When buying a house (House) or a flat (Flat), you should seek advice from your lawyer on the following :

a. Title

House
The title to the House may be
• freehold i.e. an absolute title;
• an estate in perpetuity i.e. an estate forever subject to the payment of a quit rent;
• leasehold i.e. for example, a lease for 99 years or 999 years.

Flat
The title to the Flat may be

• a common law Lease (under the old Conveyancing system) for 99 years or 999 years with no interest in the land or with a proportionate fractional share in the land subject to the Lease;
• a strata title where the proprietor will have a title to the flat with a proportionate share in the land (freehold or leasehold) on which the flats had been erected.

b. Area of House or Flat

You are advised to check with your lawyer the land area of the House or floor area of the Flat (as the case may be). You may also want to consult a qualified surveyor if you suspect any discrepancy in the boundary line or encroachment or if you require the actual area of the House or Flat.

c. Financing

Before you decide to purchase a House or Flat you should ensure that you have sufficient funds available to complete the purchase. If you are financing your purchase with your CPF funds and/or a loan you should contact the CPF Board and the lender bank/finance company in advance to sign all relevant application forms and furnish all relevant information and documents to ensure that the CPF funds and/or loan would be approved and the funds will be available. In addition to the purchase price you will have to make provision for the stamp fees and lawyer’s fees. You can request your lawyer to give an estimate of such stamp fees, costs and disbursements that will be incurred in the purchase, CPF Charge and Mortgage. Stamp fees on the purchase (approximately 3% of the purchase price) will have to be paid in advance under the recent amendments to the law.

Residential Property Act

Only Singapore citizens and approved persons can purchase landed “residential property” as defined in the Residential Properties Act. Foreigners are eligible to purchase units in condominiums or apartments in a block that is not less than six (6) storeys high. Foreigners cannot purchase landed property or flats in a block of less than six (6) storeys high without the approval of the Controller of Residential Property.

Choosing Your Lawyer

You are advised to consult your lawyer before you sign any Option or Agreement/Contract to purchase a House or Flat.

Procedures for Purchase

An Option or Agreement/Contract for the Purchase of a House or Flat can be form in many ways e.g.

1. by correspondence;
2. by the exercise of an Option;
3. by the parties signing an Agreement/Contract.

Options (which are often prepared by brokers) and Agreements/Contracts are documents that create legal rights and obligations, dealing particularly with:

1. title;
2. discharge of encumbrances;
3. vacant possession;
4. the date of completion;
5. liability for property tax, maintenance fees or sinking fund;
6. other special terms.

You should consult your lawyer before accepting or signing the Option or Agreement/Contract. This is to ensure that your interests are protected.

Purchase From a Licensed Housing Developer

You are advised to consult your lawyer immediately after paying the booking fee and obtaining the prescribed Option to purchase the property. The lawyer will then investigate the title and advise you on the terms of the prescribed Agreement before you sign the Agreement/Contract.

Purchase From an Unlicensed Developer

You are advised to consult your lawyer before paying the booking fee as such unlicensed developers are not required to comply with the Housing Developers (Licensing and Control) Act or the Rules made thereunder. The unlicensed developer is free to mortgage the land and there are no statutory safeguards to ensure that the progress payments from the purchaser would be utilised to pay off the mortgage loan. In the event the unlicensed developer defaults in his mortgage payments or if he gets into financial difficulties he will not be able to complete the development. Further, you may have difficulty obtaining your CPF funds or a Mortgage from a bank or finance company to finance your purchase of the House or Flat in view of the risks involved.

Selling your house or flat

When selling your house, your should consider the following:

a. Option / Agreement
You can sell your House or Flat by

1. granting an Option to the Purchaser; or
2. entering into an Agreement / Contract

Options (which are often prepared by brokers) and Agreements / Contracts are documents that create legal rights and obligations, dealing particularly with:

1. the title of the property;
2. the mode of payment;
3. discharge of encumbrances;
4. schemes and other matters affecting the property e.g. road widening;
5. vacant possession;
6. the date of completion;
7. delay in completion;
8. other special terms.

You should consult your lawyer before accepting or signing the Option or Agreement / Contract. This is to ensure that your interests are protected.

b. Stakeholding

The deposit on exercise of the Option or signing of the Agreement/Contract will normally be held by the Vendor’s lawyers as stakeholders. This is because the sale will normally be subject to :

1. the discharge of encumbrances like mortgage and CPF charge;
2. the title being in order;
3. satisfactory replies to legal requisitions to the various Government departments.

The deposit is therefore held by the Vendor’s lawyers as stakeholders to assure the purchaser that the deposit will be kept safely until completion of the purchase. In certain circumstances, the Singapore Academy of Law will hold a portion of the purchase monies as stakeholders until the expiry of the defects liability period provided in the Agreement/Contract.

c. Stamp Duty

If you sell your property within three (3) years of its purchase you will be required to pay stamp duty on the sale. Check with your lawyer on the amount of stamp duty payable on the sale when you instruct him. (The stamp duty payable by the Vendor has been suspended with effect from 19 November 1997.)

d. Goods and services tax (GST)

GST is not payable on residential property at present. However, as some residential properties (e.g. shophouse with a flat above) may involve a commercial component you should seek advice from your lawyer on this.

HDB Flats

You are advised to contact the HDB directly in respect of the sale and/or purchase of HDB flats. The HDB has in many cases devised their own form of Agreement/Contract for the purchase of HDB flats.

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