Cash-strapped dad sold his kids' $2.4m trust properties

He told court he could not service mortgage payments and also feared losing his job

- Tan Ooi Boon

A man bought two properties totaling $2.4 million that were held in trust for his two young children but found himself in a bind a few years later when he could not keep up with the mortgage payments.

So he had to apply for a High Court order to sell the apartments. The court eventually approved the sale but instructed him to deposit the proceeds in trust accounts that would benefit his kids only.

At its most basic, the case provides compelling lessons on the risks of borrowing too much to buy property. Besides the loan on the family home, which was being serviced with cash and CPF money, the father also had to foot the mortgage payments on the two trust properties.

The first property, which was bought for the eight-year-old daughter's benefit, was purchased at $1,434,000 and it had an outstanding loan of $645,300. The second property, which was for the 13-year-old son, was bought at $975,000 and it still had an outstanding mortgage of $438,750.

The father, whose occupation and monthly salary were not disclosed in court, wanted to sell the trust properties because he faced uncertain job prospects. Some of his colleagues had been laid off and he feared he might join them on the chopping block.

With his savings "fast dwindling", he worried that he might not be able to keep paying the loans on his kids' properties. He also noted that his elderly parents needed his financial support.

In view of these financial demands and uncertainty arising from his employment, he told the court that it would be prudent, and in the interest of the children, to sell the properties.

To support his application for a sale, he proposed to keep the net sale proceeds of the two properties in trust accounts for the daughter and son.