Buyers of conservation shophouse sue seller for $2.2 million over unfulfilled renovations

A woman is being sued for $2.2 million by a couple who bought a Joo Chiat Road shophouse from her, for allegedly failing to honour an agreement to cover renovation costs for the property.

The 2½-storey conservation shophouse was registered under MTL Tailor & Laundry, of which Ms Bai Hongmei is the sole shareholder and director.

Mr Loh Chung Hua and his wife Lim Wan Pey bought the property at 235 Joo Chiat Road for $6.5 million on Sept 5, 2022.

They are suing Ms Bai in a bid to recover more than $2.2 million needed for addition and alteration works she was allegedly supposed to fulfil, and for loss of rental income. The sum includes about $1.5 million in development fees payable to the authorities.

Ms Bai, who runs several May Tailor & Laundry outlets in town, denied the claims.

She named property agent Lim Swan Ling Lex and agency PropNex Realty as third parties in the lawsuit, accusing them of negligence and making false representations to her and the couple.

The third parties, represented by Mr K. Anparasan of WhiteFern, denied all the allegations. PropNex has filed a counterclaim against Ms Bai for failing to pay the agent’s commission of $139,000. 

The couple is represented by Lee & Lee’s senior partner and litigation and dispute resolution department co-head Julian Tay.

In their claim filed on Aug 4, 2023, the couple said they had responded to an online sale listing of the property on Aug 27, 2022.

They were told by Mr Lim, the agent appointed by Ms Bai to market the property, that the conservation shophouse has an estimated total area of 3,500 sq ft and the owner’s asking price was $6.2 million.

He said the property was leased to a pet shop for $10,000 a month until August 2024.

Two days later, the couple viewed the property and found it “untidy”. Mr Lim said Ms Bai was in the midst of carrying out renovations to certain areas that were not rented out, which she would complete even if the property was sold.

After the viewing, the agent sent the couple a 32-page renovation plan for the property and reassured them that the owner would be responsible in completing the renovations.

On Sept 5, 2022, Mr Loh met Ms Bai and Mr Lim at Funan Mall, where Ms Bai purportedly confirmed with Mr Loh that she would carry out the renovations in accordance with requirements from the relevant authorities. 

Ms Bai, who raised the selling price to $6.5 million, was said to have agreed to submit all necessary drawings and documents to the relevant authorities for approval.

As such, Mr Loh agreed to purchase the property at $6.5 million.

He and his wife exercised the option to purchase on Sept 23, 2022.

Some time around December 2022 or January 2023, Mr Loh was informed by Ms Bai’s agent that she was unable to complete the renovations, and she had proposed to pay for the renovations instead.

On Jan 11, 2023, the agent sent Mr Loh a draft document titled “supplementary agreement”, which outlined Ms Bai’s responsibilities in the addition and alteration works. The agreement noted that the “seller will pay the buyer the construction work and renovation cost”.

Two days later, Mr Loh sent a revised version of the agreement to the agent.

On Feb 16, 2023, the parties met at Newton Food Centre to discuss the supplementary agreement, which was signed on the same day.

The agreement stated that Ms Bai agreed to engage a consultant or architect to submit all necessary documents for approval of the addition and alteration works from relevant authorities, so that a temporary occupation permit and certificate of statutory completion for a total gross floor area of 3,500 sq ft could be obtained.

The agreement further stipulated that Ms Bai would secure quotations from three reputable contractors for the renovation work and cover the costs based on the average amount of the three quotations.

All these were to be fulfilled two weeks before the sale was to be completed on June 5, 2023.

The agreement also stated that Ms Bai would compensate the couple for loss of rental income during the renovation period, estimated at $9,888 a month for 10 months.

Ms Bai, who is represented by Ms Emily Teo Sze-Yin of Wilberforce TJC Law, denied agreeing to the supplementary agreement’s terms.

She said in her defence that minor renovations were ongoing during the viewing, and she had informed her agent that these would be properly completed.

The 32-page renovation plan “was purely a conceptual plan of potential renovations that could be done to the property”, and she denied having agreed to carry it out. She alleged that Mr Lim had falsely represented her regarding this.

Ms Bai said her first language is Chinese and claimed that the terms and contents of the supplementary agreement were not explained or translated to her. She said she was misled into signing the supplementary agreement, which she thought arose from her agreeing to perform the minor renovations.

She said she was led to believe that the execution of the supplementary agreement was necessary for the buyers to secure a bank loan to purchase the property.

Responding to Ms Bai’s defence, the couple said it was clear at all times that the parties’ discussion of renovation works was not limited to minor renovations.

This was because Mr Lim, Ms Bai’s property agent, had created a WhatsApp group chat on Oct 10, 2022, with Mr Loh, Ms Bai, and an engineer known as Chong, for the parties to update one another on the submissions to the authorities for the renovation plan.

When The Straits Times visited the property on July 18, the first floor was occupied by Pawsible, a dog enrichment school. 

The case is set for trial.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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