Type of Tenure (leasehold - 99 years)
What to Know Regarding Type of Tenure (leasehold – 99 years)
There are three forms of tenures in Singapore: freehold, 999-year, and 99-year leasehold. The land belongs to the owner indefinitely for properties constructed on freehold ground in Singapore. So you don’t have to be concerned about your lease expiring except for the feared government acquisitions, such as the 4-story Thomson Road freehold property acquired to make way for the North-South Corridor.
It applies to 999-year leasehold homes to those extents because 999 years is long enough to house several generations. However, the Type of Tenure (leasehold – 99 years) properties is the most concerning.
What’s the significance of 99 years?
The 99-year lease agreement outlines both the lessor’s and lessee’s rights and obligations about the occupation of a property in exchange for a predetermined rental sum. The nature of the rights, the lease time, the duties of the lessor and lessee, conditional clauses, termination provisions, dispute resolution clauses, and other terms and conditions contained in the agreement are critical variables in the lease’s survival and any disagreement over the lease. The goal of having a timespan is to keep track of how much land is used and transferred. This interval was a safe bet because it covered the lessee’s life span in the past.
What happens when the 99-year lease ends?
The government owns the vast majority of the land in Singapore, and the Singapore Land Authority (SLA) looks after these valuable assets in this land-scarce city-state. The Housing and Development Board (HDB) and industrial landlord JTC jointly own some state-owned land. Privately owned freehold land accounts for a modest percentage of the total.
The government will reclaim the property, and the residents will lose all rights over the property, including the right to live there when a Type of Tenure (leasehold – 99 years) expires. Residents must vacate the property before the lease expires, or they will get punished with trespassing on state property. Former homeowners will receive zero compensation in exchange for their property.
Options for residents living in a 99-year lease property:
Pay Premium to Renew Lease:
The lease extension on the government’s planned use influences some sites or areas. Although lease renewal is a reasonable choice for unit owners in 99-year leasehold condos, particularly for those who desire to age in place and whose houses have sentimental value, not all tenants can afford to pay the hefty premium to renew the lease.
Notable Singapore developments that successfully renewed their leases with the SLA include Lumiere (formerly known as the HMC Building), 50 Collyer Quay House, and the SGX Building.
Get an En Bloc Sale:
It is also known as a collective sale, a popular alternative for those with aging private properties or residences with declining leases due to the strong potential of receiving a price based on the health of Singapore’s private residential market.
Property developers who want to redevelop the site are most buyers in an en bloc transaction. Because these are usually major corporations with a lot of cash, they can afford to pay a premium to extend the lease to 99 years and a development fee to expand the land’s usage.
