Some families resort to selling their flats just to pay their loans and short-term expenses, something dishonest real estate agents have taken advantage of, said Khaw Boon Wan, Minister for National Development.
To illustrate such a concern, Khaw mentioned the case of former prison inmate Ahmad (not his real name), who decided to sell his three-room flat when he was released in November in order to pay his debts, which had run up to S$15,000 while he was jailed for eight years.
But the 56-year old had his debts increased by S$9,500 when a property agent referred a moneylender to him to supposedly tide him over while selling his house. Unfortunately, three months after, the flat was still unsold.
On record, nine rogue agents were debarred by the Council for Estate Agencies (CEA) last year, as they had been proven to be involved in unlicensed moneylending practices.
Ahmad’s debts comprised mostly loans from his friends in jail, along with arrears and unpaid utility bills for his HDB flat. As the agent was recommended by another former inmate, Ahmad trustingly followed his suggestion of borrowing S$5,000 at 10 percent interest from the moneylender.
The agent assured him that the flat would be sold in and the proceeds would easily help clear his debts. But only one prospective buyer viewed the property during the three-month period and the agent subsequently avoided his calls.
“I wanted to start over, quickly sell my house, clear my debts, downgrade, stay with my wife,” said Ahmad. “Instead, I ended up owing even more.”
Ahmad then decided to call on another agent, Hafeez Daniel, who found a buyer within two days. Hafeez also helped the victim lodge a report with the CEA.
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