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Lesson 14 Flashcards

1
Q

What does “Caveat Emptor” mean?

A

“Caveat Emptor” means “Let the Buyer Beware,” indicating that the buyer assumes the risk for the condition of the property being purchased.

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2
Q

Can a buyer recover damages for defects under “Caveat Emptor”?

A

No, the buyer could not recover damages from the seller for defects that made the property unfit, as the risk is on the buyer.

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3
Q

Whose responsibility is it to check for defects under the “Caveat Emptor” principle?

A

It is the buyer’s duty to conduct due diligence and checks for defects.

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4
Q

What are “patent defects”?

A

Patent defects are visible and easily noticeable defects that can be discovered with ordinary vigilance, like chips on walls or water leaks.

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5
Q

What are “latent defects”?

A

Latent defects are hidden defects not easily discoverable even with careful inspection, such as internal structural damage.

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6
Q

Under “Caveat Emptor,” is the seller required to disclose defects?

A

The seller is not required to disclose patent or latent defects affecting the property’s value, except latent defects of title required by law.

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7
Q

What constitutes an exception to “Caveat Emptor”?

A

Exceptions occur if the seller or agent actively conceals latent defects or makes fraudulent misrepresentations.

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8
Q

What is required by law concerning latent defects of title?

A

The seller must disclose latent defects of title, which are not apparent or discoverable on inspection, to the buyer.

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9
Q

What clause is commonly incorporated in sales agreements under “Caveat Emptor”?

A

The “As Is Where Is” clause is often included in sales agreements, as referenced in the Law Society Condition of Sales 2012 – Clause 5.

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10
Q

What are the Stages of Sale & Purchase of Resale Properties (Residential, Commercial or Industrial)?

A
  1. Pre-contract stage
  2. Contract stage
  3. Legal completion
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11
Q

What is an Option Fee and what does the buyer receive in exchange?

A

An Option Fee, usually 1% of the property’s price, is paid by the buyer in exchange for an Option to Purchase (OTP) from the seller.

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12
Q

What is the duration of the Option Period, and what restriction does it impose on the seller?

A

The Option Period typically lasts 14 days, during which the seller cannot sell the property to another buyer.

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13
Q

What happens if the buyer does not exercise the OTP during the Option Period?

A

If the buyer does not exercise the option, the Option Fee is forfeited by the seller, and neither party can make any claims against each other. The seller is free to sell to another buyer.

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14
Q

How does a buyer exercise the OTP?

A

The buyer exercises the OTP by paying an Exercise Fee (usually 4% or 9%) and signing the Acceptance Copy in the OTP.

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15
Q

What is done with the exercised OTP and the Exercise Fee by the buyer’s lawyer?

A

The buyer’s lawyer sends the exercised OTP and the Exercise Fee to the seller’s lawyer before the due date.

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16
Q

Who can hold the amount paid by the buyer to exercise the OTP during the Contract Stage?

A

The amount can be held by the seller’s lawyer or the Singapore Academy of Law as a stakeholder.

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17
Q

What are the stages following the exercise of the OTP?

A

The stages following the exercise of the OTP are the Contract Stage and Completion of the transaction.

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18
Q

What is “conveyancing money”?

A

It refers to money involved in the purchase, sale, and lease of land, including option deposits, balance purchase price, CPF money, stamp duties, and other related payments.

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19
Q

Where must conveyancing money be deposited?

A

In special conveyancing accounts held with appointed banks or with the Singapore Academy of Law.

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20
Q

What is required for the withdrawal of conveyancing money?

A

The signatures of two lawyers are required for withdrawal.

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21
Q

What do the Conveyancing Rules 2011 permit solicitors to use for complex transactions?

A

Jointly managed escrow accounts to hold conveyancing money.

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22
Q

What is the Agreement for Sale & Purchase in the Contract Stage?

A

It is a legal document outlining the terms of the property sale and purchase, following which the buyer’s lawyer takes actions to protect the buyer’s interests.

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23
Q

What action does the buyer’s lawyer take to protect the buyer’s interest in a property?

A

The lawyer lodges a caveat with the Singapore Land Authority (SLA).

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24
Q

What is the purpose of a title search and legal requisitions on a property?

A

To inquire about any encumbrances and obtain necessary information from relevant authorities.

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25
Name two authorities to which legal requisitions are commonly made during a property purchase.
Inland Revenue Authority of Singapore (IRAS) and Land Transport Authority (LTA).
26
Can a buyer rescind a sale based on legal requisition findings?
Yes, a buyer is entitled to rescind a sale if legal requisitions reveal unsatisfactory results.
27
What is the first step in the legal completion process?
The buyer's lawyer prepares a draft transfer of the property.
28
What document does the seller's lawyer prepare during the legal completion?
The seller's lawyer prepares a completion statement outlining the financial details of the sale.
29
What typical items are included in the seller's completion statement?
Sales price, loan deductions, CPF proceeds, solicitor fees, property tax, MCST fee, and agent’s commission.
30
What are the net sales proceeds?
Net sales proceeds are the total amount the seller receives after all deductions (loan, fees, taxes, etc.) from the sales price.
31
What happens to the keys on the completion date?
The seller delivers the keys to his lawyer, who then hands them over to the buyer's lawyer.
32
What occurs on the completion date regarding financial transactions?
The balance sales proceeds are issued to the seller, and the buyer picks up the keys from their lawyer.
33
What important action does the buyer's lawyer complete after the transaction?
The buyer's lawyer completes the transfer and registers the buyer’s interest in the Land Registry.
34
What is the first step in the collective sale process?
Requisition to form an Extraordinary General Meeting (EOGM).
35
What is established during Step 2 of the collective sale process?
Forming the Collective Sales Committee and creating a Constitution.
36
What happens in Step 3 of the collective sale process?
Selection of the Law Firm, Valuer, and Marketing & Consultant Agency.
37
What is decided in Step 4 at the EOGM?
Approval for the chosen Law Firm, Valuer, and Marketing Consultant.
38
What key approvals are obtained in Step 5 of the process?
Approvals for Reserve Prices, Methods of Apportionment, Collective Sales Agreement, and Sales & Purchase Agreement.
39
What occurs in Step 6 after the approvals?
Signing of the Collective Sales Agreement.
40
What updates are provided in Step 7?
Pre-Marketing Updates and obtaining Majority Consents.
41
What is conducted in Step 8?
Public Tender or Auction for the property.
42
What is the purpose of Step 9?
To submit the application to the Strata Title Board.
43
What is the final step in the collective sale process?
Handing over the property and collecting the sales proceeds.
44
What is required to convene an Extraordinary General Meeting (EOGM)?
A requisition signed by persons holding at least X% of aggregate Share Values or Y% of total Subsidiary Proprietors.
45
What constitutes a "Failed Attempt" at a collective sale?
1) Quorum is not present, 2) Motion for the Collective Sales Committee (CSC) is defeated, 3) Dissolution of CSC, 4) Collective Sales Agreement (CSA) expires, 5) All CSC members removed without replacements.
46
What is the percentage required for the first attempt in collective sale?
20% of share values and 25% of total Subsidiary Proprietors.
47
How many members must a Collective Sales Committee have?
The committee must have between 3 to 14 members.
48
Who can be a member of the Collective Sales Committee?
Must be a natural person (undischarged bankrupt), at least 21 years old, and can be a Subsidiary Proprietor, company representative (company is a SP), or immediate family member (of an SP)
49
What percentage of consent is required from Subsidiary Proprietors for strata title developments under 10 years?
90% of share value and total strata area consents.
50
What percentage of consent is required for strata title developments over 10 years?
80% of share value and total strata area consents.
51
How long does the Collective Sales Committee have to secure the first signature on the Collective Sales Agreement after being constituted?
12 months.
52
What happens if the first signature on the Collective Sales Agreement is not secured within the stipulated time?
The Sales Committee is automatically dissolved.
53
How long does a Subsidiary Proprietor have to rescind the agreement after signing?
A 5-day cooling-off period.
54
Who must be present to witness the signing of the Collective Sales Agreement?
A lawyer.
55
How frequently must updates be provided on the number and percentage of flat owners who have signed the Collective Sales Agreement?
Every 4 weeks.
56
What must the Collective Sale Committee do before holding a meeting regarding the Collective Sales Agreement?
Provide at least 7 days’ notice before the meeting.
57
After the close of public tender or auction, what must the Collective Sale Committee provide information about?
The number of offers received, prices offered, and terms and conditions of the Sale and Purchase Agreement.
58
What is the timeline for the Sales Committee to apply to the Strata Title Board (STB) after obtaining the requisite majority?
Within 12 months.
59
How are Subsidiary Proprietors notified of the STB application?
By registered post.
60
What must be done if there are objections to the STB application?
Objections must be filed within 21 days of notification.
61
What does the STB do if there is an objection regarding the collective sale?
STB mediates and assists in resolving the dispute; if unresolved in 60 days, they issue a Stop Order.
62
If there is a Stop Order from the STB, how long does the Sales Committee have to apply to the High Court?
14 days.
63
What factors can lead the Strata Title Board (STB) to stop an enbloc sale?
1) Sale price of development, 2) Method of distributing sale proceeds, 3) Relationship of purchaser to subsidiary proprietors, 4) Sale and purchase agreement requiring dissenting owners to participate in future development arrangements.
64
What happens if the STB approves the enbloc application?
The STB issues an enbloc sale order that is binding on all unit and land owners, requiring them to sell their units according to the sale and purchase agreement.
65
What act governs the employment of foreign manpower in Singapore?
The Employment of Foreign Manpower Act (EFMA).
66
What is one of the responsibilities of employers regarding foreign workers' housing?
Employers must ensure that their foreign workers have proper housing and provide their residential addresses to the Ministry of Manpower (MOM).
67
What is required for work permit applications and renewals concerning foreign workers?
Employers must register the workers' residential addresses before the issuance of work permits.
68
How quickly must employers update changes in their foreign workers’ residential addresses?
Within 5 days of any changes.
69
What safety requirements must converted premises meet for housing foreign workers?
Converted premises must comply with statutory requirements regarding fire and structural safety.
70
What environmental requirements must be met for housing foreign workers?
The premises must meet Environmental Health and Drainage & sanitary/sewerage standards.
71
What are Purpose Built Dormitories (PBDs)?
PBDs are specially designed dormitories featuring amenities, services, and recreational facilities to meet the needs of foreign employees.
72
What amenities are typically found in Purpose Built Dormitories?
Amenities include minimarts, dedicated cooking areas, laundry services, and recreational facilities like gyms and outdoor games courts.
73
What are Factory Converted Dormitories (FCDs)?
FCDs are industrial or warehouse developments that have been partially converted into dormitories for housing.
74
What are Standalone Temporary Quarters?
These are structures used for housing employees on construction sites that will be demolished or removed afterward.
75
Who is allowed to be housed in Standalone Temporary Quarters?
Foreign employees working in the construction sector only.
76
What are Quarters in Buildings under Construction?
These are parts of buildings still being constructed that serve as quarters for employees.
77
Who can be housed in Quarters in Buildings under Construction?
Foreign employees working in the construction sector only.
78
What are Temporary Occupation Licenses (TOL) quarters?
TOLs are temporary occupation licenses issued to establish temporary quarters on land near a construction site for a specific project.
79
What types of buildings can TOL quarters consist of?
TOL quarters can be pre-fabricated temporary buildings or refurnished buildings.
80
Who is allowed to be housed in TOL quarters?
Foreign employees working in the construction sector only.
81
What are Private Residential Properties (PRPs)?
PRPs include condominiums, landed residential properties, terrace houses, semi-detached houses, bungalows, and residential units in shop houses.

Real Estate (19 decks)

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