Why Do We Need A Property Lawyer When Buying A House
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Thinking about buying a home? Don’t go through it by yourself! Always hire a property lawyer to take care of the legal side of things.
You know you’ve come to the big leagues when you’re contemplating buying property for yourself.
Congratulations, it’s definitely one of the biggest steps you can take as an adult and marks you as a successful person.
However, as we all know, buying property in Singapore is not for the faint-hearted.
There are hundreds of thousands of dollars you have to spend, if not millions, and a whole bunch of legal procedures that you might not be able to understand.
The best way to go about it is to hire a property lawyer who can handle the legal aspects of the transactions involved.
Granted, you will have to spend a few extra thousand dollars on hiring a decent lawyer, but we assure you the money won’t go to waste.
You might have come across a friend or relative who insists there’s no need to hire a lawyer at all.
Such people will tell you that it’s easy to do the entire process by yourself, making the lawyer a redundant factor.
Remember, just because that one uncle who constantly gives you unnecessary advice says so doesn’t mean that’s the case for you.
To be honest, buying residential properties in Singapore isn’t rocket science and is a simple enough process if you know what you’re doing.
But unless you’re a pro at making real estate transactions, it will get quite confusing for you while going at it for the first time.
That’s why engaging professional and knowledgeable real estate lawyers is a key factor to a happy purchasing experience.
Trust us; you’ll be glad you have one to watch your back when all the legal paperwork starts flooding in.
What Does A Property Lawyer Do?
Most first-time property buyers are clueless about what a property lawyer does.
In fact, it’s one of the reasons why some first-time buyers don’t find it necessary to hire one.
So, before we go further down the line, let’s start by discussing the role of a property lawyer during a property purchase transaction.
The major reason why you need a property lawyer is because of the conveyancing process.
As you are well aware, buying property in Singapore isn’t as simple as walking up to a store and paying cash for an object you want.
There are heaps and heaps of documentation to be done, paperwork that needs to be assessed, and background research that needs to be conducted.
Moreover, buying a property requires an official transfer of ownership title from the seller to you, the buyer.
This legal transfer of ownership requires the use of official documentation, which is where a property lawyer, otherwise known as, a conveyancing lawyer, comes into play.
To understand exactly why you need a lawyer, here are 8 ways a property lawyer can benefit you.
- Handling All The Pesky Documentations And Paperwork
Buying a property is already hard work on your part; there’s no need for you to be bogged down by tons and tons of paperwork in the process.
That’s why it’s always a good idea to hire a property lawyer who is trained in handling such paperwork.
A first-time property buyer like you who has zero experience with documentation assessment will most likely be overwhelmed by the endeavour.
Just to give you an insight, buying property includes handling documentation such as your housing loan application, your title deed, insurance application, SPA documents etc.
Now, if you’re exceptionally smart, you can somehow manage to do all of this on your own.
However, can you complete all of it without any mistakes and submit them all before the required date?
Having a lawyer expedites the process as you will have someone to advise you on them and help you quickly get through the most crucial parts.
What’s more, your lawyer will be able to detect what items are needed to ensure the deal goes through.
Also, he can advise you on what tenancy type to choose and whether or not the subject property has any downfalls that you may not be aware of.
- Making Sure Nobody Takes Advantage Of You
The residential property market is always layered with risks that don’t necessarily show up on the surface.
Especially with private properties, you often discover these risks only when it’s too late.
For example, there could be a shifty property holder or owner who entices you by offering a great deal, only to dupe you in the end.
Let’s come up with a hypothetical scenario to explain and say that property ‘A’ is a private flat being sold at half of the price of its market value.
The owner says that he urgently needs money; therefore, he wants to sell it off quickly at half the price.
Naturally, this will seem like a great deal for you as you won’t have to spend the entire market value of the property.
The owner then asks you for an advance downpayment without having drawn up the paperwork, citing an urgent need for cash.
He assures you that the paperwork will follow soon, so you chalk up the money without thinking much of it.
After all, with a sale price this low, you would naturally want to make the seller happy.
However, just weeks after having made this advance payment, there is no word from the seller, who seems to have disappeared.
As it turns out, the property was never on sale, and the person you were dealing with, wasn’t even the legal owner.
In your desire to save money by going for a cheap deal, you’ve spent a ton of it just to be duped in the end.
Now, if you have a property lawyer by your side, he can do the necessary background check on the property as well as the owner to ensure there isn’t anything fishy on the table.
Your lawyer will run a check on the property price and determine whether the price offered by the current owner is fair.
Next, he will do a check on any debts that the property holder has, such as outstanding mortgage payments on the property.
Moreover, he will check if any aspects might interfere with the overall conveyancing process.
- Sending Out All The Legal Requisitions
You might not know this as a first-timer, but buying property involves sending a lot of legal requisition forms.
In fact, as a property buyer, you have to send out legal requisition forms to nine different government agencies.
Now, while most people think that is overkill, this is something that’s quite a necessity in Singapore.
Because of the limited amount of land available in this country, we have to be very careful about where we set up our homes.
For example, what if you buy a condominium unit which is supposed to be your permanent home, only to discover that the whole building is supposed to be torn down to make way for an MRT station?
Sure, you’d receive the necessary compensation from the government, but you’d still have to look for a new place.
Wouldn’t it be better to know these things beforehand so you can avoid this kind of pending catastrophe?
That’s what your lawyer is there for; to ensure that any purchase or sale of housing units comes without any legal ramifications and exploitative loopholes.
Your property lawyer will effectively send out the required requisition forms to the following government agencies.
- Land and Transport Authority for MRT works (Survey and Lands Department)
- Land and Transport Authority for street works (Survey and Land Department)
- Land and Transport Authority for Road Line Plan
- Public Utilities Board department for sewage and drainage (Water Reclamation Network)
- National Environment Agency (Health department) for any outstanding issues related to drainage choking or mass breeding of mosquitoes.
- Building Control Authority for any upgrades or additions made to the property
- Inland Revenue Authority, if there is any outstanding property tax
- National Environment Agency (Central Building planning unit), in case the subject property is affected by the current scheme regarding drainage.
- URA, to ascertain the zoning of the master plan
These requisitions are required to make sure that there is no conflict of interest between your property and the Singapore government.
While you technically can send out these requisitions by yourself, it always helps to employ a lawyer who is already knowledgeable in the procedure.
Singapore law dictates that you only continue with the property purchase process after all these requisitions have been improved.
So forget negotiating the purchase price or drawing the purchase agreement unless you have all these documents sent out and approved.
- Exercising And Stamping The OTP
As we are all aware, buying a property involves stamping and exercising the option to purchase before you can actually get to the main payments.
Your property lawyer will do a great job at handling that for you; all you have to do is pay him the normal option fee and the deposit amount.
Your lawyer will then take that amount and pay it to the seller’s law firm, as this amount will now be placed as a stakeholder until the transaction is completed.
This may surprise people who think that the seller is immediately handed the deposit amount; as we can see, that is not the case.
So instead of this being a transaction between the buyer and the seller, it is actually a transaction between the buyer’s lawyer and the seller’s law firm.
- Helping You Get Your Finances Into Shape
If everything works out well and fine, you’ll be at the stage of getting your finances in order so you can make the big payments.
For most people, this usually means getting a highly awaited mortgage letter from the bank.
Some people like hiring a separate lawyer to handle the finances and the transactional aspects and a conveyancing lawyer just for the ownership transfer.
While this is technically an effective way to go about it, we really do recommend having the same lawyer help you with the whole process.
Not only will be it cheaper, but it will also be more convenient for you in the long run, especially when he’s fine with handling the mortgage documents.
After that, your lawyer will act as your representative to the bank and will get the payments from the loan and pay the seller, be it the property’s current owner or a building developer.
It is important to make the payments for the property on time, which you might not be able to do if you have a busy work schedule, so that’s another reason to lawyer up.
In case you’re using your CPF funds to pay for any portion of the property purchase, it will be up to your lawyer to place a CPF charge on the payments.
From this point, it will be your lawyer maintaining direct communications with the CPF board and collecting the payments as they are required.
Meanwhile, you can carry on with your life knowing that everything is being taken care of despite your absence.
- Handling Progressive Payments
Paying for your property using the progressive payment scheme is sometimes much better than paying for the whole unit at once.
But of course, this will only work if you’re buying a new launch condo under construction.
Contrary to popular belief, you won’t have to be tracking down the progress of the building that is under construction, not when your lawyer can do that for you, silly.
When this is the case, your property lawyer will do the needful and maintain your file for years to come as he keeps track of the progress and deals with the payments to the property developers on your behalf.
Here’s how it works, housing developers send notices to lawyers of property owners each time they finish a stage of the construction.
This notice includes the amount that is due to be paid and the deadline for the payment.
Depending on who is supposed to pay for the particular portion, the lawyer will either notify the owner (you), the bank, or the CPF board.
Now, the lawyer will do the difficult task of nagging the concerned party for the money until he actually receives it and can pay off the developer.
When everything is completed, your lawyer will be the first person to know when the Temporary Occupation Permit has been dispatched.
This effectively makes your lawyer the initial bearer of this good news, so be sure to hug the man before you collect your key and move into the property.
- Helping You With Completion
Buying a resale flat or any form of completed real estate property, such as a terrace house, can be highly confusing for you regarding how much money you need to pay.
That’s because you’re not only dealing with the private housing prices but also the property agent fees, MCST fees, utility charges, etc.
But don’t worry; as always, you can leave it up to your lawyer to meet with the buyer’s lawyer and have a sit down to exchange the various payments needed.
All you have to do is sit back, dispatch the money when your lawyer says so, and collect the keys when it’s time.
- Helping You With Post-Competition Administrative Work
So now you’ve finally collected the keys and moved into your new house, everything is done, right?
Wait, not so fast, buddy; your lawyer still has to deal with some admin work, such as sending notifications to IRAS and the property tax department.
This is so that these agencies now know that the property belongs to you and that they should pester you when it comes down to paying taxes.
This goes without saying that any real estate property purchase transaction amounts to months or even years of hard work and punctuality for your lawyer.
It is his responsibility to make sure that your file is monitored diligently and that none of the deadlines are missed.
You might even find it annoying when your lawyer calls you to come down to his law firm and sign some documents or nags you to dispatch that latest payment.
But do remember that they are only doing what’s necessary, so don’t take it personally; they’re only looking out for you.
I’m Selling My Property Instead. What Does A Lawyer Do For Me?
Hiring a property lawyer doesn’t always mean that you’re buying property; it could be the other way around as well.
People hire lawyers both to handle purchase transactions as well as the sale of housing units in the public or private housing market.
If you happen to hire a conveyancing lawyer for the purpose of selling your property as opposed to buying a new one, the list of responsibilities carried out by your lawyer will be different.
It will be the job of your lawyer to check whether you have any outstanding mortgages on the property and if there are any penalties payable in case of the early redemption of the previous mortgage.
Moreover, your lawyer will also check whether your CPF funds have been used in the purchase of your previous property.
Once he has done all that, he will submit a necessary notice to the bank for the discharge of the mortgage and the CPF board for discharging the CPF money.
On top of that, it is also within your lawyer’s responsibility to prepare proof that you have paid all miscellaneous charges.
This includes things like any applicable property tax, mortgage dues, MCST charges, maintenance and utility charges, etc.
Some lawyers even draw up an inventory list of furniture and items that are included in the sale.
It might seem like a redundant thing to do, but it’s always good to avoid any misunderstandings with the buyer.
Property Lawyer Prior To The Purchase
Contrary to popular belief, the job of the property lawyer doesn’t start when you choose to go ahead with the property purchase, but even before that.
Your property lawyer will do a background check and look out for a list of crucial factors while buying residential property in Singapore.
As we all know, buying property in Singapore is never that simple and comes with various factors that affect all buyers.
If you are thinking of buying landed residential property in Singapore, it is important to know that you must be a Singapore citizen.
According to the Residential Property Act, landed residential properties are only reserved for Singapore citizens.
Foreigners and permanent residents have to right to purchase private properties such as condominium units.
However, foreigners do need to get the permission of the board of Controller of Residential property if they want to acquire landed properties, for example, terrace houses.
This board usually consists of a deputy and an assistant controller, who will most likely be involved in handing out the approval.
- Land/Floor Area
Your lawyer will also consider the property’s size, floor area, or the size of the land in case it is landed property.
Your lawyer will also make a note of expenses you have to pay for other than the actual price of the property.
This includes stamp duty taxes such as buyer’s stamp duty, Additional Buyer’s stamp duty if applicable, and the conveyancing fees involved.
Always remember that the ABSD rates factor differently depending on your nationality.
While Singapore citizens only have an aggregate ABSD rate on the second or third property purchase, Permanent residents and foreigners have to pay the applicable ABSD Rates on all property purchases.
Of course, these rates depend on various factors and will differ from situation to situation, and also depending on the property count.
For example, both Singapore permanent citizens and foreigners have to pay ABSD on all property purchases, but the payable rate on purchase is different for each group.
Permanent residents have to pay 5 % on their first property, 25 % on their second, and 30 % on their third property.
Meanwhile, foreigners, on the other hand, have to pay a flat 30 % ABSD rate on each purchase.
The rate for entities, such as companies, also differs from the previous two groups, having to pay 35 % for each property purchase.
If you are in the business of housing development, you will be getting an additional non-remittable ABSD rate of 5 %.
On another note, ABSD also applies in the case of the transfer of property from one owner to another.
This is also applicable when property owners transfer their residential property into living trusts, with a rate of 35 % ABSD.
Meanwhile, residential properties transferred into any trust for the sake of housing developers will be subjected to a 40 % ABSD rate (35 % remitted upfront, 5 % non-remittable)
Be advised that any consideration for stamp duty remissions for entities such as a Housing Corporation are subject to remission conditions.
It is important to have a sit down with your lawyer to go over these details, as they usually amount to a significant portion of your finances.
Also, keep in mind that property cooling measures such as ABSD are subject to increases depending on the condition of the real estate market.
The reason why ABSD Rate Increase is a common factor is that it is a measure taken to prevent housing prices from skyrocketing.
- Financing Options
Your lawyer will also help you mull over the various financing options available for you for your purchase.
If you are buying an HBD flat, you always have the option to take a loan from HBD itself or whatever bank you choose.
As for private property purchases, you are only limited to applying for loans from private banks.
Spend time with your lawyer to understand the various interest rates and conditions banks provide.
Ideally, you want to buy a property in a low-interest rate environment, which can definitely be hard to come by as it depends on various uncontrollable factors.
For example, in the United States of America, a low-interest rate environment is usually determined by the low-interest rates of treasury securities.
- Conducting Research
Finally, your conveyancing lawyer will research the property market and look into the ownership title of the property you want to buy.
This will confirm that there are issues with the seller’s ownership status and that there are no hidden strings attached to the property.
How To Choose The Property Lawyer
A conveyancing lawyer will charge you easily up to $ 2000 to $ 3000 for the entire process.
While this might not be a big amount for some, the majority of buyers often try to avoid paying this steep price by opting for a cheap lawyer.
While we admit that it’s technically a good way to save money, you must also understand the ramifications of doing so.
The ideal lawyer should be reputable as well as affordable, which means that you shouldn’t generally go for the closest cheap option you get.
We’ve developed a few guidelines to keep in mind when choosing a conveyancing lawyer for your property purchase transaction.
- Know What You Are Paying For
You’ll be more comfortable paying your lawyer if you know what he does for you during the process.
Most people feel like they are being ripped off because all they see is a fancy lawyer in a suit writing up a bunch of statements on Microsoft word that hardly takes an hour to complete.
In reality, a lawyer’s duties are not only limited to writing up requisition forms but also checking the Option-to-Purchase details and helping you get your CPF money as well as loan amount to pay for the property.
When your lawyer is not working in the background, he will provide you with a complete breakdown of all the expenses, stamp duty payments, and initial downpayment you must make.
What’s more, your lawyer also represents you in front of the bank and does what is necessary to make the bank release the payments required for your purchase.
Finally, your lawyer digs up any dirt he can find on the property seller to determine whether or not there are any issues with the seller’s certificate of title or if there are any collateral debt payments due that you are unaware of.
- Lawyer Up BEFORE You Sign That OTP
Most people decide to go ahead and sign the Option to Purchase without having hired a lawyer beforehand.
In our eyes, this is a big rookie mistake and should never be done under any circumstances.
This gives the seller a chance to put some ‘extra’ terms that you might not be aware of or create an OTP that’s only immensely favourable to them while leaving you with a disadvantage.
Having a lawyer by your side will prevent a scenario like this; meanwhile, you could also let your law firm check if there are any pre-option agreements that you might not be aware of.
A quick way to find a decent law firm is to ask your mortgage broker for any references.
- Always Compare Prices
The price factor is usually what makes or breaks a decision to hire a particular conveyancing lawyer.
Be aware that the usual market rate for a decent conveyancing lawyer is around $ 2500, but you might find one who is willing to do it at $ 2000 if you’re lucky.
You can also ask your mortgage broker to find one in the price range you are comfortable with.
Although it is not part of your brokerage agreement, they will naturally be inclined to help you; what else are they going to do; lose a client?
- Do A Background Check On Your Law Firm; Check If They Are On The Bank Board
It is important to know that certain banks will only accept law firms that are on their ‘’board’’.
What’s more, this list of law firms included in their wing can also change from time to time, so you have to watch out for that.
The ideal hire would be a law firm that is both affordable and on the board of almost every bank where you might end up applying loans for.
This will allow you to easily switch banks later if you find the need to do so; just keep in mind that your mortgage broker might also try to persuade you to use a law firm which is friendly to them, which might not necessarily be in your best interest.
- Run A Google Search On The Law Firm You Want To Hire
If Google doesn’t recognise the particular law firm you’re looking to hire, chances are they don’t have a significant reputation yet.
Of course, law firms that charge you a cheap rate might not be big or considerable enough to be on Google yet.
But it’s always good to hire one which comes trusted by the Internet and has loads of 5-star reviews.
- Make Sure You Law Firm Is There For You
Some law firms have the nasty habit of disappearing after they get their clients to agree to their fees.
Remember, you are the one paying for it, so you have the right to bug them regarding any questions or doubts you might have.
Make sure that they explain to you all the details of the OTP and alert you of any red flags that might be present.
Also, you can always call them if you have any changes you want to be made on the OTP, such as extending the option period.
Always ask your lawyers for a second opinion despite your property agent giving you the all-clear on a certain document.
Keep in mind that property agents always want to close the deal quickly, so they might not be too excited to tell you if any complications might delay the transaction.
So, it’s always good to have your law firm checking every detail and pointing out any issues on the OTP; after all, that’s the whole point of the practice of law.
What Is legal Conveyancing?
Legal Conveyancing refers to the process of legally transferring the ownership of property from the seller to the buyer.
This includes everything from before the purchase takes place, all the way to the end of the purchase and the actual transfer of the title deed.
The conveyancing lawyer’s job is to assess each and every set of documents needed in the transaction and give you legal advice regarding the transfer process.
They can also help you secure financing from a bank and carry out the necessary payments required during the purchase, as well as miscellaneous expenses such as payments for stamp duty purposes.
Moreover, they will also notify you of any changes or hidden or unfavourable terms present in the sale & purchase agreement.
The conveyancing lawyer will also help you meet the eligibility standard for various loans that might seem out of reach otherwise.
Overall, a conveyancing lawyer prevents any mishaps during the purchase process and ensures that you don’t miss deadlines regarding the verification or the OTP signing and exercising process.
Judging by everything we’ve discussed so far, it would be safe to say that a conveyancing lawyer is absolutely necessary in most cases.
How Much Do Conveyance Services Cost?
Although most people would prefer to pay the cheapest rate, we have to understand that it might not be possible for the law firm to offer such a low rate when it comes to conveyancing.
That’s because, other than the personal fees of the lawyer, there are several other payments involved which have to be doled out to various departments.
Here is a list to give you a proper insight into the list of service costs which are inclusive of the final conveyancing charges of the law firm.
- Conveyancing lawyer’s professional fees.
- Title search charges payable to the Singapore Land Authority.
- Legal requisition charges payable to the Urban Redevelopment Authority.
- MCST certification charges payable to Singapore Land Authority.
- Mortgage Registration fees payable to the Singapore Land Authority.
- Mortgage Stamping fees payable to the Inland Revenue Authority of Singapore.
- Banking fees related to the issue of Cashier’s order.
- CPF Lawyer charges
- Charges for searches solvency and bankruptcy searches on vendors and purchasers; payable to the Ministry of Law.
- Road line plan search charges.
- Charges for lodgement of bank and purchaser caveat for transfer and mortgage.
- Charges for registration of transfer payable to Singapore Land Authority.
As you can see, your conveyancing lawyer will have to deal with a long list of expenses during the process.
Considering the above list, it is wildly unprofitable for a lawyer to charge around $ 2000 for a single client.
Doing so will not bring any profit into the firm, removing any incentive for the firm to provide decent service.
The only way they could earn a profit by charging this amount would be if they resort to providing sub-par service or attaching some hidden fees that they might charge you later on.
So, while $ 2000 might seem steep for a conveyancing lawyer, try to understand that it is an expensive ordeal.
Rather than going for the cheapest option, one should understand what’s at stake and be willing to pay the required amount to ensure that there are no compromises during this crucial process.
Don’t be surprised if you decide to go for a lawyer that charges you $ 1000- $ 2000, who then disappears when you need him the most.
For such low prices, you can only expect to speak with his secretary who blatantly tells you that he is unavailable at the moment.
This will leave you unsatisfied as your lawyer will not be at your beck and call and won’t be there to go through the document’s important aspects.
We have provided a price guide that you can refer to in order to determine what a reasonable rate would be for various conveyancing procedures.
- Purchase or resale private property-=$ 2500 to $ 3000 minimum flat rate.
- Purchase of BUC private property= $ 2500 to $ 3200 minimum flat rate.
- Sale of private property = $ 2300 to $ 2800 minimum flat rate.
- Purchase of HBD flat = $ 1800 to $ 2500 minimum flat rate.
- Sale of HBD flat = $ 1300 to $ 2000 minimum flat rate.
- Refinancing of private or HBD flat = $ 2000 to $ 2800 minimum flat rate.
Note that this guide is for you to refer to the minimum rate which is reasonable for both you and the law firm you are looking to hire.
Don’t expect all law firms to fall in this price range, especially if the firm in question has an exceptional reputation.
Stages Of Conveyancing When Buying Your Property
Conducting Background Research
This is the first stage of any property purchase and must be done before deciding where you want to live.
The main purpose of this is to check the various factors necessary to make any property purchase in Singapore.
The first thing to check on the list is whether or not you are eligible to buy the type of property you want.
According to the Residential Property Act, the natural right to purchase landed residential property in the country is only reserved for Singapore citizens.
However, the rules are different if a foreigner wishes to acquire landed property in Singapore.
In that case, the Controller of Residential Property must give the buyer an approval in order for them to go ahead with the purchase.
On the other hand, non-landed private properties such as condominium units, resale flats, etc., are always on the table without any restrictions for both citizens and foreigners alike.
If you are a Singapore citizen buying an HBD flat, you must keep in mind the ethnic integration policy which limits the number of residents belonging to each ethnic group living in the particular HBD block.
The background research must also include factors such as the property price, the various fees involved, and the property’s floor area.
Lastly, you and your lawyer will have to discuss the several financing options that will allow you to pay for the property.
This includes approaching banks for home loans and deciding whether or not you want to use any of your Central Provident Fund money to pay for the downpayment.
Now, the next thing on the line is conducting a title search to find out crucial information on the property you want to buy.
This is conducted by the conveyancing lawyer you hire, to figure out if there are any issues or factors about the property that you should be aware of.
Property Tenure and Title
Before buying the property, your lawyer should first find out if the property is freehold or leasehold.
The active tenancy agreements of any property can be a deciding factor for most property buyers; therefore, they should be established as quickly as possible.
Some buyers might want a freehold property where the property will indefinitely belong to them and their heirs, while some might want a leasehold property, meaning they will only own it for a fixed term.
If the property has a leasehold tenancy agreement, your lawyer should enquire how many years there is left on the lease.
Any Hidden Encumbrances
Your lawyer should be able to find out if there are any legal encumbrances such as mortgaging or protection by caveats and work accordingly to remove such encumbrances if it is possible.
Type of Ownership Holding
Another important factor is finding out whether the property is held by a single owner or multiple owners.
If it is the latter, then you should be aware if the agreement is that of joint tenancy or tenancy-in-common.
A joint tenancy usually occurs as a result of a marriage, which effectively leaves the property divided into two equal shares.
However, this might not be the case if there was a prenuptial agreement as part of the marital agreement.
On the other hand, tenants-in-common hold divided shares in the property depending on each person’s financial contribution during the purchase.
This means that each owner will own different and separate units of housing accommodation on the same property.
Buying property from tenants-in-common would typically mean that you have to pay each owner a different amount to buy off their share of the property.
A lawyer can also help you in case there was a sale offer made regarding a property whose owner became deceased midway during the selling process.
In such cases, the deceased owner will have usually appointed a beneficial owner, with whom you can continue the purchase agreement.
One important aspect of doing this title search is that you will be able to confirm whether or not the seller has a good root of tile.
A good root of title means that the ownership title is not affected by any defects or issues, such that the property cannot be marketed to anyone.
Once the background search phase of the process is done, it is now time to move on to the next stage.
Contract Signing and Payment
Now it’s time to start the negotiations between your lawyers and the seller’s lawyers for the option to purchase or sale and purchase agreement. (depending on what you use for the sale)
Assuming that you have decided to purchase the property, you may now proceed to sign the option to purchase or the sale & purchase agreement.
Once the signing is done, your lawyer will lodge a caveat on the property with Singapore Land Authority, reserving the right to purchase the property in question.
This basically issues notice to any third parties that you are indeed interested in buying the property and that you and your lawyer should be notified of any dealings regarding the property.
Now you have to pay the downpayment required, which will be collected by your lawyer and placed in a conveyancing account which will be used to pay the seller.
This can either be a Conveyancing account opened by the law firm for the purpose of receiving conveyancing money, an escrow account jointly owned by the lawyers of the buyer and seller, or the conveyancing money service of the Singapore Academy of Law.
Possession Of The Property And Transfer Of Title
The seller will assign a vacant possession to the property when it is ready to be transferred, allowing the buyer to move in.
As the buyer, you should use this time to carefully inspect the property and make sure that there aren’t any defects that can cause an issue later on.
Any such issues discovered should be immediately reported to the seller for him to fix.
Assuming everything is fine by this point, the seller will give you a certificate of title, a transfer form which indicates the ownership change, and the keys to the property.
Do You Need A Lawyer To Buy A House In Singapore?
As we discussed before, the conveyancing process can be complicated and drawn out, involving various research and financial planning.
Not to mention calculating the various stamp duties, property taxes, as well as remissions involved in the process.
For example, a conveyancing lawyer might inform you that there are buyer SC remissions (Buyer Singapore Citizen) available for those buying residential property for investment.
Such knowledge might be otherwise difficult to come by without having an experienced and knowledgeable conveyancing lawyer by your side.
In most cases, we have to admit that hiring a lawyer to buy a house is absolutely necessary.
No matter how confident you are, you will always have more peace of mind knowing that you can relax without running around and handling the various documents, title searches, or requisitions yourself.
You will be much better off leaving those intricate details to your lawyer.
What’s more, even after purchasing the property, there is still the ownership deed, certificate of transfer and various admin works to deal with.
Option-To-Purchase (OTP) And Hiring A Conveyancing Lawyer
Now let’s say that you have found a dashing condominium unit that pleases your eye and you wish to purchase this property.
You will have to obtain a home loan approval (In principal) from your bank, meaning that they have not officially approved the loan, but will likely do so, barring any issues.
Also, you will have to make sure that the seller has accepted your sale offer before you can proceed with the purchase.
Let’s assume that you’ve already gotten these things done and are now ready for the next step.
What you’ll need to do now is dive into a legal and binding contract in written form with the seller.
This is referred to as the Option to Purchase and reserves the exclusive rights to purchase the property at an agreed-upon purchase price.
Next, you will be required to pay 1 % of the purchase price as the option fee to the seller in exchange for the OTP.
Now, the OTP usually has a validity period of 14 days, during which the seller is not allowed to discuss or negotiate the selling of his property to any other potential buyers.
By this point, you should have already hired a conveyancing lawyer beforehand; if not, do so immediately so after the OTP has been received.
Make sure that expenses such as mortgage stamping, law society fee, GST and CPF fees are included in the total fees of the conveyancing lawyer.
Your lawyer will then vet the OPT, which has to be exercised within the 14 days validity period.
Other than that, your conveyancing lawyer can help you plan your finances, such as assisting you in getting your home loan application approved.
Can I Use CPF To Pay The Legal Fee?
You can absolutely use the savings in your CPR ordinary account to pay for the legal conveyancing fees and stamp duties applicable.
If you want to use your CPF to pay for the stamp duty of a property that has already been completed, you should pay the amount in cash and get a reimbursement from your CPF account at a later time.
If it is a property still under construction, you can use your CPF to directly pay for the stamp duty.
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