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15-03-12, 21:57
http://www.straitstimes.com/PrimeNews/Story/STIStory_776651.html
Property agent gets flat seller into debt
Case of unscrupulous housing agent colluding with moneylenders
Published on Mar 12, 2012
By Elizabeth Soh
WHEN prison inmate Ahmad was released last November, he decided to sell his three-room flat to pay off about $15,000 in debts he had run up during his eight-year jail stint.
Instead, the 56-year-old ended up owing another $9,500, he says, after the property agent referred him to a moneylender to 'tide him over' while the home was put on the market.
Worse, after three months Mr Ahmad (not his real name) was still waiting for his flat to be sold.
His case is just one example of a problem highlighted by the Minister for National Development in his Budget speech last week. Mr Khaw Boon Wan referred to media reports about families selling their flats to pay their debts or short-term expenses, only to be taken advantage of by unscrupulous real estate agents, and pledged to flush them out.
Last year, the Council for Estate Agencies (CEA) debarred nine rogue agents who were found to be involved in unlicensed moneylending activities.
Mr Ahmad ran up his debts after borrowing from friends in jail, and through arrears and unpaid utility bills on his Housing Board flat.
When he came out of prison, he decided to trust the agent, who been recommended by another former inmate. So he took the man's suggestion that he borrow $5,000 at 10 per cent interest from a moneylender 'friend' to tide him over while the home was put on the market.
The agent assured him his flat would be sold within a month and the debt cleared quickly using the proceeds.
Instead, over the next three months, only one prospective buyer was taken to view the property, and panicked phone calls to the agent went unanswered.
'I wanted to start over, quickly sell my house, clear my debts, downgrade, stay with my wife,' said the former mechanic. 'Instead, I ended up owing even more.'
In desperation, Mr Ahmad contacted another agent, Mr Hafeez Daniel, for help and a buyer was found within 48 hours. With Mr Hafeez's help, he has since lodged a report with the CEA.
'He claimed he was helping me, so I trusted him, but he made me sign some lawyer's documents I didn't understand, encouraged me to borrow money, and then didn't sell my house, resulting in me owing more and more interest every month,' said Mr Ahmad, who is unemployed and has only vocational education.
He is now living in Batam, Indonesia, while waiting for his application for a studio flat here to be approved.
However, his woes are far from over. He found out that the lawyer's documents he signed authorised the law firm to collect the cheque for the proceeds from the sale of the flat. It can then deduct the debts owed, as well as lawyers' fees of $1,600 and another 7 per cent for tax.
'I really hope there is enough after that to pay for my studio flat. If not, I might not be able to stay in Singapore any more,' said Mr Ahmad.
A spokesman for the CEA confirmed it was investigating a number of cases of salesmen referring clients to moneylenders, based on feedback and complaints.
'We are working with the relevant agencies such as the police and HDB in our investigations,' he said.
By law, agents are not allowed to introduce or recommend clients to moneylenders. If found guilty, they can be jailed for up to a year and fined up to $25,000.
Real estate veterans said the issue of agents colluding with lenders is not new, but is becoming more common as more families fall prey to gambling debt.
'The problem became rampant after the casinos. I started seeing at least two to three cases a month of families looking to sell their homes after racking up casino debts,' said Mr Vincent Wong, key executive officer of Crest One Realty.
He said that in the past year, two of his clients had discharged him, saying they owed money to lenders who wanted them to use a particular agent.
[email protected]
Property agent gets flat seller into debt
Case of unscrupulous housing agent colluding with moneylenders
Published on Mar 12, 2012
By Elizabeth Soh
WHEN prison inmate Ahmad was released last November, he decided to sell his three-room flat to pay off about $15,000 in debts he had run up during his eight-year jail stint.
Instead, the 56-year-old ended up owing another $9,500, he says, after the property agent referred him to a moneylender to 'tide him over' while the home was put on the market.
Worse, after three months Mr Ahmad (not his real name) was still waiting for his flat to be sold.
His case is just one example of a problem highlighted by the Minister for National Development in his Budget speech last week. Mr Khaw Boon Wan referred to media reports about families selling their flats to pay their debts or short-term expenses, only to be taken advantage of by unscrupulous real estate agents, and pledged to flush them out.
Last year, the Council for Estate Agencies (CEA) debarred nine rogue agents who were found to be involved in unlicensed moneylending activities.
Mr Ahmad ran up his debts after borrowing from friends in jail, and through arrears and unpaid utility bills on his Housing Board flat.
When he came out of prison, he decided to trust the agent, who been recommended by another former inmate. So he took the man's suggestion that he borrow $5,000 at 10 per cent interest from a moneylender 'friend' to tide him over while the home was put on the market.
The agent assured him his flat would be sold within a month and the debt cleared quickly using the proceeds.
Instead, over the next three months, only one prospective buyer was taken to view the property, and panicked phone calls to the agent went unanswered.
'I wanted to start over, quickly sell my house, clear my debts, downgrade, stay with my wife,' said the former mechanic. 'Instead, I ended up owing even more.'
In desperation, Mr Ahmad contacted another agent, Mr Hafeez Daniel, for help and a buyer was found within 48 hours. With Mr Hafeez's help, he has since lodged a report with the CEA.
'He claimed he was helping me, so I trusted him, but he made me sign some lawyer's documents I didn't understand, encouraged me to borrow money, and then didn't sell my house, resulting in me owing more and more interest every month,' said Mr Ahmad, who is unemployed and has only vocational education.
He is now living in Batam, Indonesia, while waiting for his application for a studio flat here to be approved.
However, his woes are far from over. He found out that the lawyer's documents he signed authorised the law firm to collect the cheque for the proceeds from the sale of the flat. It can then deduct the debts owed, as well as lawyers' fees of $1,600 and another 7 per cent for tax.
'I really hope there is enough after that to pay for my studio flat. If not, I might not be able to stay in Singapore any more,' said Mr Ahmad.
A spokesman for the CEA confirmed it was investigating a number of cases of salesmen referring clients to moneylenders, based on feedback and complaints.
'We are working with the relevant agencies such as the police and HDB in our investigations,' he said.
By law, agents are not allowed to introduce or recommend clients to moneylenders. If found guilty, they can be jailed for up to a year and fined up to $25,000.
Real estate veterans said the issue of agents colluding with lenders is not new, but is becoming more common as more families fall prey to gambling debt.
'The problem became rampant after the casinos. I started seeing at least two to three cases a month of families looking to sell their homes after racking up casino debts,' said Mr Vincent Wong, key executive officer of Crest One Realty.
He said that in the past year, two of his clients had discharged him, saying they owed money to lenders who wanted them to use a particular agent.
[email protected]