Sale of Uncompleted Private Properties Flashcards
what is the name of the act that governs the sale of private properties?
Housing Developers (control & licensing) Act - does not apply to JTC and HDB
who is considered a housing developer and what would they need from whom to build a project?
- developing more than 4 units = need a housing developer’s licence from the Controller of Housing
what are the 2 kinds of licences and their differences??
Sale and no sale licence.
Sale licence = can begin selling after obtaining building plan approval
no sale licence = can only sell after TOP obtained
TOP stands for..
Temporary Occupation Permit
what is a project account? [4]
- 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
can the OTP and S&P agreement be customised to meet client’s needs?
no, even by mutual agreement between buyer and developer.
UNLESS approval given by Controller of Housing
procedure for sale of uncompleted private property
- buyer pays 5% booking fee in cash to get OTP
- Dev has 14 days to deliver S&P
- Within 3 weeks, if buyer does not exercise option, dev forfeits 25% of the 5% and returns 75%.
- if exercised within 3 weeks, buyer to pay 20% of purchase price less booking fee, and BSD
- If buyer changes mind after exercising OTP, dev forfeits 20% deposit.
- If not, commence progressive payment
upon what will 25% of the payment be released to developer?
TOP
last payment of ___% will be released to developer upon CSC
15%
what is CSC?
certificate of statutory completion
how is the 15% upon CSC distributed?
- 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)
what is DLP?
Defects Liability Period
after TOP, buyers have 12 months to claim from developer any faults or defects in the property.
How long does the developer have to respond and commence works during the DLP?
14 days to respond, 1 month to commence rectification
what happens if project is not completed by TOP?
Developer to pay 8% p.a. interest on total instalments paid by buyer as liquidated damages
how long does the developer have to deliver the keys to the buyer after receiving payment upon issue of TOP?
3 weeks
how long does developer have to ensure legal completion before they have to pay liquidated damages?
3 years from TOP or due date specified in S&P, whichever is earlier
when will developers have to compensate buyers for a shortfall in floor area?
only when the shortfall is in excess of 3%
what were the amendments made to the Housing Developers (Control & Licensing) Act? [11]
- mandatory info to be given to intending home buyers
- Track record of developer
- Homebuyer consent required for changes to housing unit
- controls on advertisements extended to those on websites
- ensuring accurate display of show flats
- providing more comprehensive and timely info to public
- enhancing governance of developers
- Increasing the penalties for offences
- Weekly collection and publication of transaction data
- More comprehensive info in transaction documents
- ensuring the accuracy of show units
what do developers have to provide and attain a written acknowledgment from buyers that they have received? [3]
particulars, dimensions, information
how long does the buyer have to pay payment upon TOP?
what happens if they are not able to pay in time?
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
sub sale process
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
During the sub-sale process, why does the initial buyer have to exercise the option before selling to another?
because the S&P does not include the clause ‘and or nominee’
can the developer refuse the sub sale assignment?
no
Which Act controls foreign ownership of land in Singapore?
Residential Property Act
what happens if a developer has a foreign shareholder?
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.
when does the housing developer’s license cease? [2]
- when CSC is issues
2. when Certificate of Titles or SSCTs are issued
Difference between sale of uncompleted residential and commercial properties? [6]
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
