Singapore property knowledge database

Uncompleted residential properties are those sold directly by licensed housing developers that are licensed by the Controller of Housing Act (COH).

At the point of sale, the construction of the project may or may not have commenced.

The purchasers generally make their buying decisions based on developer’s brochure, floor plan, project models and mock up show units.

All Purchaser(s) must be 21 and above.

If you own a HDB flat, a DBSS flat or an Executive Condominium, you may want to verify with HDB whether you have fulfilled the minimum occupation period before you buy any private residential properties.

Foreign Persons (including Singapore Permanent Residents) will need to get approval from the Controller of Residential Property and the Singapore Land Authority, before you can buy landed houses or strata landed houses.

URA provides free information on the property market, such as:

• Prices of Private Residential Units Sold by Developers.
• Private Residential Property Transactions with Caveats Lodged.
• Rental Contracts of Private Residential Properties.
• Private Residential Projects in the Pipeline.

At the point of viewing the showflat, a home buyer ought to note that there could be modifications between the showflat and the actual unit that will be built.

For instance, a few walls may not be built at the showflat to enable visitor traffic or to show several interior design potentials. Some of the fittings in the showflat might likewise not be given in the actual unit.

In the event that there are furniture decks or lofts in the showflat, you ought to check with the developer if these will be built in the actual unit, and whether an additional payment is required for their construction.

You ought to likewise note that a home owner must attain approval from the Building and Construction Authority (BCA) if he wishes to build a loft or furniture deck that exceeds 5 square metres. In addition, you ought to note that normally, only one loft or furniture deck is permitted in a residential unit.

A home buyer ought to confirm whether the developer is holding a sale or no-sale licence.

Developers who have been granted no-sale licences are not permitted to sell any residential unit in an uncompleted development.

Additionally, developers need to obtain building plan approval before beginning sale.

Before accepting the booking fee, developers are required to give the following information on the property to home buyers:

• Scaled location plan, site plan and unit floor plan;
• Breakdown in floor area for strata-titled properties, e.g. area of bedroom, balconies, air-conditioner ledges and void areas;
• Specifications of the building, e.g. floor materials;
• Conditions and restrictions imposed by the authorities. Some projects may be affected by public schemes such as drainage reserves, road reserves, sewage pipes, electrical cables, etc. There may be special conditions imposed by the relevant authorities in relation to these public schemes;
• Amendments to the Sale and Purchase Agreement, which set out any special conditions relating to the sale and purchase;
• Past projects completed by the developer or its related companies.

You ought to check the information cautiously to guarantee that the property which you aim to buy meets your needs before paying the booking fee.

You ought to confirm that the property you plan to purchase is approved for residential use.

While some developers may advertise their properties as “small office home office” (SOHO), you should take note that residential properties are normally approved for residential use only.

If you wish to use your property as a home office, it will be subjected to conditions, for example, not employing more than two non-resident employees.

If the property you plan to buy is approved for office use, please note that the property is not permitted to be used for both office and residential use.

Thus, a home buyer should deliberate carefully whether to continue with the purchase taking into account your planned use of the property.

Some developments may have fewer car parking lots than the total number of units. Therefore, not all the owners in such a development will have the utilization of a car parking lot.

You ought to verify with the developer on the total number of units and number of car parking lots in the development. In addition, you ought to check the kind of parking lots provided, for instance, surfaced parking lots, mechanical parking lots or handicapped lots.

An Option to Purchase is a right given by the developer of a property to an intending buyer to buy the property at a specified price within a specified period of time (the validity period of the option).

A licensed housing developer is required to use the standard form of Option to Purchase when selling units in a residential project.

It is mandatory for the developer to seek approval from the Controller of Housing for any change to be made to the standard Option to Purchase.

The standard Option to Purchase cannot be modified even by mutual agreement between the buyer and developer unless approval is given by the Controller of Housing.

The booking fee for an Option to Purchase is between 5% and 10% (usually 5%) of the purchase.

A booking fee of 5% of the purchase price payable by cheque to developer’s Project Account in exchange for the Option To Purchase whereby the developer is not allowed to sell the property to another 3rd party before the expiry of the Option To Purchase.

Cheques cannot be postdated and must be based on the Option date or earlier.

You are not allowed to assign or transfer the Option to Purchase that has been granted to you by the developer to any other persons.

Thus, you need to confirm that all persons who are planning to buy the housing unit are correctly identified and named as the 'intending purchasers' in the Option to Purchase.

All intending purchasers must be named in the Option.

Only the intending purchasers named in the Option to Purchase may exercise the option and sign the Sale & Purchase Agreement for the property as purchasers.

After an Option has been granted, the Controller's approval has to be attained for any change of name in the Option.

If you are granted an Option to Purchase, the developer is obligated within 14 days from the date of the Option, to deliver the Sale & Purchase Agreement and the original or copies of the title deeds to you or your lawyer for review.

The option is valid for 3 weeks from the date of delivery to you or your lawyer of these documents.

If the intending purchaser decides to buy the property, he has to exercise the Option to Purchase within its validity period.

The intending purchaser may exercise the Option to Purchase by performing all of the following within the 3 weeks validity period:

• Sign all the copies of the Sale and Purchase Agreement;
• Return all copies of the signed Agreement to the developer; and
• Pay to the developer the balance down payment (i.e. 20% of the purchase price less the booking fee paid).

Instead of the 3 weeks mentioned above, the developer may allow purchasers to pay the balance down payment within 8 weeks from the Option date.

The developer will be entitled to forfeit 25% of the booking fee, whether the payment for the booking fee has been made (e.g. cheque bounced) if the Option to Purchase is not exercised before it expires.

The other 75% of the booking fee will be refunded to the purchaser.

Subsequently, the developer can sell the property to any other interested buyer.

You ought to note that the expected vacant possession date is an estimated date and actual delivery of vacant possession may happen before or after the vacant possession date.

The developer is contractually bound to deliver vacant possession of the property to the buyer by the date stated in the Option to Purchase and Sale & Purchase Agreement, failing which, the developer has to pay liquidated damages to the buyer.

After the issue of the Temporary Occupation Permit (TOP) for the project, delivery of vacant possession will happen.

In addition, Developers or their appointed salespersons may occasionally give an “estimated TOP date” to buyers, which is estimated based on the planned construction schedule.

Buyers should take into deliberation that the actual TOP date may differ, reliant on the progress of the construction of the project.

A Sale & Purchase Agreement is a private contract between the developer and the purchaser for the sale and purchase of a property. Licensed housing developers are required to use the standard form of Sale & Purchase Agreement in the sale of the units in a housing project.

The kind of materials, finishes, fittings, appliances, furnishings, etc. to be utilized for a unit and the common property are set out in the "Specifications of the Building" in the Sale & Purchase Agreement.

You ought to get a written confirmation from the developer if there are any other items offered by the developer which are not stated in the specifications, e.g. free washing machine, cooker, etc.

The developer is obligated to build the unit together with all the common property, if any, in a good and workmanlike manner according to the specifications set out in the Sale & Purchase Agreement and the plans approved by the Commissioner of Building Control and other relevant authorities.

The developer has to inform you before making any substantive modifications to the approved plans concerning to the common property and can only continue with the changes if there is no objection in writing from you within 21 days after the notice.

A buyer of a unit in a strata-titled housing project (includes apartments, condominiums and strata landed housing with common property) ought to note the share value that has been allocated to the unit in relation to the whole housing development.

The share value of a unit regulates a buyer's share in the housing development and is used to calculate his share of contribution for the recurring maintenance fees and charges for the common property.

The buyer must guarantee that all payments due to the developer are made promptly according to the payment schedule in the Sale & Purchase Agreement.

As and when the developer finishes the different stages of construction of the development, instalment payments of the purchase price have to be made.

If any amount of the purchase price due is not paid by the deadline specified in the payment schedule of the Sale & Purchase Agreement, the buyer will be accountable to pay interest in agreement with the formula set out in the Sale & Purchase Agreement.

The developer has the right to treat the Sale & Purchase Agreement as having been repudiated by the buyer and may take steps as specified in the Agreement to annul the Sale & Purchase Agreement if any payment of the purchase price and interest remains unpaid for more than 14 days after it is due.

Once the Sale & Purchase Agreement is annulled, the developer has the right to forfeit 20% of the purchase price, recuperate all outstanding interest owing and unpaid by the buyer, and to resell the unit to any possible buyer or otherwise dispose of it.

If the buyer wants to sub-sell the unit after signing the Sale & Purchase Agreement and the sale of the unit has not been completed, the buyer will have to inform the developer of the planned sub-sale.

The developer will, at the request of the sub-buyer, enter into a new Sale & Purchase Agreement with the sub-buyer on such terms and conditions as shall place the developer and the sub-buyer in the same position as if the sub-buyer were the original buyer in the original Sale & Purchase Agreement.

When the developer is ready to hand over the unit, the developer will issue a Notice of Vacant Possession to the purchaser.The developer is required to deliver vacant possession of the unit to the purchaser no later than:

• The date as specified in the Sale & Purchase Agreement;
• 21 days from the date of receipt from the purchaser the payment of 25% of the purchase price. This payment is due when Temporary Occupation Permit has been issued, and the roads, drainage and sewerage works serving the housing project have been completed (item 3 of the payment schedule).

The developer is liable to pay liquidated damages to the buyer, if he/she is unable to deliver vacant possession by the above dates.

Buyer ought to note that the expected vacant possession date in the Sale & Purchase Agreement is an estimated date and actual delivery of vacant possession may happen before or after the vacant possession date.

Upon taking vacant possession, you ought to do a thorough inspection of the unit to ensure there are no defects.

Under the Sale & Purchase Agreement, the term "defect" means any fault in the unit which is due either to defective workmanship or materials or to the unit not having been constructed according to the Specifications set out in the Sale and Purchase Agreement.

For units in a strata-subdivided housing development, the term "defect" in the Sale & Purchase Agreement also covers defects in the common property and housing development.

You are advised to seek clarifications from the developer or seek professional advice if you are unsure whether there are defects in the unit, the common property or housing development.

The developer is obligated to rectify any defect in the unit, the common property or the housing development which becomes clear within a period of 12 months from:

• The date the developer actually delivers vacant possession of the unit to the purchaser; or
• The 15th day after the purchaser receives notice that the Temporary Occupation Permit has been issued and that the roads, drainage and sewerage works serving the housing project have been completed, whichever is earlier.

If the buyer discovers defects at any time during the defects liability period, he/she should follow the procedure set out in the Sale & Purchase Agreement to get the developer to rectify the defects.

When defects are found, buyers should:

1. Specify the details of the defect in writing and request the developer to make good the defect.
2. Request for a joint inspect of the defect with the developer (optional) but, in any event, the developer should carry out the necessary repairs within one month of receiving notice of the defect from the purchaser.
3. Notify the developer in writing that you wish to engage another party to rectify the defect and provide the estimated cost for the rectification works if the developer fails to rectify the defect within one month. You should obtain a written quotation of the estimated cost.
4. Include only the defect which you have informed the developer in the notification. Follow step 1 of this process if any new defect is found.
5. Allow the developer an opportunity to carry out the rectification works.
6. Carry out the repairs and claim for the cost and expense of the repairs from the developer only if it fails to rectify the defect within 1 month after the date of notification in step 3.

To ensure that the rectification works are carried out smoothly, the buyer should take note of the following:

• Be specific on the defects which the developer is requested to rectify.
• Be present for the appointments with the developer or contractors.
• Inform the developer before-hand if any new defects which have not been mentioned in the original notification, are to be discussed.
• Ensure that the affected areas are free from obstruction like furniture and appliances to facilitate the rectification work and prevent damage to your belongings.

The buyer and the developer should acknowledge and agree in writing to the list of defects that have been rectified.

Completion of the sale and purchase of a unit takes place when the developer conveys legal title of the unit to the purchaser.

When the developer is ready for the completion of sale, the developer will issue to the purchaser a Notice to Complete which must be given by the date specified in the Sale & Purchase Agreement or 3 years after the date of delivery of vacant possession of the unit, whichever is earlier.

After the purchaser receives the developer's Notice to Complete, completion must take place within 14 days. It is to take place at the office of the developer's lawyers.

On completion, the developer must execute a proper conveyance to the buyer of the unit and also hand over to the buyer a duplicate of the title to the unit, namely, the Duplicate Subsidiary Strata Certificate of Title (for strata subdivided property) or the Duplicate Certificate of Title (for non-strata subdivided property).

These certificates are official documents issued by the Registrar of Titles stating that the person named in the certificate is the legal owner of the property described in the certificate.

If the developer does not issue to the purchaser the Notice to Complete by the deadline specified in the Sale & Purchase Agreement, the buyer has a right to claim for liquidated damages according to the formula specified in the Sale & Purchase Agreement