Sale of Uncompleted Private Properties

Question 1

what is the name of the act that governs the sale of private properties?

Answer 1

Housing Developers (control & licensing) Act
- does not apply to JTC and HDB

Question 2

who is considered a housing developer and what would they need from whom to build a project?

Answer 2

• developing more than 4 units = need a housing developer’s licence from the Controller of Housing

Question 3

what are the 2 kinds of licences and their differences??

Answer 3

Sale and no sale licence.

Sale licence = can begin selling after obtaining building plan approval
no sale licence = can only sell after TOP obtained

Question 4

TOP stands for..

Answer 4

Temporary Occupation Permit

Question 5

what is a project account? [4]

Answer 5

• account created to safeguard investors’ money
• all monies received in the PA
• Account managed by bank as stakeholder
• Developer can only withdraw profits upon TOP

Question 6

can the OTP and S&P agreement be customised to meet client’s needs?

Answer 6

no, even by mutual agreement between buyer and developer.

UNLESS approval given by Controller of Housing

Question 7

procedure for sale of uncompleted private property

Answer 7

1. buyer pays 5% booking fee in cash to get OTP
2. Dev has 14 days to deliver S&P
3. Within 3 weeks, if buyer does not exercise option, dev forfeits 25% of the 5% and returns 75%.
4. if exercised within 3 weeks, buyer to pay 20% of purchase price less booking fee, and BSD
5. If buyer changes mind after exercising OTP, dev forfeits 20% deposit.
6. If not, commence progressive payment

Question 8

upon what will 25% of the payment be released to developer?

Answer 8

TOP

Question 9

last payment of ___% will be released to developer upon CSC

Answer 9

15%

Question 10

what is CSC?

Answer 10

certificate of statutory completion

Question 11

how is the 15% upon CSC distributed?

Answer 11

• 2% upon legal completion (title handed over to buyer)
• 13% held by Singapore Law Academy (SAL) as stakeholder
  under this 13%, 8% released upon CSC, 5% will be held until 12 months after TOP (DLP)

Question 12

what is DLP?

Answer 12

Defects Liability Period

after TOP, buyers have 12 months to claim from developer any faults or defects in the property.

Question 13

How long does the developer have to respond and commence works during the DLP?

Answer 13

14 days to respond, 1 month to commence rectification

Question 14

what happens if project is not completed by TOP?

Answer 14

Developer to pay 8% p.a. interest on total instalments paid by buyer as liquidated damages

Question 15

how long does the developer have to deliver the keys to the buyer after receiving payment upon issue of TOP?

Answer 15

3 weeks

Question 16

how long does developer have to ensure legal completion before they have to pay liquidated damages?

Answer 16

3 years from TOP or due date specified in S&P, whichever is earlier

Question 17

when will developers have to compensate buyers for a shortfall in floor area?

Answer 17

only when the shortfall is in excess of 3%

Question 18

what were the amendments made to the Housing Developers (Control & Licensing) Act? [11]

Answer 18

1. mandatory info to be given to intending home buyers
2. Track record of developer
3. Homebuyer consent required for changes to housing unit
4. controls on advertisements extended to those on websites
5. ensuring accurate display of show flats
6. providing more comprehensive and timely info to public
7. enhancing governance of developers
8. Increasing the penalties for offences
9. Weekly collection and publication of transaction data
10. More comprehensive info in transaction documents
11. ensuring the accuracy of show units

Question 19

what do developers have to provide and attain a written acknowledgment from buyers that they have received? [3]

Answer 19

particulars, dimensions, information

Question 20

how long does the buyer have to pay payment upon TOP?

what happens if they are not able to pay in time?

Answer 20

14 days upon receipt of notice.

After 14 days, buyers liable to pay 2% p.a. interest above the base rate charged by local banks.
Developer may give a Notice in writing to buyer that gives them another 21 days to make the payment. otherwise, dev can consider contract as repudiated, can resell the property, and forfeit 20% of the purchase price

Question 21

sub sale process

Answer 21

A pays option fee, exercises OTP, signs S&P, pays BSD. Sells to B, B’s lawyer to ask dev to issue new S&P, B signs S&P with dev.

any difference in amount will be paid to A in cash

Question 22

During the sub-sale process, why does the initial buyer have to exercise the option before selling to another?

Answer 22

because the S&P does not include the clause ‘and or nominee’

Question 23

can the developer refuse the sub sale assignment?

Answer 23

no

Question 24

Which Act controls foreign ownership of land in Singapore?

Answer 24

Residential Property Act

Question 25

what happens if a developer has a foreign shareholder?

Answer 25

the developer must obtain a Qualifying Certificate.

they are required to complete the project in 5 years, and 2 years from TOP to sell all units.

Question 26

when does the housing developer’s license cease? [2]

Answer 26

1. when CSC is issues

2. when Certificate of Titles or SSCTs are issued

Question 27

Difference between sale of uncompleted residential and commercial properties? [6]

Answer 27

option fee: min 5% vs no min, max 10%

refund of option fee: 75% vs 50%

project account: compulsory vs not compulsory but encouraged

DLP: 5% vs 8%

License: required vs not required

Advertisements: regulated by Housing Developers Act vs no rules passed