Buying Foreign Property? Do Background Checks First

Source : The Straits Times, Saturday, October 13, 2007

BUYERS should be aware of their legal rights and obligations in the foreign country.
The Consumers Association of Singapore (Case) pointed out that the laws in other countries may not provide the same level of protection for property buyers.

The consumer watchdog also said that buyers should conduct their own checks before signing on the dotted line.

For instance - buyers could check with the country’s embassy on land-ownership laws.
It would also be a good move to check the track record of previous developments in the area. If there were previous problems, that could be an indication of trouble to come.

Lawyer Aziz Tayabali said: ‘If the developer is represented by a Singapore firm, the buyers should find out its obligations before signing anything.’

A reputable local representative will be less likely to desert buyers should something go wrong.

Mr Nicholas Mak, head of consultancy and research at Knight Frank, said buyers should also check out the property market in the country they are going into.

He pointed out: ‘In China, the property market is red-hot for new developments but the second-hand market is slow, so people who buy for investment would have to sell at a lower price compared to a new project.’

Prospective buyers should also try to understand why the developer is selling the properties in Singapore instead of in the home country, he added.

Mr Mak said: ‘Be cautious and do your research on whether that foreign market is facing a decline in prices or demand, or you could be buying into a risky market.’