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Toa Payoh Vets Clinical
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Making veterinary surgery alive
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Don't Kill The
Racehorse While It is Running -
Part 1
Dr Sing Kong Yuen,
BVMS (Glasgow), MRCVS
First written: Nov 24, 2009. |
OCTOBER 15, 2009 AT 99 CENTRAL
CAFE
Sweat drops beaded on his tanned
and shaven forehead on this warm and humid night of Thursday, Oct
15, 2009. He had messaged to meet me at Central 99 opposite the Fire
Station, near Peninsula Plaza, saying he would no longer want to
deal with Khin Khin. I was now with him at 9 pm to see if
I could salvage an emotional realty case for Khin Khin who is a novice
realtor.
 Khin
Khin
is an old friend who gave up working as veterinary technician in
Singapore. She wanted to be a
business woman rather than earn a miserable fixed income working for
a Singapore veterinarian.
She had stressed the
Seller to his emotional limits as she worried about him asking for
loans and would not return her phone calls. Now, he could not
tolerate her presence. He did not want her to handle the HDB
(Housing & Development Board) apartment sale anymore and so he
messaged me to take over.
He was Khin Khin's contact
and acquaintance.
Therefore, Khin Khin should be the one handling his case. Khin Khin had lent
him over $1,000 interest free, despite my advice
not to accept prospective sellers that used the realtor to borrow
money. Such credit risky cases are invariably stressful and monies
lent are usually not returned.
Town Council Legal Action
"You are fortunate that Khin Khin had found you a prospective buyer," I
reminded him before he cursed my friend. In a rising property
market, there were many interested buyers, but he was a bankrupt and
prospective buyers and agents pounced on him like sharks attracted
to a bloodied patch of sea. His first realtor (Agent 1) took 3
months and there a sale. That agent had a buyer who offered him
$40,000 below valuation and he had been desperate enough to accept
the offer and signed an option to purchase (OTP). However, the
"buyer" at first gave him $100 as option fee instead of the usual
$1,000 and that was later increased to $400.
When a Seller shows he
is in dire straits, the predators are many. I felt very sad for this
professional engineer. He used to earn $10,000 a month and drove
cars which meant he was financially sound. Cars are very expensive
in Singapore. But the economic recession had shrunk construction
jobs. He was let go at the end of his contract. Now he was now down and
out.
In the private sector, once an engineering project is completed, the engineer is retrenched
unless he gets another project for the boss.
I had agreed to meet him to see whether I could help. Khin Khin had
written him off and cut losses. I knew in advance that he would want
some loans and if I could be of help to a stranger in distress, I
would do so. I consider such loans as gifts as there is no need to
stress myself about payback. If I can't help him, I will tell him
accordingly. I can't help all the people in dire straits.
This man was behind in his payment of Town Council conservancy fees
for many years.
"The Town Council fees are $60.00 per month," I said. "How come you
owe the Town Council over $3,000 just for non-payment of less than
12 months?" I asked the man in dire straits (MIDS).
"The Town Council charged me for their lawyer's fees to claim money
from me," the man said. Without settling the amount, HDB would not
permit the sale of his HDB apartment to proceed. He was supposed to
pay the Town Council $100 per month. But he had more need of the
$100 Khin Khin had given to him 3 weeks ago. This $100 was from the
$1,000 deposit to secure an Option To Purchase (OTP) from a buyer
found via Khin Khin's Advertisements.
He had assured Khin Khin that he
would pay the instalment himself as Khin Khin wanted to do it herself.
He had abused the trust by not paying the TC.
Khin Khin had also lent him $200 to save
him from being jailed for not paying a National Environmental
Agency (NEA) fine too. Being jailed for 1-2 weeks would jeopardise the
sales process as he would not be physically around to do the
cumbersome administrative work involved in the HDB sales.
"My friends said I was stupid not to run away when the NEA officer
caught me smoking in a non-smoking area," he said. He could easily
outrun the NEA officer anytime as he was lean and fit.
He had also lost his Identity Card
and needed $300 to get a replacement. Without the card, it would be
difficult to proceed with the sale. "I have a photocopy of my IC,"
he said. But that might not be acceptable to the HDB during the
First Meeting. So, I put up $300 to help
him to get his IC replaced as Khin Khin was reluctant to put up more
money. Khin Khin was much worried as to what other fines or obstacles would surface
again.
Utility Company Legal Action
He also owed Singapore Power some money and was now living without
water and electricity in his HDB apartment. This could be paid out
of the sales proceeds of his apartment by the Official Assignee (OA)
if there is any balance left after the HDB and the Central Provident
Fund (CPF) took their respective first and second claim of the
monies. So, the $600 owed would not need to be paid for the sales to
proceed, unlike the Town Council fees of over $3,000. The Town
Council management apparently does not participate in the bankruptcy
action.
Loan Sharks
In such cases where a person needs money desperately, loan sharks
may have provided the Seller some loans at 20% interest per month. In a
developed country like Singapore, loan sharks still flourish and
thrive. They make their presence felt by spraying red paint onto the
door and scrawling "Owe $, Pay $". Sometimes, they padlocked the
main gate of the door of the borrower.
This Seller said he did not borrow from
loan sharks. But how do we confirm this? This is one good reason not to handle such cases. How
do I know whether had had loan sharks or not? Can Khin Khin accept his word?
For the last 3 months, Agent 1 had rented out his HDB apartment. If
there were loan sharks hovering around, the tenants in his HDB
apartment would be pestered. There were no such incidents.
Official Assignee
A bankrupt is financially controlled by the Official Assignee (OA)
in many ways. One of them is that he must have a letter of approval
to sell the HDB flat from the OA. Without this letter, the HDB would
not commence any sales action. To do that, he needed to show the OA
that he had an OTP. Khin Khin had got him an OTP and
therefore he could do that.
But what about the option money of
$1,000? Should this money go to the OA? He needed the money to
settle his Town Council (TC) fees which totalled to $3,000 to be
paid in full prior to the completion of the sale. If not, HDB would
not permit completion.
Would the HDB permit him to pay the TC from the sales
proceeds? Would the TC agree? The TC definitely had not been part of
the bankruptcy claim unlike the Utility Company. Therefore, the TC
wants its ounce of flesh before he can proceed with the completion
of the sale. That
means he would have to find money to pay up the TC first. Who would
want to help him? $3,000 is a large sum.
A Caveat Was Lodged
When I thought that the TC was his main problem, I discovered that a
caveat had been lodged by Agent 1's buyers and a Singapore Bank. Did
he not return the option money of $400 to the buyers to cancel the
sale? He said he had but the cancellation letter was with Agent 1.
"Why would the bank lodge such a caveat?" I asked him.
"For opportunity lost," he
said. Apparently, Agent 1's buyers had taken out a bank loan and
therefore had to pay bank fees even though the loan was not taken
up. This was "opportunity lost" and the Bank became the Caveator.
Agent 1's buyers were the Caveatee.
One of the numerous rules of the HDB sales procedure is that the
prospective buyer must have the home loan pre-approved before HDB
approves the sales.
No pre-approved loan, no deal.
So all prospective buyers may incur bank fees to
secure a loan after they sign the OTP and put down an option money of $1,000 to secure the
property for 14 days. If they don't exercise the option after 14
days, the Seller keeps the $1,000 payment. If they exercise the
option, they pay $4,000. (HDB permits a maximum of $5,000 as
deposit).
Before they exercise the OTP, prospective Buyers must show documentary proof to the HDB that they have
secured a loan. If the sales process cannot be completed as in this
case, the Buyers have to pay this particular bank 1.5% of the approved loan.
Not all Singapore banks levy this charge and therefore
prospective buyers must be alert.
In this case, the Bank did charge the prospective Buyers for failure
to exercise the OTP. Therefore, if the housing mortgage loan is
$300,000, the prospective buyers have to pay $4,500. Good money for the bank,
thanks to this HDB policy. This practice is not mandatory in private
property purchase and that should be the way as you can see from
this example of what happens in the later part of my story.
Back to what was the Seller doing. He went to the address stated in
the caveat to seek out the caveatees (Buyers of Agent 1). It was a
non-existent address. So, what to do now? The lawyers of the Bank
had apparently asked him to seek out the first Buyers. But he could
not find them!
Agent 1. It would appear to the Seller that the caveat
was lodged by Agent 1 to get money owed. I asked the Seller how much
Agent 1 wanted to remove the caveat. With a caveat, the sales cannot
be completed although HDB can commence sales action. So how much
does Agent 1 want?
"Cash of 2% of the sales price in order to provide
him the letter of cancellation." the Seller said. This was a lot of money even for a
man in the street. And for a bankrupt, it was impossible. "I offer
him 10% after completion of sales," the Seller told me. I asked
him, "Why should
Agent 1 trust you?"
Incommunicado
As you can see, it is
extremely time consuming and stressful for Khin Khin to handle him. Many
times he would not return the phone calls. Bankrupts and people
owing money avoid returning phone calls and this is a common
behaviour. It is best not to lend money to friends and acquaintances
as such loans are very hard to recover. Borrowers just disappear
from your radar, avoiding you as if you have the bubonic plaque.
One evening, Khin Khin and her husband had to scooter to Lor 7 in
Geylang to locate him after he did not return phone calls regarding
offers by prospective buyers. Later he told me he had no charger.
Excuses? I don't know. Khin Khin's husband bought him a new phone and
phone card and he was contactable now and then.
Main gate of the door padlocked.
During the first week of marketing, Khin Khin discovered that a padlock
was put onto his main door gate. Therefore she could not show the
unit to prospective buyers. She phoned him and he said that his
estranged wife had done it. He spoke to his wife who did not commit
such actions again. It was really stressful for Khin Khin. Fortunately,
loan sharks were not involved. Padlocking the gates is one of the
favoured actions of Singapore's loan sharks. Scribbling on the walls
to harass the debtor is another favoured action. To tell whether the
MDIS has taken loans from the loan sharks, it is easy. The walls
outside his apartment would be freshly painted in certain areas to
cover up loan sharks' scribbling of "O$P$"(Owe $, Pay $) and a phone
number. There was none.
Forced sale by the HDB
Presently, the caveat problem had to be resolved and he had 9 days
left. "Why don't you just let the HDB sell it?" I asked him as he
had threatened to let the HDB do it if Khin Khin was incompetent and
could not find a buyer.
We didn't have nice words from him despite helping him with loans.
Borrowers sometimes behave as if lenders owe them money! So avoid
being a lender.
Now the deadline to sell or be acquired and force-sold by the HDB loomed close.
He had already squandered 3 months with Agent 1 with a sale offer
from Agent 1's buyers at 20% below valuation in a property market
that was bubbling upwards. He did not proceed with the sales and
this landed him in hot soup as you can see - a caveat was lodged by
the banker of Agent 1's buyers.
The HDB would just sell his apartment at 90% of the valuation if he
had no Option to Purchase. HDB does not open it to the market and do
the selling. But now he had a buyer at valuation. Therefore, he would
lose a substantial amount of 10% which could be $40,000 since his
valuation was $40,0000. This was not a small sum to sniff at.
There were so many problems of finance, litigation and stresses. "Only a foolish
realtor would handle this case." I sat down outside 99 Central cafe
and faced the man in dire straits (MIDS).
"The race
horse is running," MIDS said to me at the 99 Central cafe. He sipped a cup
of Chinese tea while I drank 7 Up. "Khin Khin had whipped the horse hard
and caused it to race wildly. Don't kill the horse while it is
racing."
I was surprised that he used this analogy that I was very familiar
with. I was a racehorse vet at
the Singapore Turf Club for 8 years and knew what the effects of
whipping would do to a horse.
Khin Khin had given the MIDS the carrot by lending him $1,000. Now
he got the whip of Khin Khin's emotional outbursts. MIDS was now a stumbling
horse that had been whipped ferociously. If he fell, that would be
the end of the race. Should I just abandon
him and cut losses? Why should I throw away good money after bad
when I barely knew this MIDS? He was Khin Khin's acquaintance and he was
a stranger to me.
Yes, the race was on. The race to prevent the HDB from acquiring his
apartment once Khin Khin's buyer backed out. HDB is a kind organisation
and had given him many months to sell his apartment to pay his debts
to the HDB.
What he needed now was time. A month or two. And some financial
help. From my calculations, he needed around $3,000 to pay the Town
Council and given time, he could find a job as an experienced
engineer and get the money. But the caveat lodge would cost him
money if he wanted it to be lifted as the bank was asking $4,000 to
settle.
Should I walk out on him? This was a genuine hardship case of a man
going down and out when the recession kicked in.
For humanitarian reasons, I put $300 into the ATM to clear his TC
overdue instalments the next day. I don't expect any return of the
money as I deem this case high risk.
"No, I will not give you the $300 to do it," I said to him
that humid evening at 99
Central when he asked me for a loan of $400 to help him out. $100 to
survive the next few days and $300 to pay the TC. He said he would be
imprisoned by the judge for default of payment to the TC. This is
credible. "If the
racehorse is boxed inside the racing stall, he can't settle his
sales matter," he had said once. So, it would be better to help him
and consider that the money is a gift. The MIDS had only 9 days to go.
I don't see the caveat being lifted by the Bank in 9 days because
the Bank has plenty of money and time when dealing with an
individual. So, with a heavy heart, I went to the Bishan Town
Council the next day and banked in $300 to his TC account, knowing
in high probability that this money is down the drain. MIDS would
drag any realtor into the gutter. As a bankrupt, he had nothing to
lose.
OCTOBER 22, 2009. Khin Khin CUTS LOSSES
What is actually the main problem affecting the closing of this
case? Khin Khin was so stressed out about losing her money that she
could not focus on the main problem. Therefore I had to help. "The
horse is still running," I said to Khin Khin. "It is not dead. You had
punted by lending the Seller $1,000. If the horse loses the race,
you have no chance of getting your money back." I did not want to
rub salt into the wound by saying "I told you so." She
wanted out. "OK," I said to an old friend. "I will take over
and try to get the money back for you." Khin Khin
realised that this was a losing case as the MDIS was contacting the
Buyer's agent directly too.
This case just brought
out all the emotions of Khin Khin such that she could not function
normally.
The Letter of Cancellation Of Sale.
The Caveat, not the unavailability of the Letter of Cancellation is
the main problem. But the Seller seemed to have veered to the wrong
track by looking for Agent 1 or the first Buyers. I could not
contact him by handphone for 2 days. As to why he could not answer
his handphone or respond to my text message promptly, I have no
clue. Could he be incarcerated? I did not invade his privacy when he
phoned me 2 days later to say he had sent a letter to the lawyer to
remove the caveat. "Which lawyer?" I asked him. He said it was the
HDB lawyer or something vague. He still could not locate the first
Buyers nor get Agent 1 to give him the "letter of cancellation" of
the first sale after returning $400 Option Money to the first Buyer.
He said the letter was with Agent 1 and he did not have a copy. I
gave him the benefit of the doubt. But there was something amiss.
Something I could not lay my finger on.
Be
Proactive in Solving Problems
Time was running out for him as he had less than 7 days to get a
clean title to his property. I asked him to fax to me what documents
he had written to the lawyer in order to help him. Writing a letter
and waiting for the lawyer to reply would not give him time. He was
running out of time now.
Agent 1's legal department
I phoned Agent 1's firm 3 times. Every time, the person who answered
would say that the firm's lawyers would call me back. They never
bothered to. So I had to persevere and finally met the Head of the
Legal Department. The lawyer who handled complaints was on sick
leave today, Oct 23, 2009.
"Your Seller need to get a lawyer to lift the caveat," the Head, a
lawyer, pointed out the relevant paragraph in the copy of the
Caveat. He was kind enough to show me the "Grounds of Claim" in the
Caveat stated that the Singapore bank had given a letter of offer to
the first Buyer who had accepted the Letter of Offer. Therefore, the
Bank had claim to this property.
"How can a bankrupt afford a lawyer?" I asked him. "Are there
services of lawyers who help such bankrupts?" The Head did not know.
The Bank's lawyers
"I am only doing out of goodwill to meet you," the young lawyer
repeated a few times while she read the copy of the caveat and
referred to her file. "I act for the bank. Are you sure you are not
the Seller?" The Seller had 3 names like what all Chinese. "Are you
a Myanmar national?"
"No," I said. "I am trying to help this person." Why would anybody
want to waste time to help a stranger? A stranger in need of help.
There are better things to do in this world.
So, the young lawyer probably could not understand. I must be the Seller
in disguise. To make matters worst, I did not have any Toa Payoh
Vets name card in my wallet.
"I will try my best," the young lawyer repeated herself a few times
and I wished she would not do that. But I was given free
consultation and beggars could not be choosers. "I have written to
the Bank immediately on receipt of the Seller's letter. Please
remember that I act for the Bank." Her reminders that she does not
act for me had been repeated ad nauseum politely.
"I will phone the Seller when I have some news," she said as she
referred to her file. "Why did he wait so long?" she asked when I
said that the Option to Purchase would expire around 3 days.
"Please phone me," I said. "The Seller sometimes don't answer his
phone." The lawyer was puzzled as to why. I don't know why too and
could not give an explanation. There was something fishy in this
case. Did the first Buyer really give a Letter of Cancellation on
return of the $400? I did not contact Agent 1, so I do not know.
Time was really running out and the claws of the HDB would just grab
the HDB and sell it off at 90% of the purchase price. This seems to
be inevitable as the caveator would take its time to respond to the
Seller.
The Seller had written to the Bank via the lawyer that the cavetees
had false address when he went to the residence mentioned in
the caveat. The Seller wrote that the Bank would be held responsible
for his financial losses. I was thinking that this was an empty
threat. The Bank has lots of money to frustrate the Seller, a mere
individual.
Banks are fair weather friends. When you are a bankrupt, the Bank
knows that you are in no position to make threats. First of all, you
need a lawyer. The fact that MIDS wrote a letter himself, instead of
through a lawyer, showed the Seller's hand. A poor hand. A card that
could not win.
So, why should the Bank bother to respond urgently when it has lots
of funds to bear any losses. Now, if the caveatees had false
addresses, that would be criminal. Yet, how could this Bank approve
loans to people with false addresses? It is possible though. That
"false" address would be leverage to get the bank to withdraw its
caveat. But time is of the essence and there was not much time left.
Only less than 7 days.
Sales can proceed but completion cannot be achieved.
"There are cases where the sales proceed for the time being,"
the lawyer
told me. It is true that the HDB may permit sales to proceed if both
parties agree.
"Not in this case," I said. "The 2nd Buyer will not exercise the OTP
since he would have to pay another $4,000. If things don't work out,
he loses $5,000." The lawyer was immune to sad stories. She
never phoned me. Why should she? I had not paid her for her
time and was not her client. I presume sad stories are a dime
a dozen for lawyers in conveyance and they don't waste their
time on losers. Losers who can't afford lawyers. |
Don't Kill The Racehorse While It is Running - Part 2 |
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