{"id":290,"date":"2021-01-30T10:30:47","date_gmt":"2021-01-30T10:30:47","guid":{"rendered":"http:\/\/s2invest.com\/?p=290"},"modified":"2024-07-03T06:57:40","modified_gmt":"2024-07-03T06:57:40","slug":"judge-rules-bto-flat-to-be-priced-at-market-value-in-divorce-settlement","status":"publish","type":"post","link":"https:\/\/s2invest.com\/index.php\/2021\/01\/30\/judge-rules-bto-flat-to-be-priced-at-market-value-in-divorce-settlement\/","title":{"rendered":"Judge rules BTO flat to be priced at market value in divorce settlement"},"content":{"rendered":"\n

Recent matrimonial case proves seminal with landmark valuation judgment<\/em><\/p>\n\n\n\n

In UUV v UUU [2020] SGHCF 7<\/em>, High Court Judge\nTan Puay Boon ruled that a Yishun BTO property be sold at market value despite\nit not completing its five-year Minimum Occupation Period (MOP).<\/p>\n\n\n\n

A family court district judge back in 2018 ruled\nthat the wife be given the first option to buy out the husband\u2019s share of their\nflat as part of the matrimonial distribution of assets.<\/p>\n\n\n\n

The case was brought to the High Court as the wife\nattempted to get the husband to sell his shares based on the surrender value \u2013\na much lower amount than the market value. <\/p>\n\n\n\n

The flat                                                <\/strong><\/p>\n\n\n\n

The BTO flat at Fern Grove @ Yishun was bought jointly in the couple\u2019s name in August 2014 for $371,500, with a surrender value of $352,925 if the flat was to be handed over to HDB before its MOP of five years.  <\/p>\n\n\n\n

The husband\u2019s legal counsel noted that the flat had a certified market value of $545,500 in early 2020.<\/p>\n\n\n\n

The ruling<\/strong><\/p>\n\n\n\n

Despite the initial court verdict not compelling the\ncouple to sell the flat, the wife attempted to buy the husband\u2019s shares at the\nHDB mandated surrender value. <\/p>\n\n\n\n

Judge Tan disagreed as the wife would have an unfair\ngain in buying out at a lower amount than the market value.<\/p>\n\n\n\n

\u201cI accept the husband\u2019s argument that a valuation\nbased on the surrender value would result in a windfall to the wife,\u201d he said.<\/p>\n\n\n\n

He ruled that the valuation of the property should\nbe pegged to the market value of similar HDB properties in the vicinity to get\na more accurate indication of the real worth of the flat.<\/p>\n\n\n\n

\u201cThe surrender value would only be an accurate\nestimate of the flat\u2019s value if it was actually surrendered to the HDB, which\nis unlikely the case,\u201d Judge Tan explained. <\/p>\n\n\n\n

Also, he ordered that the flat\u2019s value should be\nbackdated to its market value in September 2018, when the couple\u2019s ancillary\nmatters were brought before the family court district judge. <\/p>\n\n\n\n

A seminal case in family law<\/strong><\/p>\n\n\n\n

The husband\u2019s legal counsel noted that the High\nCourt\u2019s decision is significant because it is \u201cthe first such ruling\u201d. <\/p>\n\n\n\n

The case clarified the appropriate method of valuing\nBTO flats with MOP obligations, she noted.<\/p>\n\n\n\n

\u201cBoth parties had been stuck as to the use of the\nmarket price or the purchase price, the surrender value being pegged at a\npercentage below the purchase price. The court\u2019s answer is the market price,\u201d\nshe said.<\/p>\n\n\n\n

This proves to be a landmark ruling in matrimonial cases in 2021 given the rise in divorce cases and an increase in demand for BTO flats.<\/p>\n\n\n\n

About Gifted\u00a0Group<\/strong><\/p>\n\n\n\n

Gifted Group is a corporate financial advisory firm that provides strategy advice, transaction structuring and valuation services. It has acted as Expert Valuation Witness to a number of matrimonial cases including \u00a0UTJ v UTK [2019] SGHCF 6, where it produced credible, fair and comprehensive assessments of the matters dealt with in its valuation reports. These valuation reports allowed the Court to arrive at a more just and equitable means of dividing matrimonial assets between the Parties. Other cases include: <\/p>\n\n\n\n