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Singapore Property Kaki

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Capitol Singapore Lands In Controversy Again

The Straits Times reported that Russian tycoon – Mr Sergey Vbornov is suing the developer of Eden Residences Capitol Singapore (a JV between Perennial and Pontiac) for the return of more than S$10 million that he paid for a 314 sqm unit in the project. He claims that the unit is “unfit for habitation and does not comply with the promised luxury standard”, nor did it live up to the idea of “paradise found”, as allegedly marketed.

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Capitol Singapore – A development marred by controversies and lawsuits

This lawsuit probably brings the level of controversy at Capital Singapore to another level. Things hadn’t been that smooth sailing for the consortium developers. Faced with internal fights between shareholders, delay in the opening of the 6-star Patina Hotel, weak shopper traffic, this lawsuit adds on to the list of issues that the developer is facing.

It is a pity that one of the most iconic places in the history of Singapore has turned into such a sorry state without fulling its fullest potential. This might have put a black mark on the sterling track records of industry veteran – Mr Pua Seck Guan, who is also the CEO of Perennial.

Probably not the best way to defend a case?

Lawyers from A&G, who were defending the developer, claimed that the unit was not sold under the agreement as a “luxurious apartment” and/or “paradise found”. Well, technically, A&G is correct as probably no developer would put in its SPA such ambiguous and open-end claims that could potentially result in liabilities in future. In addition, developers would have put a lot of disclaimers in fine prints in their sales brochures to disclaim against whatever that is being shown in the brochures.

Looks like it is a tough case for the buyer to fight using his argument. But if his intention is to damage the developer’s reputation, he might have succeeded. This would also serve as a good reminder to all buyers to take what you read or see on sales brochures with many pinches of salt.

Whilst A&G is probably correct in their argument, SPK thinks the argument could have a negative impact on the developer’s businesses and reputation in future. Are they telling people not to believe what they put in their marketing brochures? Are they telling people that a S$3,000 psf apartment is not necessarily a “luxurious apartment”? If a S$3,000 psf apartment isn’t a “luxurious apartment”, then what could it be? A mass market apartment?

They might succeed in winning the case, but what about the developer’s reputation? A case of winning the battle but losing the war?

Quality of Development is the heart of the issue

Without in-depth knowledge of this case, it is difficult to ascertain which party is right or wrong, or what kind of misunderstanding might have happened in between. Was it a case of poor workmanship? Is the buyer unreasonable? We will probably find out more when the case goes to trial next year.

But once again, this case highlights the critical issue of quality of developments, which is something that SPK brought up in his earlier post (“Are Singaporean property buyers discerning enough?”).

Let’s hope that Capitol Singapore can shed away all the negative publicities one day and return back to its former glory soon!

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