Singapore Property News

1 June 2011 No Comment Print This Post  Email This Post

Elder not entitled to money as HDB does not allow flats to be held in trust: Judge

IT SEEMED like an ideal arrangement. Mr Chong Sze Pak was not eligible to buy a Housing Board flat and his younger brother could not afford one.

So the businessman helped his sibling, Mr Chong Ser Yoong, pay for the flat, on the condition he held it in trust for him. But things turned sour when the time came to sell and the elder brother felt he should receive the proceeds.

Now the High Court, in a judgment concluded last week, has ruled that Mr Chong Sze Pak is not entitled to the $300,000. This is because HDB rules do not allow flats to be held in trust. When a property is held in trust, it is owned in a person's name but intended to benefit someone else.

The saga began in 1997 when Mr Chong Ser Yoong, the younger brother by 18 years, bought a four-room flat in Tronoh Road for $286,000.

The elder brother, who is now in his 70s, claimed this was done with his help. The Tronoh Road flat was later re-acquired by the Government for redevelopment.

The younger man moved to a new flat in McNair Road and the brothers carried on with the held-in-trust arrangement.

When the younger brother sold the McNair Road flat, the elder claimed the $300,000 proceeds of the sale should be paid to him under the trust arrangement.

But Mr Chong Ser Yoong's lawyer, Mr James Joseph, argued that even if the property was held in trust, this was invalid under the Housing and Development Act.

Justice Woo Bih Li agreed. He said the HDB law banning trust arrangements is meant to stop people who are not entitled to buy flats from getting around the rules. These could include people who already own another flat.

There was no document to show the brothers had asked for HDB's consent before arranging to hold the flat in trust, and the lawyer handling the case has died.

Mr Chong Ser Yoong had argued that costs should be granted to him since he won.

But the judge ordered both siblings to pay their own legal bills.

Mr Chong Sze Pak's lawyer, Mr Gurdaib Singh, is appealing against the main decision while the younger brother is appealing against the decision on costs.

Source: Straits Times News by K. C. Vijayan

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