Couple win right to buy house despite backdating contract

[reporter2]

http://www.straitstimes.com/archive/...tract-20130924

Couple win right to buy house despite backdating contract

Move affects only bank, not deal between buyer and seller, says judge

Published on Sep 24, 2013

By K.C. Vijayan, Senior Law Correspondent


HOME buyers Boon Lay Choo and Law Khim Huat had their eye on a $3.68 million landed property.

The trouble was that tough housing loan rules had just kicked in and reduced the amount they could borrow.

So the married couple tried to get around the regulations - by putting the wrong date on their option to purchase forms.

They backdated the paperwork by two days - giving them the chance to borrow 80 per cent of the property price.

When the seller found out about the illegal move, she tried to pull out of the deal.

Now, however, the couple have won their battle for the right to buy the house in Simei after the High Court ruled in their favour.

Judicial Commissioner Lionel Yee said that although backdating the forms was a breach of the regulations, this really affected only the bank.

It had nothing to do with the completely separate contract between buyer and seller. This meant there was no reason why the sale could not go ahead.

The couple - who say they were acting on their agents' advice - tried to bend the rules last October after deciding to buy the three-storey terrace house.

They had previously been eligible for an 80 per cent loan. But property cooling measures introduced by the Monetary Authority of Singapore meant they could borrow no more than 60 per cent of the home's value.

The couple, who are both business owners in their 50s, backdated their forms to Oct 4 - two days before the regulations took effect.

This meant they could apply for a loan under the older, less stringent rules.

The seller, Madam Ting Siew May, signed the paperwork but later decided not to go ahead with the agreement. So Madam Boon and her husband took her to court to try to force the sale.

Their lawyer, Mr Ng Lip Chee, accepted that the backdating was done to get a better home loan deal. But he argued that this did not mean the contract could not be enforced.

He added that the couple were prepared to go ahead with the deal as though it had not been backdated, and settle for a smaller bank loan. Meanwhile, Madam Ting's lawyer, Mr P. Balagopal, argued that by putting the wrong date on the forms, they had invalidated the whole agreement.

But the judge disagreed, saying that it was "merely incidental to the contract".

He added that the agreement between the buyer and seller was completely separate from the loan deal with the bank.

It was therefore "not an obstacle" to enforcing the option to purchase exercise.

The judge said that while backdating the forms could have breached the Banking Act, there was no provision in it that made the loan agreement invalid.

The couple are now set to buy the property - but with the smaller loan of 60 per cent.

It is not known whether any further action will be taken over the backdating.

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[Ringo33]

Taking 80% loan to stay in landed property.

Good example of what I have been saying.


**Better run before the security dog in this forum come backing**

[hopeful]

singaporeans damn kiasi. only backdating damn scared.

[ichigo55]

They still end up buying at 60% loan
What's the difference.

[proper-t]

Taking 80% loan to stay in landed property.

Good example of what I have been saying.


**Better run before the security dog in this forum come backing**

The landed troll is back to entertain us all.

People sell, he says its bad

People buy, he also says its bad.

What is wrong with wanting to get as high a quantum a loan as possible, especially when interest rates are low?

The crux is whether they can service it comfortably. If you read article carefully, they have settled for a 60% loan which means they had the cash all along.

What is a more important message from this article is that people are STILL buying landed and are coughing up the cash to do it !!!!

Funny....some people advocate running, yet they still hang around here waiting to be bitten. What a sucker for punishment.

[evolutionx]

They still end up buying at 60% loan
What's the difference.

remember the golden rule .. if interest rates are cheap ... take maximum. its ok to sit on some cash in case other opportunities come up. if market takes a down turn, just top up when asked by bank.

but on the flipside, one of the bigger property companies in SG only finances between 35-40% max.. so really depends on the person. (in this case, their cash flow is amazing)

[princess_morbucks]

Actually why the seller wanna back out?
If loan borrowing become more stringent, then the pool of buyers become less, and the possibility of them selling will become less.
Dunno how some people think.

[DC33_2008]

Seller's remorse or thought can makan there down payment.

Actually why the seller wanna back out?
If loan borrowing become more stringent, then the pool of buyers become less, and the possibility of them selling will become less.
Dunno how some people think.

[evolutionx]

Actually why the seller wanna back out?
If loan borrowing become more stringent, then the pool of buyers become less, and the possibility of them selling will become less.
Dunno how some people think.

maybe got higher offer shortly? wouldnt be surprised. even 1% higher price and people will do anything to change the terms ...

[proud owner]

Actually why the seller wanna back out?
If loan borrowing become more stringent, then the pool of buyers become less, and the possibility of them selling will become less.
Dunno how some people think.

if some authorities do a check and found that the buyer Cheated by changing the date ,..and the seller knowing and allowing it ..

wouldn't the seller become accomplice ?


maybe they didn't want to be implicated and decided not to go thru

its a tough decision .... if I know the buyer cheated I probably also wouldn't allow it ... who can say for certain at that point in time that the authority wouldn't make the seller an accomplice to a "crime" ?


with this case ... does it mean the that our law ALLOWS buyers to Cheat and that its not a crime ?

[evolutionx]

this is why .. whenever any buyer ask for any monkey business, i just walk away from the deal. sometimes the price is too attractive but had one buyer told me he will pay higher than my price without bargain, but wants me to return his wife 10% as "commission" (he wanted to get higher bank loan and put in less cash). told him take a hike and don't waste my time. but the way he proposed it, im pretty sure he had done this kind of thing a few times before.

always expect the worst when people ask you to do monkey business.

[xebay11]

Taking 80% loan to stay in landed property.

Good example of what I have been saying.


**Better run before the security dog in this forum come backing**

Amazing! and in their 50s too, what is the loan tenure?