If you’re in your early 20s, you may not know the significance of the name “Swee Kee”. From 1949 to 1997, Swee Kee pioneered Hainanese chicken rice from a shop along Middle Road. That’s the type of chicken rice most commonly found in food courts, the difference being that people running Swee Kee could actually cook. Sadly, the other legacy of Swee Kee’s founder is now a multi-million-dollar legal battle:
What’s going on?
Mr. Moh Lee Twee, the founder of Swee Kee chicken rice, bought a bungalow in Tanjong Katong in 1957. It sits on a massive 13,844 square feet of freehold land, and is a sign that you really should have gone to culinary school instead.
In September 2015, the property was auctioned for $16.3 million (the record high of the year.) At the time, the registered owners of the property were Mr. Moh’s two sons, Mr. Moh Tai Tong and Mr. Moh Tai Suan, and the wife and child of his eldest son, Mr. Moh Tai Sing, who passed away in 1987.
In November of the same year however, one of Mr. Lee Twee’s four sons, Mr. Moh Tai Siang, filed a suit in the high court. He claims that he should receive a portion of the sale, as one quarter of the property was being held in trust for him by his brothers.
However, Tai Tong and Tai Suan claim that Tai Siang had already sold his one quarter share of the property. They have documents to show that, in 1985, Tai Siang had sold it to them for a sum of $200,000.
Tai Tong and Tai Suan also alleged that Tai Siang had waited until the death of their mother in April, before taking legal action. This is to prevent the possibility of their mother refuting Tai Siang’s claim.
The case is still ongoing.
Some lessons we can pick up from this incident:
1. Look in the long term when it comes to property values
The $16 million estate was divided into four even parts (approximate value is $4 million each.)
In 1985, Tai Siang sold his quarter for just $200,000. Assuming this was the correct valuation at that point in time, that’s a 1,900 per cent increase in 30 years. Usually, the only kind of “investment” that can beat that involves pills you smuggle through an airport.
Granted, we can’t count on a similar performance by every property (we have to factor in things like the land space being freakishly large, its freehold nature, etc.) But the numbers still speak for themselves: Singapore property is wildly rewarding when held on to in the long term. Children who inherit from their parents shouldn’t be too quick to sell, regardless of how good the market may seem at the time.
2. Get everything in writing, especially when dealing with family members
Things get a bit messy when deals are made within a family. In this case, there are documents to show that an agreement was made for the $200,000. But even then, the dispute is still happening.
Now imagine how bad things get if there’s no documentation.
When a family member makes this kind of deal (e.g. giving up their share of a house for immediate payment), there may be some temptation to do things “off the record,” or with another family member as a witness.
That’s clearly not a good idea – in this case, for example, the mother of the four brothers is no longer around to substantiate or refute any claims.
Even if the witness is still around, it’s a traumatic experience to take the side of one family member over another in court.
So to make things simple, put everything in writing. And have the right legal professional oversee everything, rather than use another family member.
3. As a last resort, you may just want to leave in cash
This isn’t always possible of course (especially if your spouse is still living there.) But if you suspect this kind of quarrel is likely, divvying up your inheritance in cash can be a lot neater than dividing up the house.
For example, say you divide the house between your three children. What happens if one wants to sell, another one doesn’t, and the third one just refuses to get involved? And this isn’t even getting into issues like property taxes, which are going to end up at your beneficiaries’ collective doorstep.
You’ll want to find a professional wealth manager (someone whom you’re also comfortable disclosing potential family conflicts to), so they can recommend alternatives to splitting up home ownership.
Your property should benefit your family, not tear rifts between them
Property can swing between being an asset, to being a liability. Most investors already know that. But look beyond the dollars: without proper estate planning, your property is only going to be asset to your children’s lawyers.
That being said, you don’t want to leave them with a zinc roofed hut either. Check out some of Singapore’s better property listings on 99.co right now, and build a legacy for your children.