B24 REP Lecture Notes PDF

B24 REP Lecture 1 Intro Parties and capacities Who are the parties to the transaction? **[Foreigner need approval form the Land Dealings Approval Unit (LDAU) under the Residential Property Act]** 1. Vacant Residential Land 2. Terrace House 3. Semi-Detached House 4. Bungalow/Detached House 5....

B24 REP Lecture 1 Intro Parties and capacities Who are the parties to the transaction? **[Foreigner need approval form the Land Dealings Approval Unit (LDAU) under the Residential Property Act]** 1. Vacant Residential Land 2. Terrace House 3. Semi-Detached House 4. Bungalow/Detached House 5. Strata Landed House (not within an approved condominium development under the Planning Act) 6. Landed Residential Property at Sentosa Cove 7. Residential Shophouse (for non-commercial use) 8. Association Premises 9. Place of Worship 10. Worker's Dormitory/Serviced Apartments/Boarding House (not registered under the Hotels Act) Regulations that affect transactions ABSD Important: Cannot backdate the purchase to avoid paying stamp duty Remission of ABSD 1. The residential property is held on trust for identifiable individual beneficiaries only 2. ABSD (Trust) of 65% has been paid 3. The application is made within 6 months after the date of execution of the instrument Free Trade Agreements - Foreigners eligible Under the respective FTAs, Nationals or Permanent Residents of the following countries will be accorded the same Stamp Duty treatment as Singapore Citizens: 1) Nationals and Permanent Residents of Iceland, Liechtenstein, Norway or Switzerland 2) Nationals of the United States of America Lecture 2 searches Describe what a title search is What is the importance of a title Search? Describe what **[a good root of title]** and how to establish a good title Explain how **[legal requisitions]** relate to title Lecture 3 Preparation of contract and concluding contracts Law Society's Conditions of Sale 2020 **[What is the effect of late completion?]** Late payment interest is imposed How to compute Stamp Duty on a contract **[Calculation]** 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. When and why to lodge a caveat Lecture 4 Sale of residential property What if the sale proceeds are **[not enough]** to repay the bank and CPF Board? Types of Contract **[1. Option to purchase (For resale property)]** **[Sailent options:]** 1) Property address check against title search confirm with clients 2) Price take clients\' instructions 3) Vendors\' particulars check against title search and also particulars against client's NRICs 4) To confirm with clients who are the purchasers 5) Payment Structure (i) Payment of 1% purchase price on issuance of Option (ii)Payment of balance 5% purchase price (less Option Fee) on exercise of Option -(iii)Payment of balance 95% purchase price (subject to adjustments for apportionment etc.) on completion **[Stakeholding Clause (Paid to the Lawyer\'s stakeholding account)]** From a purchaser\'s perspective, it is generally considered preferable to have the deposit held as stakeholders on the basis that if the purchase does not complete due to the vendor\'s default, it may be easier to obtain a refund of the deposit (where such refund is due). From the vendor\'s perspective, the vendor would prefer to have the deposit paid to him directly. If the purchaser is prepared to consider non-stakeholding of deposit, the purchaser\'s solicitor may wish to consider whether there are encumbrances on the property or whether the vendor can show that the balance purchase price is more than sufficient to discharge the encumbrances. Ultimately, whether there is stakeholding depends on the terms of the contract between the parties and is a commercial decision to be taken by them. **[Property is sold subject to Tenancy.]** As purchaser\'s solicitors, we should review tenancy agreement, especially on rent, security deposit, option to renew, to see whether there is any restriction on assignment by landlord and any right of first refusal in favour of the tenant to buy the property. **[How will the option be exercised?]** by: - Delivering (by hand) the Option to Purchase with Acceptance - Copy signed by the purchaser to the vendor\'s solicitors; and - Payment of balance deposit \*If cheque bounced, then it is considered late acceptance **[Legal requisitions (For the Government Authorities to respond)]** Legal Requisitions Take clients\' instructions on unsatisfactory replies and where the road line plan shows a road line or reserve, one should request the seller\'s lawyers for the developer\'s architect's confirmation that the affected area has been incorporated into the approved development plans or that the affected area does not cut into the building line of the property and sending replies and plans to valuers for confirmation that the valuation is not affected or that the affected area does not cut into the building line of the property. For road line plan, besides looking out for road reserve, we should also check that the property is not landlocked. Normally, banks require legal requisitions to be conducted no more than 6 months before completion. **[Completion timeline]** - Time for legal requisitions - Financing arrangements - Seller\'s usual redemption notice period of 2 months /3 months for some older mortgages What is the timeline for payment of stamp duty? What is the importance of lodgement of caveats? **[What is the timeline for lodgement of caveats?]** caveat has to be launched by the purchaser solicitor when the purchaser exercises the option or when the agreement is signed **[2. Sale and Purchase Agreement (for uncompleted properties)]** Payment due to the developer must be made within 14 days, failing which, late payment interest. **[When is stamp duty payable?]** Within 14 days of the date of the Sale and Purchase Agreement -- the Developer's lawyers will date the SPA after the Developer has signed the SPA. Thereafter, the Developer's lawyers will inform the Purchaser's lawyers of the date of the SPA. **[Progress payments to the Developer]** are typically made into a Project Account instead of directly to the Developer. Purchase repudiates the SPA if refuses to pay. Vendor forfeits the instalments paid and can repossess the house to resell. **[Defects Liability Period]** is 12 months, but covers only defects Developer is obliged to rectify. Mortgage documents Completed properties 1) Mortgage 2) Assignment of Rental Proceeds (Sometimes required) Uncompleted properties 1) Deed of Assignment (of the Mortgagor's rights under the SPA) 2) Mortgage-in-escrow Property tax needs to be proportioned between the purchaser and vendor Terms of the Contract **[4. LSCS 2020]** 7\. Satisfactory replies to Legal Requisitions Non-merger clause Capacities and the number of solicitors Duties of Vendor\'s solicitors Lecture 5 Mortgages and withdrawal of CPF monies Financing the purchase of a property CPFB's charge over property **[Consent of CPF Board]** Lecture 6 Completion Accounts **[Deductions that are usually made from the Sale Proceeds]** 1) Monies owing to the Bank under a mortgage 2) Monies owing to CPF under a CPF charge 3) Legal Fees 4) Property Agent's Fees and Commission 5) Other third parties what happens on Completion in relation to property tax and maintenance fees; 1) Property Tax and Maintenance Fees are usually prepaid in advance by the Vendor, so after apportionment the Purchaser's share is "added" back in the Completion Account. 2) Completion Monies must be prepared by the Purchaser by way of cashier's orders. Cheques are not accepted.