A WOMAN'S refusal to go through with a deal to sell her $3.68 million house to a couple has called into question at the High Court whether backdating property documents is lawful.
Madam Ting Siew May was sent an "option to purchase" (OTP) form by an agent acting for Madam Boon Lay Choo and her husband Law Khim Huat, who sought to buy her landed property in Jalan Angin Laut in Simei.
Madam Ting signed the form on Oct 13 last year but it had been backdated to Oct 4 - two days before tougher new loan rules kicked in.
This meant Madam Boon could apply for a mortgage under the older, less stringent rules. Under "property cooling" rules introduced by the Monetary Authority of Singapore (MAS), the loan-to-value ratio for new residential property loans was reduced to 60 per cent if the borrower's loan period extended beyond the retirement age of 65 years, among other things.
Prior to the Oct 6 cut-off date, Madam Boon and her husband, who are in their 50s, would have been eligible for a loan of up to 80 per cent of the property's value.
The couple, who had already paid the 1 per cent deposit, are seeking a High Court order to compel Madam Ting to complete the option to purchase exercise.
At issue is whether a backdated option to purchase form signed by the seller is valid, or whether the court will intervene to make the deal valid or quash it altogether.
Madam Ting is declining to sell her property and in so doing, is arguing that she did not know about the new MAS regulations when she signed the backdated OTP because she was in Indonesia with her son at the time.
Court papers filed by her lawyer P. Balagopal said she came to know of the MAS rules through her son Francis only when she returned to Singapore on Oct 19.
She made it clear she did not agree to the backdating of the OTP at all and any backdating was of no benefit to her.
Madam Ting told her lawyers to abort the sale as she found it was illegal to get around the MAS rules by backdating the OTP.
She denied claims by the buyers in court documents filed that she reneged on the deal because she believed her house was worth more than the $3.68 million they had originally agreed on.
But the buyers, represented by lawyer Ng Lip Chee, made clear in court documents filed that they are prepared to buy the property on the basis that the OTP was signed on Oct 13, with the backdated version cancelled.
This would redress any alleged irregularity and also mean that their loan eligibility would be lowered in line with the new MAS rules.
The High Court hearing, which began in April, is due to continue later this week before Judicial Commissioner Lionel Yee. The court is expected to clarify the law on backdating of property deal documents.
The case will also make clear whether the court is prepared to step in and cleanse the contract by allowing the date signed to be the actual date of the deal instead of the previous one.
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