GEORGE TOWN: A woman who had her cash-purchased home auctioned off after a developer failed to settle a bank loan today lodged a police report claiming she was cheated by the developer.
Jayainthy Subramaniam, 47, said Lunas Garden Sdn Bhd had failed to pay a redemption sum to RHB Bank so as to allow the property to be transferred to her, which led to the loss of her Lunas home on Dec 9.
“I am making this report because the developer has clearly cheated me,” she told FMT. The report was lodged at the Kulim Hi-Tech Park police station.
Jayainthy lodged the report on the urging of the National House Buyers Association.
HBA is now discouraging cash purchases of properties to avoid issues of cheating, in light of Jayainthy’s case.
FMT previously reported that her single-storey home in Lunas, Kedah, had been auctioned by a bank as, she said, progress payments she made to the developer, Lunas Garden Sdn Bhd, never reached the bank.
She had paid for the property in cash, through progress payments in three years before the project was completed. She paid RM78,850 for the unit.
When she sought to claim the property, she said the bank asked her to pay about RM100,000 in redemption fees, overdue interest and other charges, despite showing evidence in the form of receipts of all payments made to the developer.
On Dec 9, RHB Bank auctioned off the unit. The bank had earlier told FMT it was unable to help as Jayainthy was not its customer and that it was not privy to Jayainthy’s agreement signed with Lunas Garden Sdn Bhd.
The Consumers’ Association of Penang (CAP) had earlier said the bank should have carried out due diligence by asking if there were any cash buyers and inform them that a redemption sum must be paid so the home could be transferred to them.
CAP’s complaints chief Ravinder Singh said although the bank was not privy to the property purchase agreement, the buyer was similarly not privy to the developer’s bridging loan arrangement. “Hence, due diligence is important,” he added.
Meanwhile, lawyer Thayalan Subramaniam, who deals with real estate matters, said there was a legal avenue for Jayainthy to sue the lawyers who executed her sales and purchase agreement.
He said the lawyers were supposed to carry out proper due diligence in ensuring the property was transferred to her and by failing to do so, the lawyers could be liable to a negligence suit.
FMT has reached out to one of Lunas Garden’s directors for comment and has yet to get a reply.