Home buyers to get more accurate information from developers
These changes aim to better protect home buyers' interests. ST PHOTO: LIM YAOHUI
Senior Business Correspondent
Jan 5, 2022, 5:16 PM SGT
SINGAPORE - The Urban Redevelopment Authority (URA) on Wednesday (Jan 5) launched a public consultation on proposed changes to better protect home buyers by requiring developers to provide more accurate and detailed information on their uncompleted private residential projects, among other things.
Such information includes the track records of the developers, storey layout plans of the project, and information on ground rent payable and identity of the landowners.
Under the proposed amendments to the Housing Developers Rules, developers will be required to obtain the authorities’ prior approval for features of a housing project shown in advertisements, mark out void areas in unit floor plans and provide scaled floor plans for landed properties.
For instance, to assure home buyers that the features shown in advertisements - such as vehicle pick-up/drop-off point and water features - will be built in the actual development, developers must obtain prior approval from the authorities for these features before including them in the advertisements.
URA is also proposing amendments to the terms in the standard sale and purchase agreement. Developers are currently required to compensate home buyers when the actual area in the unit falls short of the area stated in the sale and purchase agreement by more than 3 per cent. As construction standards have improved, the level of tolerance for shortfall in the area of the unit will be reduced to 2 per cent.
Home buyers will also get better refund coverage on costs they incurred in buying a property, in the event the sale and purchase agreement is annulled.
Currently, developers are required to refund all instalment payments and any stamp duty paid by the home buyer. Under the proposed amendments, developers will be required to refund interest paid on loans, loan cancellation charges and legal fees paid by home buyers, subject to a cap of 15 per cent of the purchase price.
Mr Lee Sze Teck, Huttons Asia senior director of research, noted that while the proposed rule changes will help improve transparency and protect buyers’ interests, they place a large burden on developers and add to the costs of compliance in an increasingly competitive landscape.
“More details in plans and the reduced threshold for claims will result in higher construction costs, which are already high in the wake of disruptions from Covid-19.
“The refund of costs incurred by buyers (subject to a cap of 15 per cent of the purchase price) appears high. Some of these costs may be passed on to buyers,” he added.
In addition to the approved building plans, developers will be required to build in accordance with the scaled unit floor plan and site plan provided to home buyers before the acceptance of booking fees.
If the developer wishes to make any changes to the unit floor plan or any substantive change to the site plan for the common facilities, the developer will have to get home buyers’ consent, unless the changes are needed to comply with new requirements issued by the authorities after the Option to Purchase issue date.
More details such as the location of key communal facilities in the site and storey plans and explaining abbreviations used in floor plans will be required.
For landed properties, developers will need to provide a scaled floor plan showing each storey of the landed property based on the approved building plan, in addition to the current requirement to provide a plan showing the land area.
Developers will also be required to provide their Construction Quality Assessment System and Quality Mark scores, as well as Green Mark certification for their completed projects in the past five years under the proposed changes.
To allow home buyers to know when they can move into the units once they have settled payments due, developers will be required to state the Temporary Occupation Permit (TOP) or Certificate of Statutory Completion (CSC) dates in the advertisements.
The payment schedule will also be simplified, URA said.
Under the current payment schedule, the timing for the payment of the final 15 per cent of the purchase price can vary depending on whether the Certificate of Statutory Completion or the completion of the sale and purchase occurs first.
To simplify the process, URA is proposing that home buyers first make payment due at the CSC stage - that is, 8 per cent to developers and 5 per cent to be held by Singapore Academy of Law - followed by the final payment of 2 per cent to developers when the completion date payment notice is served after CSC.
The 12-month defects liability period and home buyer’s obligation to pay maintenance charges will also commence closer to the date home buyers take possession of their properties.
Feedback on the proposed amendments to the Housing Developers Rules can be submitted here from Wednesday until Feb 5.