstanding problem of lawyers running off with their clients’ money.
In the last five years, rogue lawyers have absconded with almost $20 million in funds meant for property transactions, and held in client accounts in law firms.
The Law Ministry’s proposals were sparked by the need to protect monies entrusted to lawyers by buyers and sellers of properties.
For instance in 2007, a 47-year-old woman who sold her property for $740,000 and hoped to use the gains of $200,000 to get out of bankruptcy, came to grief when the lawyer she hired, Zulkifli Amin, skipped town with her money.
It was part of a $6 million loot he had stolen from conveyancing transactions entrusted to him to handle.
The case showed that earlier moves to safeguard such deposit monies were inadequate.
After rogue lawyer David Rasif fled with $11 million in 2006, the rules were changed so that at least two lawyers had to sign off on cheques withdrawing more than $5,000 from clients’ accounts.
Despite this, Zulkifli still managed to disappear with $6 million in November 2007.
The Law Ministry’s recommendations will stop lawyers from handling monies meant for property deals altogether and provide for punishments if the rules are breached.
Property buyers and sellers will not be inconvenienced.
The SAL takes over the role of the law firm in holding the deposit, which it pays out in due course.
Clients do not have to deal with the academy directly.
The moves follow the recommendations of a review committee appointed by Chief Justice Chan Sek Keong and chaired by Justice V.K. Rajah last year. A team headed by Senior Counsel Wong Meng Meng then worked out the implementation.
Under the current system, a prospective buyer gives a cheque for the deposit on the transaction price to the seller’s law firm once he has exercised his option to buy. The money is kept in the client’s account for 12 to 14 weeks while lawyers work to complete the sale, and then it is released to the seller.
In future, the cheque will be replaced by a cashier’s order payable to the SAL which the buyer’s lawyer can forward directly to the academy.
The balance of the sale price will also be paid by cashier’s order – to the seller, the lawyer for his legal fees, and the property agent for his commission.
While the SAL will be the main body to hold the conveyancing deposits, the ministry is in talks with local banks such as UOB, OCBC and DBS to provide the service.
A spokesman for heavyweight firm WongPartnership said the proposed changes would have minimal impact on the conveyancing transactions of large law firms, which already have ‘stringent measures’ in place.
It should even reduce administrative work, said Ms Edna Lim, a lawyer from a small firm, Jing Quee & Chin Joo.
‘While the details have yet to be established, there would be no inconvenience if the firm’s role is to forward the cashier’s order to SAL on the client’s behalf,’ she said.
Lawyer Amolat Singh noted that the changes would be an enlargement of the SAL’s role, which now holds deposits paid by owners of new homes, worth about 5 per cent, to guarantee against defects in construction.
The funds are released to the developer only a year after owners have taken occupancy.
A Law Society spokesman said the society would be responding to the recommendations.
The public may view further details at the Law Ministry’s website at www.minlaw.gov.sg .
Feedback may be faxed to 6332-8842 or e-mailed to MLAW_Consultation
Source: Straits Times, 12 Aug 2009
Lawyers may stop holding conveyancing monies
Govt suggests that such funds be held by Law Academy or banks
LAWYERS may soon be prohibited from holding conveyancing monies if a new proposal by the Ministry of Law goes through.
This follows the infamous case of lawyer David Rasif running off with some $10 million of his clients’ money in 2006, as well as a string of recent cases in which lawyers absconded with clients’ conveyancing money.
Aimed at preventing lawyers from holding large sums of cash for their clients, the new move is unlikely to dampen business in this area of legal work, market watchers said.
Conveyancing money refers to money used as part of transactions for housing purchases. This includes stamp duty payment and option deposits.
A seller receives an option deposit – typically amounting to 4 or 9 per cent of the purchase price which a buyer pays – once the option to purchase is exercised.
In a public consultation paper released yesterday, the ministry has suggested having the Singapore Academy of Law as the main entity appointed to hold conveyancing money.
The option deposit can also be held by entities approved and appointed by the Ministry of Law.
The three local banks have also been engaged to look into offering services in this area.
‘We have been in discussions with the Ministry of Law on the possibility of providing the service to hold the option deposit,’ said Chow Theng Kai, head of cash management, group transaction banking, at OCBC Bank.
Lawyer Gan Hiang Chye from Rajah & Tann LLP told BT that this move would not take away any business.
‘The law firm will still be doing the administrative work for the client,’ he said, noting that the clients can use a cashier’s order to be paid to the respective parties, but this can be deposited by the law firm.
‘The legwork is still being done by the law firm for the client. The client just has to make one small visit to the bank to buy the cashier’s order.’
He added that the recent cases of lawyers absconding with clients’ money has ‘diminished’ the profession.
The proposed changes come after Chief Justice Chan Sek Keong expressed concern last year that such criminal conduct of lawyers harms not only the reputation of the legal profession, but also the victims who could not get full compensation.
This is despite tightening the Solicitors’ Accounts rules in July 2007, such that no sum exceeding $5,000 can be drawn unless two lawyers okay it.
With the amendment, a lawyer also could not receive or hold conveyancing monies unless he had at least two signatories to his client account.
A review committee chaired by Justice VK Rajah was then set up to look into making changes to the conveyancing system.
The central recommendation to prohibit lawyers from receiving such monies was made in the committee’s report.
The Chief Justice agreed with the recommendation and forwarded this to the Ministry of Law.
The proposed changes are likely to be implemented at the end of the year.
Source: Business Times, 12 Aug 2009
Grangeford owner seeks time to remove partitions
When contacted, the Urban Redevelopment Authority (URA) would not say if the request would be approved.
Ideal’s tenancy agreement was also terminated by Cove.
Several tenants claimed their leases with Ideal were still in force and refused to go.
Couple sue over reverse mortgage
Damages sought from NTUC Income over alleged contract breach
REVERSE mortgages – launched with much fanfare over a decade ago to help retirees unlock the cash value of their homes – will, for the first time, be at the centre of an upcoming court case.
Mr Derek Chua, 72, and his wife Madam Colleen Ng, 57, have filed a suit against insurer NTUC Income after their reverse mortgage turned sour.
In the writ of summons obtained by The Straits Times, the couple claim that the reverse mortgage scheme entitled Mr Chua to live in the property until he died or sold the property.
They also claim that Income was not entitled to force them to repay the loan if the loan exceeded 80 per cent of their property’s market value.
When the reverse mortgage scheme was launched in 1997, it was seen by the Government as a way for the elderly to get some income from their homes without having to move out.
It offered an income stream for cash-poor but asset-rich retirees. They could use their homes as security for a loan that would be dispensed in monthly cash payouts.
Under the scheme, the lender would usually recover the cash it had paid out through the sale of the property after the borrowers had died. Any surplus would go to the estate.
Mr Chua and his wife signed up.
The property, which they bought in 1975, was valued at $2.1million in 1997. This allowed Income to lend them up to 80per cent of the valuation or about $1.68million.
Income also settled an outstanding overdraft of $495,000 that the couple had taken out from a bank using the house as collateral.
Income paid out $2,000 a month.
But things went wrong for the couple when property prices crashed after the Sars crisis in 2003. Their home’s valuation virtually halved to $1.1million in 2004 and they were told by Income that the loan was reaching its 80per cent limit. As a result, the couple’s monthly payouts were cut successively from $2,000 in 2004 to $300 by 2006.
In June 2006, the couple were told that their loan amount had exceeded 80per cent of their property’s market value at the time. The monthly payouts stopped the following month.
By then, the couple owed Income almost $1.05million – comprising the $495,000 to clear their overdraft, plus the monthly payouts and the compounded interest on these payouts.
It became necessary to sell the property to recover the sum.
According to the couple, Income found a buyer who paid $1.05million in November 2006, but there was still a shortfall of almost $55,000, which the couple were to pay off in monthly instalments over the next 10 years.
The couple started making these payments and kept them up until recently when they decided to take legal action.
Mr Chua, a retired flight engineer, and his wife, a housewife, who now rent an HDB flat, will be represented by Senior Counsel Michael Khoo. The appointment of a lawyer was made by the director of the Legal Aid Bureau, after the couple passed a means test.
Mr Khoo said the case was ‘the first of its kind’, and declined further comment as the suit has been filed.
In the writ, the couple are seeking damages for an alleged breach of contract to be assessed, and costs.
Both Income and OCBC Bank – the only other institution to offer reverse mortgages – stopped offering such loans last year as their take-up was not high. Income has issued 500 such loans since 1997 but only 134 remain active.
Property consultant Nicholas Mak, former head of research at Knight Frank, said it was not surprising that the scheme fizzled out as its success relied on ‘many factors, including the size of the market and its culture’.
A recent HDB initiative called the lease buyback scheme has broadly replaced the reverse mortgage, he said.
But this is available only to elderly folk who live in three-room or smaller flats. It monetises their flats to create annuities.
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NTUC: We have been more than reasonable
NTUC Income said it empathises with Mr Derek Chua and Madam Colleen Ng, but believes it has acted more than reasonably to assist them.
Income’s chief financial officer Jeffrey Lee told The Straits Times that before signing the deal, the couple were ‘advised by lawyers on all the terms and conditions of the reverse mortgage’.
Under a reverse mortgage, the maximum that Income would lend to a borrower is capped at 80 per cent of the prevailing value of the property. When the ratio reaches or exceeds 80 per cent, it indicates that the maximum loan limit has been reached and steps would have to be taken to recover the loan in accordance with the terms of the reverse mortgage.
During a review in 2004, Income found the ratio of the loan to the home’s valuation had exceeded the upper limit of 80 per cent, said Mr Lee.
Income’s managers met the couple to discuss their options, which included transferring the loan to another family member and renting out rooms for income. The borrowers considered, and elected to sell their property, he added.
Income also said it did not insist that the property be sold immediately, and it gave a grace period of more than two years. It also gave the couple a 10-year loan, at their request, to repay the shortfall, starting in July 2007.
‘NTUC Income has been more than reasonable in trying to assist the borrowers throughout the years,’ it said.
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Under the reverse mortgage scheme, the lender would usually recover the cash it had paid out through the sale of the property after the borrowers had died. Any surplus would go to the estate.
Source: Straits Times, 28 July 2009
Couple sue NTUC Income over reverse mortgage deal gone sour
(SINGAPORE) A couple are suing NTUC Income – in what is seen as a test case – over a reverse mortgage deal in which their property was sold amidst falling property prices.
Derek Chua, who is in his 70s and his wife Colleen Ng, who is in her late 50s, claim they lost their matrimonial home at Upper Serangoon in 2006.
NTUC Income demanded repayment of a loan procured in 1997 under a reverse mortgage, and the couple claim they had to sell their home to repay it, according to a writ of summons filed earlier this month and seen by BT.
The company’s chief financial officer Jeffrey Lee said in an emailed statement that NTUC Income had been ‘more than reasonable’ in trying to help the borrowers and that the couple had been advised on the terms of the deal.
The couple claimed that the 1997 reverse mortgage valued their house at $2.1 million, and based on a loan to valuation ratio of at most 80 per cent, they were given $495,000 cash to pay off their previous mortgage and payments of up to $2,000 a month.
In May 2004, the couple were told the value of their house had dropped to $1.1 million and they were in breach of the 80 per cent loan to valuation limit, based on the outstanding loan amount of $926,000.
According to the couple, they were told to top up $46,400 to bring the ratio down to the 80 per cent limit, and their monthly payments of $2,000 were reduced in steps to $1,500 from October that year.
A year later, in October 2005, NTUC Income said the outstanding loan, at $1.014 million, exceeded the 80 per cent limit based on the property value of $1.15 million. The couple were told they would get just $300 a month until June 2006, after which the company would ‘exercise (its) right to recall the property for auction sale’. The couple could also procure a buyer on their own or find another place to stay, according to a letter from NTUC Income, the couple said.
By then, the couple owed $1,045,802.91. On June 30, solicitors for NTUC Income sent the couple a letter demanding repayment or else face legal proceedings
The couple handed over possession of their property on Aug 31, according to their writ.
The property was later sold for just over $1 million, leaving an alleged shortfall of about $55,000, which the couple were asked to pay.
They claim that if not for NTUC Income’s letter, they would not have sold the property – which in 2008 was again sold for about $1.5 million, the writ says.
NTUC Income has yet to file its defence.
The couple have engaged senior counsel Michael Khoo through legal aid. NTUC Income is represented by Rodyk & Davidson.
Source: Business Times, 28 July 2009
