HomeNewsUOB Won Inflated Home Loans Legal Battle Against Developer
UOB Won Inflated Home Loans Legal Battle Against Developer

UOB Won Inflated Home Loans Legal Battle Against Developer

UOB granted S$182 million in inflated home loans

LMC is the developer of Sentosa Cove condominium Marina Collection.

UOB initiated the lawsuit against LMC and several others in 2014 for their involvement in a conspiracy to obtain inflated housing loans totalling $182 million.

The 124-unit Marina Collection was launched for sale in late 2007, but only 42 units were sold by March 10, 2011, after a series of cooling measures were introduced.

UOB disbursed about $182 million in mortgages between December 2011 and September 2013 to purported buyers of 38 units in the condominium.

By April 1, 2015, all 38 buyers had defaulted on their loans.

Details behind the conspiracy

The conspiracy resulted in UOB losing a large amount of money after it disbursed about S$182 million in inflated home loans, financing more than 100 per cent of the purchase prices of the high-end apartments.

LMC also gave substantial “furniture rebates” of 22 per cent to 34 per cent that were used to offset cash payments required for the condo purchases, which were not disclosed to UOB.

Furthermore, LMC concealed the true identities of buyers, with most being nominees for Indonesian investors rather than the intended owners.

Appellate Division judges Belinda Ang, Woo Bih Li and Quentin Loh expressed concern over LMC’s lack of acknowledgement regarding the seriousness of its actions.

They highlighted that by deceiving UOB, Lippo had also misled appraisers and other buyers who relied on the stated purchase price in the option to purchase.

This not only affected the valuation of other units within Marina Collection, but also other similar projects.

The inflated purchase prices presented a distorted picture of a segment of the property market, the judges said.

Developer probed for alleged fraud

Lippo Group is currently awaiting a court verdict on the amount of damages it has to pay UOB after a long legal battle which started in 2014, and the Indonesian company’s woes may not be over.

The Straits Times has learnt that police are investigating the group’s subsidiary – Lippo Marina Collection (LMC) – over alleged fraud stemming from a court ruling in October 2022.

LMC is the developer of Sentosa Cove condominium Marina Collection.

The Appellate Division of the High Court had found LMC liable for using unlawful means in a conspiracy with real estate agents to sell properties financed by UOB.

In a decision dated Oct 28, 2022, the Appellate Division of the High Court found that LMC had intentionally provided false or inflated purchase prices to buyers in the option-to-purchase forms.

(Source: Straits Times)

Important for property buyers to disclose the true purchase price

Home buyers are obliged to disclose to the financial institutions and the relevant authorities the true purchase price of the property. This is to eliminate any fraud and efforts to undermine the transparency of the property market.

The actual or true purchase price means the purchase price of the property after deduction of the amount of any discount, subsidy, rebate voucher or other benefit provided by the vendor or any other party (including the payment of renovation or interior design costs or legal or stamp fees for the purchase of the property and any interest subsidies on any credit facility relating to the purchase of the property) having the effect of reducing the true purchase price of the property.

Do you intend to buy or sell your property?

You may be thinking what is the next step for you and if it is worth going through the necessary work to buy or sell your property.

When is the best time to sell and can I sell for a better price than my neighbours? 

What are my options for buying a property and how can I get the best deal?

Here at The Landed Collective, we specialise in residential properties and that means, HDB flats, Condos, Landed Houses and New Developer Sales. 

Before you start anything, speak to us for a complimentary consultation as we will provide you with comprehensive advice, run through the essentials on the property market and answer any questions you may have.