REP 1 - Introduction PDF

00:00 Welcome. For this segment, we\'ll be discussing preliminary matters. 00:08 The objective of this lecture is to give you an overview of conveyancing transactions. We\'ll be giving you examples to show you how conveyancing encompasses the different areas of the law. Now you learn how parties...

00:00 Welcome. For this segment, we\'ll be discussing preliminary matters. 00:08 The objective of this lecture is to give you an overview of conveyancing transactions. We\'ll be giving you examples to show you how conveyancing encompasses the different areas of the law. Now you learn how parties and their capacities, the type of property they acquire or divest, affect the transaction. Now we\'ll be taking you through some situations and from there you can see. 00:35 how regulations play a huge part in the obligations and rights of parties. The goal here is to build your foundational skills. This will be useful for commercial practice and during litigation when dealing with real estate matters. 00:56 All right, let\'s talk about the systems of land registration in Singapore. Two land registers coexist in Singapore. First, we have the Register of Deeds for Common Law under the Registration of Deeds Act. And the other, the one on the right, is the Land Titles Register, the Torren system for titles land under the Land Titles Act. Now, both these two land registers are administered by the Singapore Land Authority. 01:26 and this is a statutory board under the Ministry of Law. This forms the backdrop to the conveyancing process in Singapore. Now for the purpose of the real estate conveyancing subject, you will only be expected to learn the land titles register, the torrent system for titles land under the land titles act. However, you will not be expected to know about the procedures of land registration with Singapore Land Authority 01:56 In addition, you will not be required to prepare or review completion accounts for properties under construction relating to sub sales. 02:08 Now we come to parties. Now ask yourself, who are the parties to the transaction? What is their capacity in the transaction? Parties can be individuals, partnerships, companies or societies. So in terms of the capacity for individuals, if they are individuals, ask yourself, have they attained the age of majority? Now 21 years is still the age of 02:36 for the sale of land? Are the individuals sui geris or are they bankrupt? Do they have the capacity to acquire or divest? Is there any restriction against divesting or acquiring? For companies registered under the Companies Act, all companies have the general capacity to hold land. For societies, societies cannot hold land. 03:05 in their registered names, but they have to do so through their trustees. 03:13 So this leads us to the type of property being involved and the nature of the transaction, because there are some restrictions as to some types of property. Now, is the property private property or public? Is it owned by HDB? Now, if it is a HDB flat, HDB imposes control over ownership, acquisition and disposal. An example would be the eligibility of the purchases. 03:43 Now there used to be a five year minimum occupation period required for retention of a HDB flat. At the National Day Rally, NDR, on 20 August 2023, then Prime Minister, Mr Lee Hsien Loong, announced a new classification of flats to better reflect the locational attributes of HDB\'s build to order projects. 04:13 Now, we\'d also like to highlight that the above is purely just for your information, as we\'ve omitted HDB property transactions from the syllabus. For this lecture, we\'ll just be drawing examples using residential property. Now, in residential property, citizenship is crucial. Check your client\'s citizenship to see whether or not he is affected by the Residential Property Act. 04:41 Citizenship affects the ability of the party to acquire an interest in the property. Now, for example, only Singapore citizens can acquire an interest in all types of residential property. So if your client is a non-Singapore citizen, but a Singapore permanent resident, and if he intends to acquire residential property other than the non-restricted residential property, he would need to obtain the consent of the land dealings approval unit. 05:09 Otherwise, a transfer of such a restricted property to a foreign person would be null and void. For strata properties, if your client acquires strata property, he has obligations and rights under the Building Maintenance and Strata Management Act and the land titles Strata Act. An example would be the obligation to pay the maintenance and sinking fund fees punctually. Otherwise, interest would be payable to the MC. 05:41 Now, I\'m going to give you some examples of regulations affecting the transaction. The first would be a power of sale under Section 35.1 of the Conveyancing and Law of Property Act. Now, if you were acting for the executor in the sale of a property, you would have to ensure that the sale takes place within six years from the date of death of the deceased, unless the power 06:10 or sanctioned by the court. In a purchase or mortgage or residential property, your client may wish to use the CPF monies. Now, a myriad of rules apply, such as the withdrawal of monies are subject to limits at different points in time, the valuation limit and a withdrawal limit. No further use of CPF monies can be used once those limits are reached. For more information on these limits, 06:39 you may refer to CPF\'s website which is www.cpf.gov.sg 06:48 Next, we go on to stamp duty, which is perhaps one of the most talked about regulations. Additional buyer stamp duty or ABSD was introduced by the government on 8th December 2011. Now, this was introduced in addition to the ad valorem stamp duty payable on a document. What is ad valorem stamp duty? Well, it\'s the duty that is to be paid by the buyer under the 07:18 have a huge bearing on the payment of ABSD. Who are the affected buyers? Well, a foreigner who is not a Singapore Permanent Resident either, and non-individuals such as companies, partnerships, and societies. Now, you\'re expected to be aware of the latest ABSD and seller stamp duty SSD rates by referring to the IRA\'s website. Now, all residential properties are included in the count of properties owned by the buyer. 07:47 whether he owns it solely, jointly or partially with others. These include properties such as HDB flats, shop houses, vacant land zoned for residential use. Now, there are some foreigners that are given the same treatment as Singapore citizens. Who are these lucky foreigners? Well, Singapore had entered into free trade agreements with five countries. 08:15 So if your client is a national or permanent resident of one of these five countries, he will be given the same treatment as a Singapore citizen. Now it\'s easy to remember who these countries are with the acronym SULIN. That is Switzerland, USA, Liechtenstein, Iceland and Norway. Now what\'s the effect of non-payment or underpayment? For seller stamp duty. 08:44 If the seller is liable, IRAS or IRAS treats the document as not being duly stamped, even if the buyer paid the ad valorem duty. Now for additional buyer stamp duty, if the buyer is liable for ABSD, IRAS treats the document as not being duly stamped. Now IRAS is very vigilant in conducting audit checks, so you would have read the news about 09:13 where purchasers have abused the 9-1 shareholding structure in order to avoid stamp duty. Now, this is a timely reminder for all conveyances that they need to be very clear about the stamp duty rules imposed by IRAs and provide the correct advice to their clients. So, if deficient duty is paid or if the SSD or ABSD is unpaid, a penalty of up to four times the amount of deficient duty may be imposed. 09:42 Furthermore, the documents may not be, an unstamped document may not be registered with the Singapore Land Authority. The document may not be adduced as evidence in court. Payment of GST. Now, before we move away from the topic of residential property, only residential property is exempt for the payment of GST. For commercial properties, GST is payable by the vendor. 10:11 if the vendor is a taxable person under the GST Act. But parties are free to negotiate and usually the payment of GST is passed on to the purchaser. The nature of the transaction. Now it need not just be a purchase or a sale. It could be a mortgage, a lease, a license, a charge, subdivision, partition, amalgamation and so on. So it\'s always useful to bear in mind 10:39 the zoning and the use of the property. The master plan is under the purview of the URA. The master plan shows the permissible land use and density for Singapore. So for zoning it, it could be zoned residential, industrial or commercial. The use of the property. Now there are several types of uses, such as a daycare center, a shop or a food and beverage outlet. So if the place is zoned as residential, 11:07 the used would be a dwelling house. If the property was zoned industrial, and the use could be light industrial factory or warehousing. If it is zoned commercial, the use could be that of a retail shop unit. Now you should know that if you encounter property such as a two-story shop house that is mixed use, such as residential on the second story and commercial on the first story, differential rates of stamp duty will apply. 11:36 You can refer to IRA\'s website for more information. 11:42 For contracts, let\'s come to the formalities first. Contracts for the sale of land, as you know, under section 6D of the Civil Law Act, contracts for the sale of land must be evidenced in writing. So you could have an oral agreement, but there could still be a valid contract. For example, parties may conclude the contract through written correspondence. So in keeping with the times, email correspondence can be considered sufficient. 12:11 under 6D. Now, please refer to the case of Joseph Matthew and another and Singh Chin Ranjith and another. The citation is 2010, 1 SLR 338. 12:27 Now there are various means of concluding the contract and some contracts such as the Sale and Purchase Agreement for properties purchased by developers are governed by statute. Most of these contracts are subject to the Law Society\'s Conditions of Sale 2020. So these conditions must be looked at to see if they are applicable. For the purpose of this real estate course, you are expected to be familiar. 12:56 with the latest version of the law society\'s conditions of sale. The terms of a contract are always negotiated between parties. Nothing is cast in stone. Examples of conveyancing transactions other than those pursuant to a contract. What are they? It could be pursuant to a distribution under intestacy or to the terms of a will. It could be pursuant to matrimonial proceedings. 13:25 or an exercise of statutory rights such as the management corporation exercising its rights under the Building Maintenance and Strata Management Act, exercising its right of sale for unpaid maintenance fees. So to conclude from this lecture, you can see that conveyancing involves eligibility under the Residential Property Act, ownership and conditions and rights attached to land. 13:53 regulations on zoning and use, company and contract law, succession and probate law. In taking instructions from your clients, you will have to bear all these areas in mind so that your client\'s interest is not in any way compromised. Thank you. B24 REP - Lecture 1 Intro - Overview Different areas of law involved 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) - What is their capacity in the transaction? - Types of properties - HDB properties subject to HDB Rules (e.g. MOP) Non-residential - Residential - Regulations that affect transactions - Conveyancing & Law of Property Act (\"CPLA\") - must be within 6 years from death - CPF limits to purchase property - 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 - GST - Nature of the transaction - Formalities for contracts for the sale of land - Law Society's Condition of Sale 2020 - Systems of Land Registrations - Register of Deeds (Common Law) Land Titles Register (Torrens System)