[BUYING AND SELLING REAL ESTATE IN SINGAPORE]
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Executive Condominiums (“EC”) are a hybrid public housing property under the Executive Condominium Scheme Act which resembles private condominiums with security and amenities such as swimming pools and clubhouses. Strict eligibility criteria similar to that for normal HDB flats are imposed. ECs may only be sold after the expiry of a minimum occupation period of five (5) years and until the tenth (10 th ) year, only to Singapore citizens or permanent residents, after which, they may be sold like any other private condominium. Planning, Zoning & Use Planning and control of use of land and its development fall to URA under the Planning Act. Land in Singapore can be zoned as residential, commercial, or industrial, each type of zoning carrying its own set of rules for ownership, use and development. Permission from URA or such other relevant authorities may be required for deviations such as change of use of properties, subdivision of land, etc. LEGAL FORMALITIES IN ACQUISITION Option to Purchase & Sale and Purchase Agreement The Civil Law Act requires agreements for the sale and purchase of property to be in writing and signed by the parties involved. The majority of sales and purchases of property in Singapore are initiated with the issuing of an Option to Purchase (“Option”) by the vendor to the prospective purchaser in exchange for an initial sum paid by the prospective purchaser to the vendor which is typically 1% of the purchase price. An Option is used to reserve the property for an agreed period, typically 14 days, during which the prospective purchaser may confirm whether he is proceeding with the transaction. In the event that he chooses not to proceed
with the transaction, it is usually a term of the Option that the initial sum paid shall be forfeit to the vendor. The purchaser will confirm the transaction by countersigning the Option and paying the remaining deposit amount to the vendor or the vendor’s appointed lawyer as a stakeholder – this is commonly known as “exercising the Option”. An exercised Option is considered the instrument effecting the sale and purchase of the property and no further agreement is required to capture the intention of the parties. In some cases where the parties are certain of the transaction, they may decide to enter a Sale and Purchase Agreement immediately. Completion (or closing) of the sale and purchase typically takes place within 8 to 12 weeks from the time of exercising the Option. This period is to allow the purchaser to complete the investigation of title and government requisitions on the property. This period also allows the purchaser to arrange for financing of the purchase either through his
own funds or a bank mortgage. Properties under Development
Developers of both residential and non- residential properties are subject to specific rules under the Housing Developers (Control and Licensing) Act and the Sale of Commercial Properties Act respectively which are designed to protect purchasers. Developers of residential properties are required to be licensed. The sale of property by developers of residential and non-residential properties alike are subject to terms and conditions prescribed and regulated by the relevant governing Act. Registration A transaction of unregistered land is achieved by way of a deed, signed, sealed, and delivered,
ILN Real Estate Group – Buying and Selling Real Estate Series
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