Lesson 13 Flashcards
1
Q
Who can become a Real Estate Developer in Singapore?
A
A housing developer can be:
a) A person
b) A group of persons or partnership
c) A society
d) A company
e) A limited liability partnership
1
Q
What is an Uncompleted Property?
A
An uncompleted property refers to a building under construction that has not yet received a Temporary Occupation Permit (TOP) or Certificate of Statutory Completion (CSC).
2
Q
Who cannot become a real estate developer?
A
Banks (e.g., DBS, OCBC, UOB, Hong Leong)
Insurers (e.g., AIA, Great Eastern, NTUC Income)
3
Q
What must a developer do to proceed with a property development?
A
They must appoint an Architect or Professional Engineer and apply for Planning Permission and Written Permission from the Urban Redevelopment Authority (URA).
4
Q
What types of properties can fall under building under construction?
A
- Residential
- Commercial / Industrial
5
Q
What is Planning Permission?
A
Planning permission is required for development and building works, including any changes to the use of premises.
6
Q
What type of applications fall under Development Application?
A
This application is for significant developments that require a detailed assessment by the planning authority.
7
Q
What does a Minor Development Application cover?
A
It includes applications for renovations to existing landed houses, demolition works, or earthworks.
8
Q
What is an Outline Application?
A
An outline application is a request for planning permission where only general details of the plan are provided, often used when the applicant seeks to establish whether a proposed development is likely to be permitted.
9
Q
What is the purpose of extending Planning Permission?
A
This application allows developers to request an extension for previously granted planning permission that may be about to expire.
10
Q
What does the Change of Use application involve?
A
This application is required when the intended use of a property is changing from one type to another (e.g., converting a residential property to commercial use).
11
Q
What types of property are regulated under the Housing Developers (Control and Licensing) Act?
A
The act covers both residential developments and commercial/industrial properties.
12
Q
How is “housing development” defined in the Housing Developers (Control and Licensing) Act?
A
Housing development refers to the business of:
a) Developing housing;
b) Providing money for developing or purchasing more than 4 units of housing;
c) A combination of both.
13
Q
What role does the Controller of Housing play in regulation?
A
The Controller issues licenses (Sale License or No Sales License) for housing developments, such as condominiums, apartments, executive condominiums, or mixed residential and commercial developments.
14
Q
What is the requirement before a developer can sell any lot?
A
The developer must file and have accepted a schedule of strata units with share values by the Commissioner of Buildings (BCA).
15
Q
What financial requirements must a developer fulfill according to the Act?
A
The developer must open a Project Account and maintain audited accounts.
16
Q
What is the timeframe for licensed housing developers to submit their audited accounts?
A
They must submit audited accounts to the Controller within 6 months.
17
Q
What sales information must developers report and to whom?
A
Developers must provide sales information on a weekly basis to the Urban Redevelopment Authority (URA) through the Developer Survey System.
18
Q
What activities are allowed for a Sale License Developer?
A
They can sell and construct properties.
19
Q
What is required from a Sale License Developer under the Building Control Act?
A
They must provide a Building Approval Plan.
20
Q
What must a Sale License Developer comply with regarding strata units?
A
They must have a Schedule of strata units accepted under the Building Maintenance and Strata Management Act.
21
Q
What activities are allowed for a No Sale License Developer?
A
They are allowed to construct properties but cannot sell until they obtain a Temporary Occupation Permit (TOP).
22
Q
What must a No Sale License Developer comply with regarding strata units?
A
Like Sale License Developers, they must also have a Schedule of strata units accepted under the Building Maintenance and Strata Management Act.
23
Q
What is the minimum capital paid-up requirement for a project with 50 units or fewer?
A
The minimum capital paid-up requirement is S$1 million.
24
What is the minimum capital paid-up requirement for a project with 51 to 200 units?
The minimum capital paid-up requirement is S$2 million.
25
How much capital is required for projects with 201 to 400 units?
The minimum capital paid-up requirement is S$3 million.
26
What is the requirement for projects with more than 400 units?
The minimum capital paid-up requirement is S$4 million.
27
What is one of the criteria related to the track record for developers?
Developers must have completed satisfactorily either a licensed residential project or a reasonably sized residential project overseas within the past 5 years.
28
How is the past track record used to determine the size of a new housing project?
The size of the new project must correspond to the developer's past project size (e.g., completing 10 or fewer units allows a new project of fewer than 50 units).
29
What must directors of a company applying for a Sale License ensure regarding bankruptcy?
Directors must not be un-discharged bankrupts.
30
What type of financial documentation is required for a Sale License application?
A copy of the latest audited accounts, verified by a statutory declaration.
31
What type of permission must be included in a Sale License application?
A valid provisional or written permission.
32
What letter is required from a financial institution when applying for a Sale License?
A letter confirming that a Project Account has been opened.
33
What financial guarantees can be provided instead of a Project Account letter?
A Banker's Guarantee or Insurer’s Guarantee equivalent to at least 140% of the total cost of construction for the project.
34
What additional certification is required alongside a financial guarantee?
A certification of the total cost of construction by the architect.
35
What standard contracts are Sale License Developers required to use?
1. Option to Purchase
2. Sales and Purchase Agreement
36
Who can be a No Sale License Developer?
1. Company
2. Group of persons
3. Partnership, Limited Partnership, or Limited Liability Partnership
4. Society
37
What must be verified in the application form for a group of persons applying for a No Sale License?
A copy of the agreement made between the group of persons, verified by a statutory declaration.
38
What documentation is required from a society applying for a No Sale License?
A copy of the rules or by-laws of the society, verified by a statutory declaration.
39
What is the minimum paid-up capital requirement for a No Sale License?
S$100,000.
40
What additional financial documentation is necessary for a No Sale License Developer?
A copy of the latest audited accounts verified by a statutory declaration, along with a valid provisional or written permission.
41
What is required of every licensed housing developer under S9 of the HDCLA?
Every licensed housing developer must open a Project Account for each development, with each account representing one building project.
42
How many Project Accounts can a developer open for a project?
A developer may open more than one Project Account if:
(a) The building project is developed in phases; or
(b) The building project comprises both residential and commercial units.
43
What types of funds must be deposited into the Project Account?
The Project Account must contain purchasers’ money and construction loans.
44
In the event a developer goes bankrupt, what happens to the Project Account?
The Project Account is not part of the property of the licensed housing developer and will vest in the official receiver, trustee in bankruptcy, or liquidator.
45
What is the restriction on releasing money from the Project Account by the bank or finance company?
They shall not release any money unless it is for specific permitted purposes related to the project.
46
Under what conditions can money be withdrawn from the Project Account?
Money can only be withdrawn if:
i. The building project is completed with a Certificate of Statutory Completion (CSC) and legal completion for all units;
ii. The grant of Temporary Occupation Permit (T.O.P) has been received;
iii. A banker’s guarantee is provided in lieu of money; or
iv. Withdrawal of surplus money is allowed where there is no existing mortgage.
47
What is the timeline for meeting URA requirements for a show unit?
Requirements must be met no later than 5 clear working days before the show unit is made available for viewing.
48
What must be done regarding the actual depicted unit in a show unit?
A declaration must confirm that the show unit is built in accordance with the Show Unit Rules.
49
What is required for the floor plan of a show unit?
A drawn-to-scale floor plan of the show unit must be provided.
50
What should developers do about changes to the approved building plan?
Any changes must be communicated if made within 3 days.
51
What is prohibited in relation to show units?
There must be no misrepresentation regarding the show unit.
52
What must be included in the show unit?
Features like household shelters, cupboards, vanity units, cabinets, and wardrobes must be included.
53
What should be accurate in terms of materials used in the show unit?
The materials, finishes, fittings, equipment, installations, and appliances should be properly represented.
54
What is required if a partial show unit is presented?
No showing to buyers is allowed unless prior approval is obtained.
55
What is essential about the information and models presented around the building project?
Information, maps, plans, and models must be drawn to scale and accurately represent the location of the building project within a 500-metre radius.
56
What must a building project model show?
It must show all buildings and communal facilities, including:
Clubhouse
Swimming pool
Garden
Barbeque pit
Guard house
Electrical substation
Bin centre
57
What must be included regarding the approved building plan?
The approved building plan must include the approval number and approval date.
58
What must the show flat floor area be equivalent to?
The show flat floor area must equal the actual unit floor area.
59
What must be indicated if a show flat wall is removed?
The thickness, position, and width of the wall must be indicated.
60
What mandatory particulars must be included in advertisements for housing projects?
Advertisements must include:
a) Name and Licence Number of the Housing Developer
b) Tenure of the land and any encumbrances
c) Expected Vacant Possession Date
d) Expected date of legal title conveyed to purchasers
e) Location of the housing project with Lot number and Mukim/Town subdivision.
61
What information is prohibited in advertisements?
Advertisements must not contain:
a) Any reference to the patronage of the President or family members.
b) Any connection with a Government department, statutory body, or public places.
c) Attributes that the housing developer cannot genuinely claim.
62
What is the requirement regarding false or misleading information in advertisements?
There must be no false or misleading information in any advertisements for housing projects.
63
What is the booking fee for the Option to Purchase?
The purchaser pays a 5% booking fee for the Option to Purchase (Form 2).
64
Where must the booking fee be written in favor of?
The booking fee must be written in favor of the Project Account.
65
What happens if the Option is not exercised?
The developer forfeits 25% of the booking fee but must refund 75% within 4 weeks if the purchaser provides written notice.
66
What occurs if the booking fee is not deposited into the Project Account?
If the booking fee is not made to the Project Account (e.g., due to a bounced cheque), the OTP shall be null and void.
67
What happens if the OTP is null and void?
The developer gives 14 days notice in writing to the intending purchaser, who must pay 25% of the booking fee within that time as a debt.
68
What payment structure is typically used in property transactions?
Progressive Payment is the common structure used for payments during the property transaction.
69
In Scenario 1 (Completion Date before CSC), what percentage is paid to the Developer?
A: 2% to the Developer.
2% to the Developer.
70
In Scenario 1, what is the percentage paid to the Singapore Academy of Law after receiving the CSC?
8% if received within 7 days.
Final Payment Date: 5% to be paid.
71
In Scenario 2 (CSC issued before Completion Date), what percentage is paid to the Developer?
8% paid to the Developer initially.
72
In Scenario 2, what is the payment distribution to the Singapore Academy of Law?
5% paid to the Singapore Academy of Law on the completion date.
73
What percentage is paid to the Developer on the actual completion date in Scenario 2?
2% to be paid to the Developer at completion.
74
What must the developer provide to the purchaser before accepting a booking fee?
The developer must provide Form 3 to the purchaser and obtain their written acknowledgment that they have complied with the information in Form 3.
75
What key information about the property must be included in Form 3?
1. Property Address
2. For landed property: Estimated Land Area
3. For strata-titled property:
- Estimated total floor area
- Description of all spaces for different uses
76
What type of location plan must be provided in Form 3?
A drawn-to-scale location plan showing:
Names of nearby streets
Prominent buildings
Facilities within a 500m radius, such as MRT/LRT stations, places of worship, public parks, schools, and commercial/industrial buildings.
77
What type of site plan must be included in Form 3?
A drawn-to-scale site plan showing:
Approved buildings
Communal facilities (e.g., guard house, car parks, swimming pool, vehicular entrance/exit).
78
What information must be provided about the housing developer's track record?
A statement indicating whether the developer has completed any projects in Singapore, including descriptions and locations of such developments.
79
What must be included regarding amendments to the prescribed S&P Agreement?
A copy of all amendments, deletions, and alterations to the S&P Agreement approved by the Controller.
80
What details regarding conditions, restrictions, and requirements must be provided?
A copy of all conditions, restrictions, and requirements imposed by relevant authorities that must be complied with by residents after the project's completion.
81
What is the significance of the option date in the Option to Purchase?
The option date marks the start of the agreement, indicating when the option can be exercised.
82
What information about the vendor is required in the Option to Purchase?
Vendor's name, address, and Housing Developer’s License No..
83
What property details are needed in the Option to Purchase?
Type, storey, unit number, housing project, and lot number (Mk/TS).
84
What must be included regarding the tenure of land?
The tenure of land must be stated in the Option to Purchase.
85
What does the option agreement require concerning encumbrances?
Any encumbrances on the land must be disclosed.
86
What is the significance of the purchase price in the Option to Purchase?
The purchase price specifies the amount the buyer agrees to pay for the property.
87
What is the booking fee, and how is it calculated?
The booking fee is a percentage of the purchase price, often specified clearly in the agreement.
88
What happens if the Option to Purchase expires?
It expires 3 weeks after delivery to the purchaser or upon notice that the purchaser does not wish to exercise the option.
89
What must the purchaser do to exercise the option?
They must sign all copies of the Sale & Purchase Agreement and return them to the developer.
90
What does it mean if the sale is subject to shareholders' approval?
Some sales may require approval from the developer's board or shareholders, and without this approval, the sale can be deemed null and void.
91
What must developers disclose regarding offers made to purchasers?
Any rebates, reimbursements, discounts, or benefits must be disclosed to URA via the Developer Survey System.
92
What details about the strata unit need to be disclosed?
Information regarding share values, maintenance charges, and exclusive benefits concerning common property must be provided.
93
How has the assignment of the OTP changed since September 28, 2020?
The intending purchaser is not allowed to assign or transfer this Option, except under valid reasons approved by the Controller.
94
What steps must a foreign purchaser take after exercising the OTP?
They must apply to the Controller of Residential Property for approval within 3 weeks and notify the developer within 2 weeks of receiving the result.
95
What happens if the authority disapproves the sale and purchase for a foreign purchaser?
The option shall be null and void, and the developer must refund all money within 4 weeks of receiving refusal evidence.
96
What occurs if purchasers cannot provide evidence of application disapproval within 2 weeks?
The developer shall forfeit 25% of the booking fee and refund 75%.
97
What happens if a purchaser makes a late payment on installments?
The purchaser may incur interest on the unpaid amount until it is paid or until the expiration of the repudiation notice period.
98
Under what conditions can a developer treat the contract as repudiated due to the purchaser?
If any part of an installment, purchase price, or interest remains unpaid for more than 14 days after the due date.
99
What must be obtained before proceeding with certain developments?
Planning Approval (applicable to Form 4 only) must be secured.
100
What are the typical obligations of the vendor in a Sales & Purchase Agreement?
Deliver the title deed and sales & purchase agreement within a specified timeframe.
Ensure that the property is sold subject to the terms and conditions of the agreement.
101
What should be noted regarding changes from specifications and plans?
Any modifications to the agreed-upon specifications and plans must be clearly communicated to and agreed upon by both parties.
102
What does Completion signify in a property transaction?
It marks the conclusion of the sale process when all contractual obligations are fulfilled, and ownership is officially transferred.
103
What is the Defects Liability Period?
This period allows buyers to report and rectify any defects in the property that may arise after completion.
104
What does it mean to experience Errors, Omissions, and Misdescription?
It refers to issues regarding inaccuracies in the property descriptions or documents that may lead to disputes or claims.
105
When does interest on the unpaid amount start to accrue?
Interest begins on the day immediately after the expiry of the relevant period or the due date for payment.
106
What is the interest rate applied to unpaid amounts?
The interest shall be calculated on a daily basis at a rate of 2% per annum above the Base Rate.
107
What notice must the developer provide to treat the contract as repudiated?
The developer must give at least 21 days’ notice in writing.
108
What happens after the notice period expires with no payment made?
The contract is annulled unless full payment is made within the 21-day notice period.
109
What rights does the developer have upon repudiation?
The developer can:
a) Re-enter and resume possession of the unit.
b) Resell the unit.
c) Recover amounts due, including unpaid costs and legal expenses.
d) Forfeit and keep 20% of the purchase price from the installments already paid.
110
If the installments paid are insufficient to cover outstanding amounts, what can the developer do?
The developer can claim and recover from the purchaser any shortfall along with all incurred costs and expenses (including legal costs).
111
What must the developer do after deducting amounts owed from any refunds?
The developer must refund the balance of the amount to the purchaser within 21 days after providing evidence that all caveats or encumbrances have been withdrawn or canceled.
112
What happens after the refund to the purchaser is made?
Neither party shall have any further claim against each other following the refund.
113
What is the obligation of the developer regarding the construction of units and common property?
The developer must build the unit and common property as soon as possible and in a good and workmanlike manner.
114
What infrastructure must the developer also build?
The developer must build roads, driveways, drains, culverts, and sewerage mains, and gas mains.
115
What essential services must the developer lay for the unit?
They must lay all necessary water, electricity, sewerage mains, and gas mains to serve the unit.
116
What must the developer pay to obtain?
Subsidiary Strata Certificate of Title
Approval from the Competent Authority under the Planning Act for the subdivision of the housing project.
117
What fees must the purchaser pay in relation to utilities?
The purchaser is responsible for the fees necessary to turn on the supply of water, electricity, and gas.
118
What restriction applies to the purchaser if the Certificate of Statutory Completion (CSC) has not been issued?
The purchaser cannot carry out any alterations or additions without the prior written consent of the developer.
119
Who pays for the expenses related to title surveys?
The costs are shared, with the developer paying 50% and the purchasers paying 50%, apportioned by share value.
120
When does the purchaser start paying maintenance charges to the developer?
Payment starts on the date the developer actually delivers vacant possession of the unit or on the 15th day after receiving the TOP, whichever comes first.
121
What happens if part of the maintenance charges is not paid within 14 days after it is due?
The purchaser must pay interest on the unpaid amount, calculated on a daily basis at 2% per annum above the Base Rate.
122
When must the developer deliver vacant possession of the unit to the purchaser?
The developer must deliver the unit no later than the contract date (the Vacant Possession Date) and within 21 days after the payment date for the Temporary Occupation Permit (T.O.P).
123
Before delivering vacant possession, what must the developer ensure about the unit?
The unit must be completed, fit for occupation, and must have all surplus material and rubbish removed.
124
What must the developer deliver upon vacant possession of the unit?
A Notice of Vacant Possession specifying the date.
A Homeowner User Manual relating to the prefabricated bathroom.
125
What happens if the developer delays the delivery of vacant possession?
The developer must pay liquidated damages calculated daily at 10% per annum on the total sum of all installments paid by the purchaser, starting from the day after the delivery of vacant possession.
126
Can liquidated damages be deducted from any installment due to the developer?
Yes, any liquidated damages payable may be deducted from any installment of the purchase price due to the developer.
127
If the purchaser causes a delay in vacant possession, what is the developer's liability?
The developer is not liable to pay liquidated damages if the delay is due to the purchaser not making payment upon T.O.P or any other reason for which the developer is not responsible.
128
What must the developer ensure regarding changes to the unit?
The developer must ensure that there are no changes to the specifications or approved plans for the unit and to the location, size, and dimensions relating to common property facilities.
129
What should the developer do if changes are required?
The developer must give notice to all purchasers about the changes.
130
How long do purchasers have to object to changes after being notified?
Purchasers can object within 21 days after the date of the notice.
131
What happens if a purchaser objects to changes?
The developer may give the purchaser at least 21 days' notice in writing of their intention to annul the agreement, and upon annulment, the developer must refund all installments of the purchase price without interest.
132
Are purchasers responsible for the cost of changes if those changes are required and approved?
No, unless the changes are required and approved by the Commissioner of Building Control and other authorities and no objection is received from any of the purchasers.
133
What must the developer give to the purchaser to initiate legal completion?
A Notice to Complete must be given by either the contract date or within 3 years after the delivery of vacant possession of the unit, whichever is earlier.
134
When must completion take place after the purchaser receives the Notice to Complete?
Completion must take place 14 days after the purchaser receives the notice at the office of the developer’s solicitors.
135
What documentation must the developer execute and deliver upon completion?
The developer must execute a proper conveyance and deliver a duplicate Subsidiary Strata Certificate of Title.
136
Who prepares the conveyance and who bears the expense?
The conveyance shall be prepared by and at the expense of the purchaser.
137
What happens if the developer fails to issue the Notice to Complete by the specified date?
The developer must pay liquidated damages to the purchaser.
138
How are liquidated damages calculated if the developer fails to issue the Notice?
Liquidated damages are calculated on a daily basis at a rate of 10% per annum on the total installments paid, starting the day after the specified date until a new Notice to Complete date is given.
139
What is the developer required to do during the defects liability period?
The developer must make good any defects at their own cost and expense.
140
How long is the Defects Liability Period?
It is 12 months after the date the vendor delivers vacant possession of the unit or the 15th day after the T.O.P, whichever is earlier.
141
How long does the developer have to rectify defects after receiving notice from the purchaser?
The developer must rectify defects within one month from the purchaser's notice.
142
What action can the purchaser take if the developer fails to make good the defects?
The purchaser can notify the developer of the estimated cost of rectification works and if the developer fails to carry out those works within 14 days, the purchaser may carry out the works themselves.
143
What can the purchaser do regarding the costs of rectification works?
The purchaser may deduct the cost of those rectification works from the sum held by the Singapore Academy of Law.
144
What happens if there are errors or omissions in the property area description?
Errors or omissions do not invalidate the contract, but the purchaser has the right to an adjustment of the purchase price.
145
How is the purchase price adjusted based on property area deficiencies?
No reduction for 3% or less deficiency.
For more than 3%, the purchase price is reduced at the rate of the unit purchase price for every square meter of deficiency exceeding 3%.
146
When is the reduction of the purchase price made?
The reduction shall be made on the Completion Date.
147
Does the developer have the right to adjust the purchase price if the unit's area is more than stated in the contract?
No, the developer does not have the right to any adjustment in the purchase price if the area is greater than what is stated in the contract.
148
When does a housing developer license cease to be valid?
It ceases when the residential project is completed with the issuance of:
A Certificate of Statutory Completion by the Commissioner of Building Control.
A Certificate of Title or Subsidiary Strata Certificate of Titles by the Registrar of Titles.
A Strata Lease Plan for all DBSS flats.
149
What happens to a developer's obligations under the Housing Developer Control & Licensing Act once the license ceases?
The developer will not be subjected to the Act in relation to the completed housing project.
150
Is the Assignment of Option To Purchase allowed?
No, the Assignment of Option To Purchase is not allowed.
151
When can an assignment be done in the property transaction process?
Assignment can only be done after the Sales and Purchase Agreement has been exercised (as per S16 Housing Developers Rules).
152
What fees can a developer charge the sub-purchaser for an assignment?
The developer cannot refuse the assignment and can charge the sub-purchaser a fee not exceeding $200 and recover solicitor reimbursement costs up to $400.
153
What must the developer do upon receiving the assignee’s written notice?
The developer must enter a new Sale and Purchase Agreement with the assignee within 3 weeks.
154
Can the sub-purchaser change any terms and conditions of the original Sales & Purchase Agreement?
No, the sub-purchaser cannot change any terms and conditions of the original S&P Agreement.
155
What does the Sale of Commercial Properties Act regulate?
It regulates the sales of separate commercial property units.
156
What situations does the Sale of Commercial Properties Act apply to?
a) Buildings under construction
b) Sale of more than 4 uncompleted non-residential properties (approval from Commissioner of Building Control required)
c) Addition or alteration works on existing buildings.
157
How is a commercial/industrial unit with more than 7 years lease treated under this act?
It is deemed a sale.
158
What standard agreements are used for commercial properties?
Standard Option to Purchase and Sales and Purchase Agreement
159
What are some differences in rules between the Sale of Commercial Properties Act and the Housing Developer Control and Licensing Act?
No License Requirement for commercial properties.
No Project Account necessary.
For Refund of Option Fee, the developer refunds 50% and forfeits 50% of the booking fee.
