Homeowners in debt to illegal lenders often sell properties below market value to settle obligations quickly
PETALING JAYA: Malaysian homeowners caught in debt traps with illegal moneylenders (Ah Long) frequently resort to selling their properties at reduced prices to clear outstanding obligations swiftly, a veteran property agent has revealed.
Real estate negotiator Wahida Wahid, who has 46 years of experience, explained that abandoned homes connected to such debt cases aren’t related to supernatural-related causes but instead attract persistent creditor harassment targeting previous owners.
“The lender’s involvement centers solely on debt recovery from the former property owner,” Wahida explained in a recent interview.
She noted that some lenders operate with registration credentials, enabling them to formally register caveats against property titles through legal channels.
“When their details appear on land documentation, the debt obligation becomes officially recorded,” she stated.
This transparency means potential purchasers discover during transactions that creditors are actively pursuing the previous owner. Often, sellers remain in residence while marketing their homes.
Upon completing the sale and clearing the bank mortgage, legal representatives distribute the funds, which may include payments to registered creditors who have placed caveats on the title.
“Borrowers face continued pursuit until debts are fully discharged,” Wahida observed, noting that creditors frequently await property sales to collect what they’re owed and conclude the matter.
The pressure to sell quickly typically prevents owners from achieving optimal market prices.
“Sellers under time constraints generally must lower their asking prices, either accepting investor offers or allowing agents to market the property at discounted rates,” she said.
Wahida emphasised that property owners commonly absorb financial losses but have limited alternatives, as they must settle not only moneylender debts but also accumulated charges including maintenance fees, quit rent, and assessment rates.
“Those obligations remain regardless of the circumstances,” she concluded.
