Legal
Are there any restrictions on the right to own residential property in Singapore?
The Residential Property Act 1973 prohibits foreign ownership of certain categories of private residential properties such as landed properties unless a foreigner has obtained the approval from the Land Dealings Approval Unit. For enquiries, they may write to the Comptroller of Residential Property Land Dealings Approval Unit.
A foreigner is defined under the Act to mean a non-Singapore citizen and includes a permanent resident of Singapore.
Below are some criteria the Government takes into account when granting approval:
• Whether the applicant is a permanent resident of Singapore.
• His contribution to Singapore, for example, professional/technical/academic qualifications, expertise combined with working experience and/or his investments in the type of industry or the service sector needed in Singapore.
A successful applicant must use the property for owner occupied purposes. The land area must not exceed 15,000 sq. ft. The in-principle approval for purchase is valid for six months. It normally takes eight weeks to process each application.
What private properties are foreigners eligible to buy without the approval of the land Dealings Approval Unit?
They would be eligible to buy:
a. Any flat comprised in any building containing six or more storeys including the ground floor; or
b. Any flat or dwelling home show as a unit in an approved plan bearing the title “condominium”.
c. HUDC Phase I and II flats (except those within buildings of less that six storeys).
What is a joint-tenancy?
A joint-tenancy is a form of ownership where all the owners have an equal interest in the property regardless of the amount of money each co-owner has contributed towards the purchase price of the property.
What is a tenancy-in-common?
A tenancy-in-common is a form of ownership where each co-owner holds a separate and definite share is the property. However, all the co-owners are entitled to the enjoyment of the property regardless of his share in the property.
What is the significance of owning a property under joint-tenancy and tenancy-in-common?
Only in a joint-tenancy is there a right of survivorship. This means that upon the death of any co-owner under a joint-tenancy, his interest or share in the property will be automatically passed to the remaining co-owner(s). This is so regardless of whether the deceased joint-tenant has left behind a will.
There is no right of survivorship in a tenancy-in-common. In other words, unlike a joint-tenancy, the deceased’s interest does not pass automatically to the remaining co-owners. Upon the death of a tenant-in-common, the deceased’s interest can be distributed in accordance with his will (if any) or under the provisions of the Intestate Succession Act.
How do I ensure that the property I am about to purchase is free from encumbrances?
Check two basic things:
a. Bankruptcy search
This is a search on the status of the present owner and can be obtained from the High Court, which is usually done by a lawyer.
b. Title deed search
This is to ascertain the status of the property you are about to own, whether it is freehold or leasehold. Naturally, a freehold property would give your property better value for money. A title deed search will also disclose whether the property is free from any adverse interests such as charges or encumbrances or whether the property is affected by any easements or restrictive covenants.
Footnotes:
Easements are rights of access by an adjoining property owner over subject property.
Restrictive covenants are prohibitions over the use of the subject property itself.
What are the legal fees involved in the purchase of a property?
Legal costs for property transactions are fixed by Law, i.e. by the Solicitors’ Remuneration Order 1974 & The Solicitors’ Remuneration (Amendment) Order 1975. The legal fees will consist of the following:
a. Costs for acting in the purchase which will be based on the purchase price.
b. Costs for acting in the mortgage which is based on the mortgage loan amount.
c. Costs for acting in the withdrawal of CPF funds which is based on the total amount of CPF funds withdrawn.
In addition, a buyer will also have to pay the legal costs charged by the financial institution’s lawyer and CPF Board’s lawyer. The legal fees usually do not exceed 2% of the purchase price (exclusive of disbursements).
I am a buyer and I have verbally agreed with the seller to buy his property. All the terms have been verbally agreed but the seller later refuses to sell the property to me as he has found another buyer for a higher price. Do I have any legal remedy against the seller?
No. An oral agreement for the sale and purchase of property is not enforceable. It is a requirement in law for contracts for the sale of a property to be evidenced in writing and signed by the seller or his authorised representative.
Who should the buyer pay the option money to?
The buyer should pay 1% of the purchase price as option money to the seller. But if the seller becomes a bankrupt, it may be difficult for the buyer to recover his money.
However, ERA offers an option money guarantee programme whereby ERA will pay the option money to the buyer in the event that the seller becomes a bankrupt. ERA is the only agency that offers this guarantee programme.
Should a buyer pay the deposit to the seller?
As a general rule, it would not be prudent for the buyer to pay the deposit to the seller as the buyer may not be able to recover the deposit if, for some reasons, the buyer has been advised not to proceed with the purchase. This is because the seller may dispute the buyer’s action in calling off the deal or if he has already spent the money and has no available and ready funds to repay the buyer. The buyer would then have to commence legal proceedings against the seller to recover the deposit.
It would be advisable for the buyer then to pay the deposit to the seller’s solicitor to hold as stakeholder.
Is a buyer entitled to interest accrued on the deposit held by his solicitor as stakeholder pending completion of the sale of his property?
No. The solicitor who holds the deposit as stakeholder is entitled to the accrued interest as a payment for performing his duties as stakeholder.
What are fixtures and how does one determine whether an item/equipment qualifies as a “fixture”?
A fixture refers to any chattel (personal property) that has become attached to the property so as to become a part of the property itself.
Fixtures therefore are to remain with the property and handed over to the purchaser upon completion of the property.
The test for determining whether a chattel is a fixture depends on the degree of annexation to the property. If the removal of the chattel would either damage the property or reduce its value, then it would be considered a fixture.
