Real Estate Practice Introductory Lecture PDF

Real Estate Practice Introductory Lecture Objective Overview Different areas of law involved Parties and capacities Types of properties Regulations that affect transactions 2 Systems of Land Registration Register of Deeds (Common Law) Lan...

Real Estate Practice Introductory Lecture Objective Overview Different areas of law involved Parties and capacities Types of properties Regulations that affect transactions 2 Systems of Land Registration Register of Deeds (Common Law) Land Titles Register (Torrens System) 3 Parties Who are the parties to the transaction? What is their capacity in the transaction? Individuals 21 years old, sui juris, not bankrupt Companies If registered under Companies Act, generally have capacity to own land. Note: Approval may be required to acquire land under s 23 (2) Companies Act. See Residential Property Act esp. definitions of “approved purchaser”, “foreign person” and “Singapore company”. Societies Cannot hold land in society’s name - Can hold land only through their trustees 4 Types of property involved HDB flats – FYI only HDB properties are subject to HDB rules (refer to HDB website for latest MOP rules) 5 Types of property involved Non-Residential:- E.g. Commercial/Industrial Property. JTC industrial properties are subject to JTC rules Residential Property Citizenship – see Residential Property Act There is a prohibition on transfer to, or purchase or acquisition by, foreign persons of certain types of residential property. Check whether your client is a “foreign person” as defined in the Residential Property Act (“RPA”). Check the type of “residential property” that your client is acquiring to determine whether the prohibition in the RPA applies (see s4 RPA). Obligations under applicable legislation E.g., For strata property – rights and obligations under the Building Maintenance and Strata Management Act (“BMSMA”) and the Land Titles (Strata) Act (“LTSA”) 6 Regulations affecting transactions Power of sale under section 35(1) of the Conveyancing & Law of Property Act (“CLPA”) See also Section 35(2): “No sale or mortgage of land belonging to the estate of a deceased person shall be made by the legal personal representative of that person after the expiration of 6 years from his death unless with the sanction of the court, or unless the sale or mortgage is made in pursuance of a power of sale or trust for sale or mortgage which is expressly contained in or may be implied from the terms of the will of the deceased.” Where the owner of a property is deceased, sale of such property must be within 6 years from date of death unless the will contained a power of sale, or the transaction is sanctioned by the court 7 Regulations affecting transactions CPF monies can be used to buy residential property Use is subject to applicable rules such as Valuation Limit & Withdrawal Limit Use of CPF monies beyond these limits is not allowed 8 Stamp Duty Seller’s Stamp Duty Additional Buyer’s Stamp Duty (“ABSD”) The purchaser’s citizenship and the number of residential properties owned prior to the acquisition have a huge bearing on his liability to pay ABSD on the acquisition of a residential property. Citizenship affects ABSD – however note the effect of Free Trade Agreements (Switzerland, USA, Liechtenstein, Iceland, Norway) All residential properties are included in the count Refer to the IRAS website for the latest BSD and ABSD rates and guidelines If deficient duty is paid or SSD/ABSD is unpaid, a penalty of up to 4 times the amount of deficient duty may be imposed. Declarations from the seller and the purchaser are mandatory by IRAS. 9 Regulations affecting transactions GST Only residential property is exempt 9% For commercial properties, GST is payable by the vendor 8% if the vendor is a taxable person under the GST Act But parties free to negotiate Usually GST is passed on to the purchaser 10 Nature of the Transaction Purchase; Sale; Mortgage; Lease; Licence; Charge; Subdivision; Partition; Amalgamation etc Keep in mind the nature of the transaction, as well as the zoning and use of the property Zoning: Residential, Industrial and Commercial Take note of the implications on Stamp Duty payable Use of Property must adhere to zoning 11 Conveyancing Contracts Formalities for contracts for the sale of land See Section 6(d) of the Civil Law Act – contracts for the sale of land must be evidenced in writing Email correspondence can be considered sufficient - Joseph Matthew and anor v Singh Chiranjeev and anor 1 SLR 338 Concluding the Contract – keep in mind the Law Society’s Condition of Sale 2020 Examples of conveyancing transactions not pursuant to a contract: distribution under intestacy, matrimonial proceedings, in exercise of statutory rights e.g. the MCST under the BMSMA etc. 12 Recap Conveyancing involves: Various aspects of land law such as joint ownership and conditions and rights attached to land Regulations on zoning & use Company and contract law Succession & probate law 13 Notice Copyright © 2024, Singapore Institute of Legal Education. All rights reserved. The Course materials are developed by the Singapore Institute of Legal Education, based on the content, syllabus, and guidance provided by the Chief and Principal Examiners and their teams. No direct or indirect reproduction, publication, communication to the public, adaptation or any other use (that is prohibited and/or proscribed by copyright laws) of the Course materials in whole or in part in any form or medium is allowed without the written permission of the Singapore Institute of Legal Education. Part B Candidates should refer to the Code of Conduct for more information, particularly, the sections on conduct and behaviour, and the use of SILE resources.