http://www.straitstimes.com/archive/...unces-20120907

Developer takes back 20 units after buyers' cheque bounces

Published on Sep 07, 2012

By Esther Teo, Property reporter


DEVELOPER UIC has taken back 20 units worth more than $30 million in total at high-end project V on Shenton, after the buyers failed to stump up the money for the bulk purchase.

The Straits Times understands that the mega-deal was made jointly by a Singaporean and a foreigner, probably from Indonesia, during the project's soft launch in July this year.

Units at the 510-unit development in the central business district were then fetching an average price of $2,200 per sq ft (psf).

Sources say the buyers put down a cheque for 5 per cent of the total price - about $1.5 million - for the option to be issued but the cheque bounced.

The buyers are said to have bought other units at projects in Tanjong Rhu and Geylang over the same weekend. Those transactions were also aborted because of insufficient funds.

A UIC spokesman told The Straits Times that it had since resold most of the units, at prices that were about 3 per cent higher.

The upcoming V on Shenton, a 54-storey development, is about 43 per cent sold, with about 220 units snapped up.

Experts say delays in payments from genuine buyers are rare, but do occur sometimes when there is a hold-up in the transfer of funds.

Some buyers might also return units if they get cold feet, forfeiting 1.25 per cent of the unit's price in the process.

Non-genuine buyers occasionally surface, although such instances are unusual.

Mr Lee Liat Yeang, a partner at Rodyk & Davidson's Real Estate Practice Group, said that in such cases, the developer can take legal action to recover 1.25 per cent of the purchase price, which would amount to a quarter of the booking fee.

"I would ordinarily advise a developer in such a situation to make a claim for the amount entitled, unless the purchaser is a bankrupt," Mr Lee added.

Some people might pose as well-heeled purchasers in the hope of garnering the red carpet treatment from developers, who sometimes wine and dine wealthy individuals, say some experts.

Potential buyers are often given the benefit of the doubt as agents cannot afford to offend genuine purchasers, they add.

A chief executive of a real estate agency, who declined to be named, said he received a call from an Indonesian buyer last year about buying a penthouse at an Orchard Road project. The penthouse would have cost $20 million to $30 million.

"He asked us to book a two-night stay at a five-star hotel for him, but when we asked him for his credit card details, he admitted that he was trying to pull a fast one," said the agency head.

Ms Phylicia Ang, Savills Singapore's executive director for residential sales, said she advises her agents to use their discretion and to run checks on buyers if possible.

"But it can be tough to weed out non-genuine buyers because they are so uncommon," she said. "If a buyer is not a Who's Who in society and so does not have a certain level of exposure, it is also hard to conduct checks."

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