Singaporeans who have invested in overseas properties but ran into problems are finding it tough to get their money back, as filing legal complaints against foreign developers is hard due to the unfamiliar rules abroad, revealed media reports.
Moreover, class action suits tend to drag on if all the claimants do not agree on decisions, said an attorney who is working with several clients to recover their monies from foreign developers, including EcoHouse.
Reportedly, the property firm promised a return of 20 percent for a 12-month contract with a minimum investment amount of £23,000 (S$46,467) per Brazilian housing unit. However, many investors have yet to receive their capital or the promised returns.
In another case, his clients invested around US$20,000 (S$40,398) in a US property fund, but the returns have yet to materialise.
Despite the arduous process of filing legal complaints against foreign entities, Singaporeans can turn to the Council for Estate Agencies (CEA) for cases involving local agents who have marketed foreign properties.
According to CEA, estate agents and salespeople must adhere to the Estate Agents Act when marketing overseas properties in Singapore. Those who flout the rules could receive a warning letter, pay a fine, or have their licence suspended depending on the severity of the crime.
On average, the agency receives 800 complaints each year. Specifically, there were nine complaints involving foreign property purchases from 2013 until now. These include delayed construction, winding-up of foreign developers and loss of entire deposits after cancelling the transaction. However, CEA did not reveal the outcome of the complaints.
Based on data from the Monetary Authority of Singapore (MAS), the estimated losses stemming from such cases are not small, considering that foreign property transactions surged from S$1.9 billion in 2012 to S$3 billion the following year, before easing to S$1.1 billion in the first half of 2014.
Furthermore, about 600 to 1,000 overseas property units are transacted here each year, compared to around 6,000 units sold in the local housing market, noted Chestertons managing director Donald Han.