SINGAPORE – Don’t invest in overseas properties just because they are “cheaper” than similar ones in Singapore, especially when these are sold by unknown companies.
If the sums involved are huge, you should even engage an independent real estate professional to verify that the deal is genuine, or visit the development to ensure the location is well worth your money.
Doing so can save you the heartache that other less vigilant Singapore investors went through when they bought duds from dishonest developers.
There have been at least five overseas real estate disputes filed at the High Court in Singapore in recent years after the buyers discovered they had been conned into buying homes that did not even exist.
In all these cases, the victims did not do their own checks and had bought the homes based on exaggerated or false claims made by Singapore-based sales agents.
Although two of them successfully sued to recover their money from the Singapore sellers, they would still be out of pocket after spending tens of thousands of dollars on lawyers’ fees.
Here are their stories and how you can learn from their investment nightmare.
Buying a $2.4 million home without checking
A property investor paid $2.4 million for a holiday home in Japan after listening to a sales pitch and reading the project brochure.
She and her appointed representative were so taken in by the seller that they thought the project was as safe as developments in Singapore, and there was no need to appoint their own lawyer to conduct the necessary checks.
If they had at least visited the project site – touted to be a ski resort in Hokkaido – they would have discovered something fishy because the address was a forested area, and not a boarded-up construction site for luxurious homes.
The buyer discovered the deal was a scam only two years later when the developer did not pay her real estate agent commission for her role in the deal.
When they engaged a Japanese lawyer to check, they found out that the developer did not even own the land.
Fortunately, the buyer was able to sue the Singapore vendor in the High Court to recover almost $2.3 million that she had paid since she signed the deal in 2019.
The buyer and her agent kept records of the deal and could show that the vendor had actively marketed the project as genuine. They also proved that he sent the sales brochures and made false assurances that the construction would start soon.
The seller had also pressured the buyer by lying that other buyers were interested in her chosen unit.
Although the court ordered the seller to return what the buyer had paid, she had to spend more money and time just to get back what was hers in the first place.
Buying 16 overseas homes that did not exist
When a small new private apartment here can cost close to $1 million or more, it is certainly tempting for investors to succumb to the lure of owning a foreign property that costs as little as $50,000.
This was what happened to a couple who spent about $800,000 to buy 16 properties in two different countries in 2012.
Ironically, the couple, who both worked as real estate agents, were misled into buying these properties by other agents here. They ended up taking total losses because both projects turned out to be duds.
Fortunately, like the buyer in the earlier case, they kept records of the sales processes so they could take the two sellers to court for misleading them with untrue information.
The first case involved an investment of $200,000 in three properties in New Zealand. In 2019, Singapore’s highest court ruled that the Singapore company and its boss, who brokered the deal, had to refund the couple.
The couple scored their second court victory in 2023 over their $600,000 investment in 13 properties in Brazil. The court then also found that the Singapore agents involved in the deal had made fraudulent misrepresentations.
“Source:[When investors paid millions to buy non-existent overseas homes] © Singapore Press Holdings Limited. Permission required for reproduction”
