Conveyancing Process In Singapore
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First time buying property in Singapore? Make sure you’re prepared for everything! Learn about the conveyancing process to avoid any confusion.
When it comes to buying property, not everything is as simple as it sounds.
Most first-time property buyers in Singapore expect the whole process to be a walk in the park.
If you’re amongst that crowd, we have to say you’re in for a lot more than what you bargained for.
Buying a home isn’t the same as buying your favourite brand of cereal.
All you have to do in this case is simply walk up to the store, hand the storekeeper the money, and you can go home with your box of cereal.
On the other hand, buying property is a different ball game altogether.
Finding the right buyer, exercising the option to purchase, getting a loan approval; there’s just so much to deal with here!
Going at it alone as a first-timer will only confuse and disorient you, and you’ll wish you had just stuck to buying cereal.
Naturally, the only option you’re left with is to hire a conveyancing lawyer, which means spending more money out of your pocket.
But wait a minute, isn’t that pretty simple? Just hire a lawyer, and they’ll take care of everything, right? Wrong!
You can’t just hire ANY lawyer; you have to go for someone who dedicates their time to you instead of giving you the old run-around.
Otherwise, it’s just going to be you and your attorney’s answering machine for who knows how long.
Hint, even as we speak, the good ones are already overwhelmed by hundreds of conveyancing transactions.
So, yet again, you’re going to have to spend even more just so you can secure a lawyer who cares enough.
In fact, searching for the right lawyer can sometimes be even more frustrating than finding the right home to buy.
Well, if you haven’t run away already, we congratulate you; it looks like you really want to go ahead with the plan, huh?
Don’t worry, that’s why we’re here!
In this article, we’ll be talking about everything a first-time home buyer needs to know about the conveyancing process in Singapore.
What is conveyancing?
Property purchases in Singapore, be it private property or an HBD flat, always has to go through the required legal procedure.
Simply put, it’s just how real estate operations are supposed to be done.
The process of conveyancing is the legal process of transferring the title of property ownership from the seller to the buyer.
The entire processing time takes up to 12 weeks (three months) and will probably be the most expensive transaction you’ve made in your life.
So naturally, you’ll want to do everything you can by the book and in accordance with Singapore real estate law.
That’s why it’s so important to hire a professional conveyancing lawyer to ensure the interests of both you and the seller.
Plus, it’s not just about a simple transaction between you and the buyer, oh no.
Property purchases and sales in Singapore are like a family affair; by that, we mean you’ll have to deal with organisations like the Singapore Land Authority, The Inland Revenue Authority of Singapore and the Housing Development Board.
The conveyancing process for private properties takes place after the property seller has accepted your offer to purchase with the agreed-upon purchase price, provided that they have also received your cheque for the option fee.
It’s also important to note that the HBD board will act as your legal representative if you decide to buy an HBD flat.
So naturally, you will be obligated to pay the HDB the required fees that come with the purchase process.
Types of Conveyancing Fees in Singapore
Making a property purchase in Singapore is undoubtedly a costly affair and comes with a series of fees and payment obligations separate from the actual cost of buying the property.
Take a look at the list below for a clear understanding of your payment obligations as a buyer.
- Professional conveyancing fees are payable to your conveyancing lawyer
- Fees associated with bankruptcy and solvency searches on the purchasers and vendors are payable to the Ministry of Law.
- Fees related to the Road line plan search are payable to the INLIS via the Singapore land Authority.
- Fees and expenses of your CPF lawyers are payable to the CPF board.
- Title search process fees are payable to the Singapore land Authority.
- Fees for all legal requisitions are payable to the Seven Government Bodies.
- Fees regarding purchases and Bank caveat lodgement for transfer and mortgage are payable to the SLA.
- Fees regarding transfer and registration of property are payable to the SLA.
- Fees regarding the registration of mortgages are payable to the SLA
- Fees regarding the issue of cashier’s order are payable to the concerned bank.
The combined payable fees listed above usually come up to a total of $2500 to $ 5000, But wait, there’s more!
The list of fees presented above only has to do with purchasing private properties.
Note that HBD will be your legal representative if you opt to buy an HBD flat or an executive condominium and will present you their own fees.
It is also important to mention that a buyer or seller can choose to appoint someone else to act on their behalf during the conveyancing process.
This can be done via a power of attorney; however, it will likely increase the duration of the process to around 2 to 6 years.
In case you haven’t realised by now, the conveyancing process in Singapore is a long and complicated procedure that can drive a perfectly sane person into frustration.
Don’t be surprised if you find yourself pulling out your hair by the end of it all.
To understand what you’re in for, let’s take a detailed and step-by-step overview of the process.
It all starts with a little background research
It goes without saying that any property buyer must do their research when buying a property.
If you’re a foreigner, the type of property you’re allowed to purchase is limited to condominium units.
That’s because of the Residential property act, which bars any foreign person from buying landed residential property in Singapore.
Also, buyers looking to purchase an HBD flat should be aware of the ethnic integration policy, which balances the number of families of each ethnic group living in HBD blocks.
As a property buyer, you should clearly understand how big the area of the property you want to buy is, especially if you’re buying a piece of land.
course, one should also be clear about the price of the property and the total amount of the various conveyancing fees, property taxes and stamp duties attached to the purchase.
The next thing you want to do is figure out the financing option you will use to make the purchase.
This means having a good understanding of how exactly you’ll be paying for the property.
Most people approach a bank to get a housing mortgage and turn to their Central Provident Fund accounts to make the initial downpayment.
Getting your lawyer to conduct a title search
The purpose of your lawyer doing this is so that you can get all the property information you need as a buyer.
The first thing you want to know is the type of lease associated with the property, i.e. whether the property is freehold or leasehold.
A freehold property means that once you buy the property, it will solely belong to you, and you will be able to pass it down to your heirs.
Meanwhile, a leasehold property will come with a time limit, meaning you can only own it until the lease tenure runs out.
You cannot pass down a leasehold property to an heir as the property will be subject to the ownership of a different person from time to time.
So naturally, if you’re choosing to buy a leasehold property, it is imperative that you understand the number of years left on the lease.
Another important step is figuring out if the property has any prior encumbrances.
A property protected by caveats, i.e., a claim or interest of purchase made by a different person, will be difficult, if not impossible, for you to purchase.
If that is the case, you and your lawyer might have to take additional steps to remove any such claims or encumbrances from the property.
Lastly, you must find out the names of the property owner or owners before proceeding with the purchase.
If there are multiple owners, you must find out whether they own the property equally as joint tenants or if their ownership shares are divided as tenants in common.
The main difference between the two is that joint tenants both have an equal stake in the property.
Meanwhile, tenants in common usually have disproportionate shares, which depend on their respective contributions made while they bought the property.
Another essential objective of conducting the title search is confirming whether or not the property seller has a good root of title.
Having a good root of title guarantees that the current owner is the rightful and legal owner of the property and that the property itself is not defective to the extent that it cannot or should not be sold.
If you discover that the property owner does not have a good root of title, it likely means that the land is either unregistered, defective or simply illegal.
Therefore, it would be in your best interest to avoid attempting to purchase such a property as it might lead to legal complications in the future.
Once everything is checked out, you can then move to the next phase of the conveyance process.
Pay up and sign that contract!
So once you’ve locked into the piece of property you’re interested in and have conducted the necessary due diligence, it’s time to start the negotiations.
You don’t have to do much for this part and can rely on your lawyer to discuss the option to purchase or the sale and purchase agreement with the property seller.
If you’re satisfied with the terms and agreements, you can now sign the required document, i.e., either the option to purchase or the sale and purchase agreement, whichever is used for this particular transaction.
After this is done, your lawyer will then proceed to lodge a caveat on the property with the Singapore Land Authority to notify them of your interest and intention to purchase the property.
Doing so will prompt any third parties to notify you and your lawyer in case there are any subsequent dealings that you are unaware of, which could affect the property purchase.
You will now be obligated to make the initial downpayment for the property, which usually amounts to a small percentage of the purchase price minus the booking fee.
Should you choose to not proceed with the purchase, or if the seller breaches any terms of the agreement, then you may proceed to notify the seller with written notice of cancellation and collect any previous option money paid to them.
Let’s suppose all goes well and fine with the decision to purchase.
In that case, you will now be obligated to pay the conveyancing money to your lawyer, who will place the amount into a conveyancing account.
This conveyancing account can either be an account opened by the lawyer’s law firm or an escrow account jointly owned by your lawyer and the seller’s lawyer.
Alternatively, you can also use the conveyancing money service the Singapore Academy of Law provides.
Either way, the chosen conveyancing account will be the official medium through which all payments will be made to the seller.
Option to Purchase (OTP)
The option to purchase is an integral part of the conveyancing process and is granted by the seller to the buyer for a payment of 1 % of the option money (deposit/option fee).
In the case of private properties, the OTP needs to be exercised within 14 days from the date of issue by paying a deposit of usually 4 % of the purchase price.
However, you can negotiate with the seller to increase the option period to give you more time to exercise the OTP.
Regardless, If you fail to exercise it within the valid option period, you will lose the 1 % option fee previously paid.
Let us use an example to help you better understand the topic.
Say the purchase price is $ 1.5 million, which means the option fee of 1 % will be $ 15,000.
Before the option period expires, you will have to pay typically 4 % of the purchase price as the initial deposit.
That means you will be obligated to pay an amount of $ 60,000 to exercise the OTP.
After that, you are liable to pay the buyer’s stamp duty and any additional buyer’s stamp duty which might be applicable.
Now, your lawyer can proceed with the conveyancing process, which usually takes around 12 weeks, after which you must pay the remaining amount.
Once that is done, you will receive the title of ownership of the property, which will be registered with the Singapore Land Authority.
That being said, it’s important to mention that the OTP works differently for completed condominiums and those still under construction.
In the case of condominiums still under construction, you will have to pay a booking fee to the developer, usually fixed at 5 % of the purchase price.
So, for example, if the property costs $ 1 million, the OPT will be set at 5 %, which is $ 50,000.
After receiving the sale and purchase agreements from the developer, you will have a fixed period of 3 weeks to exercise the OTP, which you can do by paying 20 % of the property price within 8 weeks from the date of issue.
If you fail to do this within the option period, the developer will forfeit 25 % of the booking fee and refund you 75 %.
Once the sale and purchase agreement has been accepted and verified, you will have 14 days to pay off the buyer’s stamp duty or additional buyer’s stamp duty that may be applicable.
Since this is still a unit under construction, you have the option to pay the total amount using a progressive payment method.
This means that you only have to pay for the portion of the already constructed unit, i.e. you only have to pay every time a certain construction milestone has been reached.
This is a great option if you are not in a hurry and would rather wait a few years to move into your new home.
Moreover, once the unit has been completed, you are obligated to pay 6 months of maintenance and survey fees before receiving your property’s keys.
Things to note when choosing a law firm
Choosing the right law firm to suit your needs can be confusing if you are new to Singapore real estate.
This is why we’ve listed all the qualities and fields that are an absolute must for any good conveyancing law firm in Singapore.
You better grab a cup of coffee because this will be a long one.
According to us (and common sense), a good conveyancing law firm must be able to provide expert and professional service in the following fields.
- Dealing with the options and sale & purchase agreements for the sale of all types of properties.
- Dealing with the purchase and sale of residential, commercial, and industrial development projects.
- Expertise in qualifying certificates for developers.
- Expertise in housing developer’s licences.
- Must have in-depth knowledge and skill regarding project account schemes.
- Must have expertise in dealing with the sale of individual units in development projects.
- Dealing with the issuing of individual titles for various development projects.
- Must be an expert in dealing with property tax.
- Must be able to complete the transfers of titles within the time limit.
- Must be able to issue the correct documentation for mortgages, debentures and any security concerns.
- Expert skill in regularisation of land tenures, amalgamation and land subdivisions.
- Dealing with collective en-bloc sales and purchases.
- Must be able to conduct title searches at the relevant ministries and registries.
- Must be well versed in the process of land conversion to the Torrens systems of registration.
- Expertise in the construction of loan documentation.
- Expertise in extraction and subdivision of titles.
- Must be able to make appeals and applications to planning authorities.
- Must be able to advise management corporations established under the Land titles act.
- Must be well versed in the process of regularising land tenure to the Torrens registration system.
- Must be able to auction and tender land purchase documents offered by the government, private sector, or other statutory bodies.
Other than the above-listed services, a good conveyance law firm must also be able to provide sound advice on the provisions of all relevant statutes and their related subsidiary legislations and regulations.
These may include-
- The Housing developers Act (Control and licensing)
- Conveyancing and Law of Property Act
- Sale of Commercial Property Act
- Executive Condominium Housing Scheme Act
- Registration of Deeds Act
- Land Titles Act for the following areas
- Building Control Act
- Planning Act
- Land Titles (Strata) Act
- Residential Property Act
- Building Maintenance and Strata Management Act
Finally, they should also be well versed in any amendments to the prescribed Option form and the sale and purchase agreement under the housing developers act. (Control and licensing)
Conveyancing Fee for Property and Real Estate
Property conveyancing firms are crucial middlemen and negotiators who can ensure that all transactions are done in accordance with Singapore property law.
You might think having them is unnecessary and choose to go ahead with the purchase on your own, but we advise you not to do this.
Property purchases involve the exchange of vast sums of money between two parties and come with many risks.
For example, what if the seller simply runs away without handing you the ownership title even after you have made the full payment?
Moreover, without a conveyancing lawyer, it would be difficult to procure the required property information and other crucial details such as hidden encumbrances.
Alternatively, it might even turn out that the seller did not even own the property in the first place.
So, to mitigate these legal risks, it is always a good idea to hire a conveyancing law firm that can handle everything legally.
Property conveyancing services always come at a fixed rate, so you won’t have to pay your lawyer by the hour.
If we’re looking at the lower spectrum, a typical conveyancing service charge would cost you around $ 2000 minimum.
This is the base charge for handling basic conveyancing transactions where there are no chances of encumbrances, such as purchasing a fresh condominium unit.
On average, most law firms will charge you a conveyancing fee of around $ 2500 for the purchase of a resale flat or commercial property.
If you want to hire a law firm which is a popular name, you might have to step a little bit on the more expensive side.
A prestigious law firm with a good reputation will charge you a minimum of $ 3000 for a simple transaction where there are no complications.
However, if the case is highly complicated, for example, if you want to purchase multiple units or buy property overseas, you are likely to be charged much more.
How much does conveyancing cost in Singapore?
A simple conveyancing transaction can cost anywhere between $ 2000 to $ 2500.
However, if your transaction is a bit more on the complicated side, don’t be surprised if your law firm starts its quotation from $ 3000 and goes somewhere around $ 5000 or above.
It really depends on the reputation of the law firm and how complicated or big your transaction is.
Best Conveyancing Lawyers in Singapore
When looking for a conveyancing lawyer in Singapore, it goes without saying that you should only hire one of the best.
That’s why we’ve carefully compiled a list of Singapore’s top 8 conveyancing lawyers.
Each one of them comes with a stellar reputation and in-depth expertise regarding Singapore’s real estate law.
- Tan Lee & Choo
Established in 1972, Tan Lee & Choo is one of Singapore’s oldest and most renowned conveyance law firms with absolute expertise in conveyancing, litigation and divorce.
This is why many regard them as a full-service law firm.
They were featured in the top position in the best 11 family law firms and also the top conveyancing law firm in Singapore.
Not to mention they take the top position in our list as well.
Moreover, they have a multilingual staff who are well versed in Mandarin, English, Cantonese, Malay, Hokkien and Teochew dialects.
With so much to offer, this law firm is definitely on the expensive side, but we can guarantee that it will be worth the money spent.
- Loh Eben Ong LLP
Established in 1994, Loh Eben Ong LLP is a well-reputed Singapore law firm that specialises in conveyancing law, commercial law and family & business law, amongst others.
Apart from the conventional means of service, they also provide reliable and professional online services, which gives them an edge over other firms.
They are a client-oriented firm, which means they handle almost every aspect of your case.
They will accompany you in each and every courtroom session and still have enough time to personally handle tasks such as processing your documents.
Clients have hailed them for their acute attention to detail and impressive efficiency, regardless of whether you have a huge case, or a minor one.
- Tan Lee and Partners
Tan lee and Partners started their journey as a small and humble law firm in 1978.
Over the past 30 years, this tiny firm has grown at an impressive scale and has made its mark in the market.
Specialising in conveyancing law and intellectual property matters, this dedicated law firm always changes and upgrades with the passing time.
This keeps them fresh and up to date with all the latest regulations in the legal world.
All of their lawyers come with impeccable track records and are fully dedicated to providing you with sound legal assistance.
- Law Advice Now
Although this isn’t exactly a law firm, it’s still worth mentioning on our list.
Law Advice Now is a professional portal you can visit whenever you need legal advice.
The portal allows you to connect to several reputable professional lawyers who can help you with your conveyancing matters.
- Ho & Wee
Ho & Wee was established in 1984 and carries an experience of more than 30 years in the industry.
They provide legal services in a variety of fields, including conveyancing law and come highly recommended by their family of happy clients who range from high-value Individuals to multinational corporations and businesses.
- APEX Law
This is one of the few names hailed as one of Singapore’s best law firms of 2021 by renowned research companies such as Statista.
APEX law is a professional firm with a solid reputation and is currently on a steady rise in the market.
Their services are cost-effective yet highly effective and satisfactory, while their offices are conveniently located.
APEX law specialises in conveyancing law and has found countless clients who have hailed them for their dedication and hard work.
- Alpha Law LLC
Founded in 2009 by the highly regarded and reputable attorney William Ong, Alpha Law LLC has steadily grown as one of Singapore’s top law practices in the field of conveyancing law.
Mr Ong carries an impressive track record during his 34 years of service and has the privilege of being appointed as a notary public by the prestigious Singapore Law Academy.
Alpha Law LLC is reliable, efficient, hardworking and highly dedicated to its clients.
They will always give you the best result possible.
- Ohmyhome Pte Limited
Ohmyhome is one of Singapore’s most trusted and reputable companies when it comes to property purchases.
This firm will provide you with effective and professional conveyancing services, which you will be highly pleased with.
What’s more, they will be with you from the start and guide you through the entire property purchasing experience to get the most satisfying result.
How long does a conveyancing transaction typically take?
How much time it takes for a conveyancing transaction to take place depends on the kind of property you are purchasing.
In the case of resale property, the conveyancing transaction usually takes place between 8 to 12 weeks after you exercise the OTP.
On the other hand, the time taken for the conveyancing of a building under construction directly depends on the current stage of the construction at the time of purchase.
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