Buying a property is usually considered complete once the purchase price has been paid and the buyer takes possession. But an unusual Singapore case shows how a purchaser can still become caught in litigation involving people he has never dealt with.

What Happened?

A buyer reportedly purchased a residential property for approximately $5.5 million and moved into the house with his family after completing the usual legal purchase process.

However, before his ownership could be formally registered, a court injunction affecting the property prevented the registration process from being completed.

The Seller’s Family Dispute

The dispute reportedly arose following the death of the previous owner. His widow challenged how certain assets had been dealt with and claimed that she had been deprived of assets which should have formed part of her late husband’s estate.

Although the purchaser had no involvement in the family dispute, the property he had bought became affected by the court proceedings.

Must Buyers Investigate the Seller’s Background?

Property buyers normally rely on their conveyancing lawyers to investigate matters affecting legal title. Searches may reveal mortgages, caveats and other registered interests affecting the property.

However, a purchaser is generally not expected to investigate every private family disagreement or inheritance issue involving the seller where there is nothing apparent indicating that the transaction may be improper.

3 Important Lessons for Property Buyers

1. Conduct Proper Legal Due Diligence

Engage a conveyancing lawyer and ensure the property’s legal title and registered interests are properly checked before completion.

2. Document the Transaction

Maintain clear records demonstrating that the purchase was genuine, independent and conducted at the agreed commercial terms.

3. Recognise the Limits of Due Diligence

Even careful buyers may not discover a private dispute that has not resulted in a registered restriction or other warning affecting the property.