S'pore court rules mum's contribution of over S$1 million to daughter's house is a loan, not ownership stake

A woman in Singapore has been ruled to have no beneficial ownership over her daughter's S$2.4 million landed property, after a court determined that the sum of over S$1 million she contributed towards the purchase was a loan, and not an investment entitling her to a stake in the property.

According to a judgement paper made available online, the case arose after the woman's daughter, Hajjah Noor Jehan Binte Mohamed Ghouse, filed for divorce in September 2024.

Fearing the Wak Hassan Drive property in Sembawang could be carved up in matrimonial asset proceedings, the mother, Nur Fairuz Magnus, sought a court declaration that she held a beneficial interest in the home.

Background to the case

Noor Jehan purchased the landed home sometime between late 2018 and early January 2019, before getting married in February 2019.

The couple lived there with Noor Jehan's parents and grandmother.

On Sep. 12, 2024, Noor Jehan filed for divorce proceedings and her husband has since lived with his parents.

The following month, on Oct. 3, 2024, Nur Fairuz filed an application to protect her financial interest in the property, citing her contribution of S$1,020,378 towards the purchase price.

She said she had agreed to lend her daughter the money as Noor Jehan did not have the financial means to purchase the property.

Nur Fairuz presented a handwritten note in court indicating that both parties had agreed sale proceeds would be split according to their respective financial contributions.

The pair also signed a document in August 2024 titled "Loan Agreement", which outlined repayment obligations upon a sale or refinancing of the property.

Not included in the agreement

According to the judgement paper, nothing in the agreement referred to Nur Fairuz having beneficial ownership or any type of beneficial interest in the property.

Nur Fairuz had initially intended to co-purchase the property with her daughter, but withdrew her name in December 2018.

She cited sentimental attachment to her existing Bedok flat as one reason, and a prior undertaking to remain within the same housing estate as her other daughter during the latter's HDB Minimum Occupation Period.

During proceedings, Noor Jehan's estranged husband — who participated as a non-party — argued that Nur Fairuz's decision to withdraw her name from the property purchase was motivated by a desire to avoid paying Additional Buyer's Stamp Duty (ABSD).

He urged the court to rule against her on grounds of illegality.

She later clarified in court that the ABSD implications had not factored into her original decision, and that she had no intention of deceiving the Inland Revenue Authority of Singapore (IRAS).

Court's findings

The judge found that the agreement between mother and daughter was, in substance, a loan arrangement.

Nothing in the signed agreement referenced any beneficial ownership or proprietary interest in the property for Nur Fairuz.

The court ruled that should the property be sold, proceeds would be distributed in proportion to each party's cash contributions.

However, if the divorce court determines the property to be a matrimonial asset subject to division, Noor Jehan would be required to repay her mother's loan from her allocated share.

The judge noted that since Nur Fairuz's application had ultimately failed to establish a beneficial interest in the property, costs should follow the outcome.

The court ordered her to pay S$15,000 in legal costs, inclusive of disbursements, to the non-party.

Nur Fairuz has since filed an appeal against the ruling.

Top photo from Google Street View (for illustration purposes only)