Another Legal Woe for PropNex Realty

PropNex Realty is once again in hot water as one of its units faces a second lawsuit involving the contentious 99-to-1 property transaction structure. An Indonesian couple has filed a suit claiming nearly S$850,000 against the mainboard-listed company's subsidiary, a case that follows a similar legal battle reported in early 2025.

The 99-to-1 Scheme Under Scrutiny

The couple, Kevin Rahim and Jessica Tjitra, allege that PropNex salesperson Amos Koh misled them into believing that the 99-to-1 arrangement—a tactic aimed at avoiding the Additional Buyer’s Stamp Duty (ABSD) on property purchases—was both legal and advisable. Their suit follows a previous claim where PropNex is involved in a noteworthy S$1.2 million lawsuit over analogous claims.

A Costly Misstep?

In a striking turn of events, Tjitra purchased a S$3.3 million apartment in Riviere in July 2022 after securing her Singapore permanent residency. She later sold 1 percent of the property to her fiancé, Rahim, for a mere S$32,920. However, the Inland Revenue Authority of Singapore (IRAS) soon notified the couple that their arrangement would not fly. They were hit with a staggering 30 percent ABSD on the entire purchase price and an additional surcharge, claiming illegal stamp duty avoidance.

Allegations of Negligence and Misrepresentation

The couple accused Koh of failing to accurately represent the legality of their transaction, stating that he was aware they relied on his guidance for structuring their purchase. They argue that PropNex Realty neglected their duty of care by allowing Koh—whose knowledge of laws and regulations they deemed insufficient—to provide misleading advice.

Legal Responsibilities in Question

The couple's claims extend to CK Tan Law Corporation, alleging that the law firm also failed to ensure the legality of the 99-to-1 arrangement. The claimants contend that the firm did not advise them on potential legal implications during the transaction.

The Defense Stands Firm

In its defense, PropNex asserts that Koh was not the official salesperson for the couple, highlighting that no estate agency agreement was established, nor did he receive any commission from the couple. PropNex insists Koh acted as an independent contractor and complied with all regulations set forth by the agency and the Council for Estate Agencies.

CK Tan Law Challenges the Claims

CK Tan Law has also fired back, suggesting the couple requested the 99-to-1 structure themselves and did not inquire about tax implications. They argue that the IRAS's actions do not render their arrangement illegal, as the imposition of a surcharge only highlights the complexity of such deals.

What’s Next?

The next chapter for this legal saga is set for a case conference on April 30, while mediation efforts continue for the earlier S$1.2 million lawsuit against PropNex. As the situation unfolds, it serves as a stark reminder of the complexities involved in property transactions and the potential pitfalls of unconventional financing methods.