ABU DHABI // Grace Princesa, the Philippine ambassador to the UAE, cautioned her compatriots against investing in property on a whim, warning them to be more prudent in their spending plans.
“I urge my fellow Filipinos to be very careful,” she said. “We know many of you aspire to buy and own a home, but let’s not be blinded by that dream.”
The property dream turned into a nightmare for Aldo Magaspar, who was excited at the prospect of moving into a new three-bedroom home in Cavite City, south of Manila last year.
But the Filipino now finds himself in dispute with the real estate agency that sold him the 1.065 million peso (Dh89,797) property two years ago.
“I never imagined this would happen to me after more than a year of paying off the monthly equity,” said Mr Magaspar, 35, a cargo assistant at Sharjah airport, who has worked in the UAE for five years. “All my hard-earned money had all gone to waste.”
He had paid a reservation fee of 10,000 pesos (Dh843) to secure the three-bedroom unit on a pre-selling phase. The contract required him to pay a monthly equity of 8,133 pesos (Dh686) in 15 months. By the 18th month, in December last year, he was promised that he and his wife Elizabeth would have the keys to their new home. The next step was payment of a monthly amortisation of 12,700 pesos (Dh1,070) within 10 years.
In July last year, he flew to Manila to meet the agent for an update on the property.
“At that time, I was told there would be some alterations made on the plot and a remapping of the proposed village would be carried out,” he said. “They assured me that the unit would be handed over to me by December or at the latest by January this year.”
He agreed to sign some documents. By October 5, 2013 he had finally paid off the monthly equity.
“I inquired about the property but they did not reply to any of my emails until I decided to check it out myself with the developer,” he said.
In May (this year), he followed up on the delivery status of the property.
“It was meant to be a surprise visit,” he said. “I wanted to visit the site but they refused, saying that construction was ongoing. When I insisted and threatened to take legal action, they eventually agreed but didn’t provide me with a date for the handover.”
Mr Magaspar has since decided to back out and cancel the contract, and ask for a refund.
“I’ve paid a total of 130,000,” he said. “I’ll be happy if they return half of that amount.”
But the agency was not amenable to a refund, saying the cancellation of the contract was voluntary on his part.
“I think this serves as a painful lesson for me and other Filipinos,” Mr Magaspar said. “We should learn not to trust agents and do our own research and background checks. My wife only got to know about this agent through Facebook.”
While Mr Magaspar, who earns more than Dh5,000 a month, was financially able to buy property, others have been lured into investment schemes without being able to afford it.
“I remember the case of a Filipina who was advised by her agent to make a cash advance from her credit card so she could invest in a condominium unit,” said Michael Almazar, 32, director of the commercial department at Gulf Law in the Middle East, the UK and in the Philippines.
“She was enticed by the proposition that the property would ‘pay for itself’ once she rents it out. But the property could only be rented out in five years. In the meantime, she did not have money to pay for the cash advance used to reserve the unit and for the succeeding monthly amortisation.”
Ms Princesa appealed to real estate agencies to properly screen their applicants and not to sell property to those who could not afford it.
“I would like to thank them for helping Filipinos to realise their dreams, but then they should not be driven by profit alone,” she said.
“They should sit down with their clients and spend some time crunching the numbers.”
Mr Almazar meanwhile advised those who intend to buy a home or invest in property to carefully check the small print of their contracts.
“They should not be swayed by the colourful marketing brochures and video presentations showcasing the proposed development,” he said. “Their agent should be able to explain to them the terms of the purchase, such as the delivery and turnover date, and additional costs, such as transfer fees.
“Buyers are always positive they will be able to adhere to the payment schedule. However, they should also be aware of the consequences in case of the unlikely circumstance of default. Will they be entitled to a refund?”