Sale & Purchase Agreement Details That Condo Buyers In Singapore Need To Know About

Before you decide to make a property purchase from a private seller or property developer, you will go through a string of negotiations and agreements with the concerned party. 

The Sales & Purchase agreement writes down all the details of those negotiations and agreements so that neither you nor the seller can change the terms later on in the deal. 

There are usually five key terms present in every sale and purchase agreement which has to do with when the property will be available, the details of the property, the kind of payment plan involved, the type of tenancy, and finally, what will happen if you fail to pay. 

Let us take a look at each one of these terms in detail. 

Date Of Vacant Possession

This is the date by the end of which the developer or seller must provide the keys to you, the buyer. 

The property in question can be a private condominium, new launch condo, executive Condominium, or a resale flat.

If it’s a resale flat, then the seller must hand over the keys to you by the mentioned possession date. 

In the case of new launch condos, the property developer must complete the construction of the condominium unit and hand over the keys before the mentioned possession date. 

Failure to do so, in any case, will result in some form of compensation handed to you. 

For example, if your new launch condo is not ready by the mentioned date of possession, the developer is liable to pay you a late completion interest in the form of liquidated damages. 

This is usually a 10 % interest rate per annum on the total amount of instalments paid by you. 

Assuming that there are no major difficulties, most new launch purchasers will likely pick up their keys well before this day.

Do note that once you have picked up your keys, you will be responsible for paying the property tax, maintenance fees and title survey costs. 

Your attorneys will be responsible for keeping a record of how much is owed to whom at this point. 

Unit Specifications

Each and every detail of the condominium unit will be jotted down in the sales and purchase agreement. 

This usually includes details such as any appliances and furnishings that come with the unit, the material type, fittings and finishes, details of the electrical wiring used etc. 

There will also be written details about the type of common facilities in the unit, such as whether or not the unit comes with an a.c or geysers in the bathrooms. 

You should never leave anything to a verbal agreement; so, for example, if the developer or seller offers you free items such as a washing machine, make sure you get that written down in the agreement. 

Suppose the verbal agreement is made after the sales and purchase agreement is drafted. 

In that case, you can make revisions for that particular addition or get a written confirmation from the other party. 

The unit’s specifications also include details such as the unit’s floor area; however, note that these details are usually not accurate to the bone. 

If that is the case, the developer is not liable to pay you compensation for that, provided there is only a tiny difference. 

For example, the developer would not have to compensate you if the actual floor area of the unit is 3 % less than what’s mentioned in the documents, but he will have to compensate you if there is a size difference of more than 3 %. 

Progressive Payment Schedule 

Whatever you do, make sure you stick to the agreed-upon payment schedule and make your payments promptly on time. 

Failure to do so will risk you having to pay more interest than what has been determined by the terms of the agreement. 

Once the title deeds and execution copies of the agreement have been delivered to you or your attorney, you will have a three-week option period to pay the option fee and exercise the option to purchase. 

This option to purchase is valid for 21 days, within which you are obligated to pay 20 % of the purchase price, minus the 5 % booking fee. 

If you fail to make these payments within the 21 days time frame, the seller has the right to annul the sales and purchase agreement. 

Once the agreement has been annulled, the buyer will forfeit 25 % of the booking fee, which can be anywhere between 1.25 % to 2 .5 % of the original purchase price. 

What’s more, the selling party can then choose to resell the unit to another party, so be sure to avoid late payments like the plague. 

Type Of Tenancy

Whether you have a 99-year lease, or a 999-year lease, always remember that the lease does not begin when you purchase the unit and move into it. 

It is important to know that the tenure actually began when the land on which the unit is standing was granted to the developer. 

Buyers of new launch condos must remember that there might have been at least a year or two that has passed in the lease while signing the sales and purchase agreement. 

Defects Liability Period

The developer has to give you unoccupied possession before the commencement of the defects liability period of 12 months. 

Alternatively, it will start on the 15th day after you receive the papers listed under item 3 of the payment schedule, whatever comes first. 

Note that it is the developer’s responsibility to fix any flaws that are discovered inside the unit within these 12 months. 

If you happen to find any issues with the unit, it is your duty to notify the developer as soon as possible. 

If the developer fails to fix the issue within a month of your notification, you can request a price quote from a contractor of your choosing.

Once you have done this, you can send a written notification to the developer that you’ll be carrying out the repair work with the contractor that you have hired at their given price. 

In practice, the sales and purchase agreement for a new launch condo consists of many clauses and terms, out of which 15 are vital for both the buyer and the seller. 

Clause 2: Agreement For Sale And Purchase

This clause details the property’s tenancy and determines whether it is freehold or leasehold.

When a leasehold duration is specified (usually for 99 or 999 years), the buyer should take note of the date the lease began in order to determine how many years are still left on the lease.

Clause 5: Payment Schedule 

This clause lays out the payment schedule that you are supposed to stick to while your new launch condo is being constructed. 

First of all, you do have to pay the 20 % deposit fee at the start of the transaction.

Other than that, all payments are to be made in instalments whenever a certain level of construction has been completed. 

Once the developer has finished building a significant part, say, the windows and doors, he will send you a notification of the completion.

You are then supposed to pay the mentioned amount within 14 days of receiving this notification. 

In the event of any late payments, you will be charged a late payment interest. 

Clause 7: Repudiation By Purchaser

As a buyer, you should never fail to make any instalment payments or late payment interests 14 days past the due date. 

If the due date has passed and you still haven’t paid within 14 days, you will likely lose ownership of the property. 

If in case you fail to make any instalments or late payment interests for more than 14 days past the due date, the developer is obligated to retake possession of the property and consider the deal as repudiated. 

He will then forfeit 20 % of the purchase price and compel you to pay any amounts due to him. 

After this, he has the right to resell the concerned unit in the property market. 

Clause 11: Title Surveys

It is the responsibility of the developer to conduct title surveys and prepare plans for the property. 

The survey and planning fees will be paid equally by both you and the developer. 

Clause 12: Delivery Of Possession

The developer must provide the buyer with vacant possession of the property no later than the date specified in this clause. 

Failure to do so will result in the seller paying you for liquidated damages computed daily at a rate of 10 % annual interest rate on the total instalment amounts paid by you. 

Clause 13: Maintenance Charges

As the buyer, you are responsible for paying your share of the maintenance charges either after you have been given the vacant possession of the property or on the 15th from the date when you actually received a notification to take possession of the property, whatever is earlier. 

Note that you must pay the maintenance costs for the first six months in one lump payment within 14 days of having received the notification, so get ready to dig deep into your bank account. 

On the other hand, the payments for the subsequent maintenance costs are more relaxed and on a quarterly basis. 

Clause 15: Certificate of Statutory Completion (CSC)

You should get the written permission of the developer if you want to make any adjustments or additions to the property unless the CSC has been issued. 

On the other hand, if any additions or alterations go on to hamper the issuing of the CSC, the developer may take it upon himself to enter the property and conduct the necessary changes as required by the relevant authority.

Additionally, you will have to pay the developer for the expenses during this adjustment process. 

It is important to know that the developer has the complete right to make these adjustments to the property if dictated by the relevant authority unless the CSC has been issued. 

Clause 16: Completion

It is the developer’s responsibility to complete the construction of the property before the date mentioned in this clause. 

Moreover, he should send you the notice to pay the remaining balance amount and hand over the title deed before this date. 

If the developer fails to do this, he is obligated to pay you liquidated damages at the rate of 10 % interest per annum on the total sum you have paid till now. 

Clause 17: Defects Liability Period

The developer is responsible for fixing any issues that have been detected in the property within 12 months of the start of the vacant possession, or the 15th day when you receive the notice for possession, whatever comes first. 

If you do come across any defects in the property, you should make detailed writing of it and send it to the developer.

If the developer doesn’t fix the issue within a month, you can get a quotation from a contractor, send it to the developer, and request him to fix it within 14 days. 

If he still fails to fix the issue within 14 days, you may hire a contractor and get it fixed yourself and later bill the fees to the developer. 

Clause 18: Errors, Omissions And Misdescription

Once the property is complete, there will be a title survey which will determine the exact floor area of the property and compare it with what was promised in the agreement. 

If the actual floor area is smaller than what was mentioned, by more than 3 %, you are entitled to receive an adjustment in the purchase price. 

Clause 19: Taxes

You are responsible for paying the property tax and other property-related expenditures once you have received the notice to take possession of the concerned property.

A typical sale and purchase agreement contains vital information such as the seller and buyer’s identifications, detailed information regarding the item being bought or sold, the terms and schedule of the payment which has been agreed upon by both parties, and the date of when the item should be delivered. 

Additionally, your hired attorney can help you add clauses and other details that safeguard your interests in this transaction, such as:

• Written details of the obligations of the buyer and seller. 
• What will happen in case one party fails to fulfil the terms of the agreement. 
• How will the dispute be solved in the occurrence of such a scenario?
• Which party will bear the legal fees and costs in the event of a legal dispute between the buyer and seller? 

Using a template agreement is not recommended as it can lead to issues in the transaction later on. 

As stated earlier, the sale and purchase agreement contains all the details and obligations of both parties during the sale or purchase of residential units and various non-residential properties. 

Each transaction will be subject to different scenarios and will require a different set of agreements to be made. 

Considering this fact, using a template agreement for all sale and purchase transactions could spell disaster for both parties. 

Moreover, if you are selling your property, the Housing and Development Board

requires you to use the option to purchase and the sale and purchase agreement recommended by them. 

However, if you want to make adjustments to the recommended form, you have the option to do so by submitting an application to the controller.

Whether you are buying a property for investment or residential purposes, you must always rely on a written document to enforce any deal. 

In real estate, no party will rely on the particulars made during a verbal agreement, as they are not enforceable under law. 

In order to understand this, let us take a look at the standard terms and conditions for the sale of any property. 

A standard agreement will contain details of the buyer and seller and the conditions for the sale or purchase of the items agreed upon, all of which will be noted in writing.

This document holds all the particulars of the deal, which are written down in vivid detail.

According to the agreements, the term “Buyer” refers to the person who accepts the Seller’s quote for the sale of the Goods or whose order for the Goods is accepted by the Seller. 

The term “Conditions” refers to the terms and conditions set out between the buyer and seller.

The term “Contract” refers to the document between the Buyer and the Seller for the purchase and sale of the Goods. 

The term “Items” refers to the goods (including any instalment of the goods or any components for them) or services that the Seller is required to provide under the Contract.

The term “Seller.” refers to the person or party which is offering the goods or services in exchange for monetary gains.

And the most important part, the term ”Writing”, proves that any such agreement made between the parties will only be enforced if such details are jotted down in formal writing and not made verbally. 

Once anything has been written down, it cannot be changed later on during the deal. 

So, for example, if a seller has quoted a certain price and written it down in the sale offer, he cannot change it once a buyer has accepted the offer.

So we can definitely say that no purchase or sale transactions regarding residential and non-residential properties can be done without a written agreement. 

Without written documentation, there is no proof that the agreement was made in the first place. 

This can stretch not only to whether the agreement was made or not but also regarding the details of the property. 

For example, say you have decided to go ahead with the purchase of property located in Clementi.

Since you personally know the owner, you felt that it was ok to make a verbal agreement with him. 

But after paying the booking fee and making the downpayment, he tries to convince you to buy his executive condo located on Cecil street, or worse, a shop with living quarters located in Golden mile, something you have zero interest in. 

Naturally, you will disagree with him and ask for him to return the downpayment and booking fee. 

But he goes on to refuse to pay you back and insists that you make do with the alternative properties that he has offered. 

Now, you can obviously hire a law firm and file a police complaint to deal with this, but since there is no written documentation of the agreement made, the case will be flimsy at best. 

The seller can falsely make the case that the payment you gave him was a gift or that you simply didn’t make the payment at all in the first place. 

So, whether it be business deals or deals made in the residential property market, always avoid making verbal agreements, and have any agreed-upon details written down in the sale and purchase agreement document.

Without question, you should definitely engage a decent lawyer from a reputable law firm to help you out with the sale and purchase agreement and subsequent transactions. 

In fact, most people tend to hire a lawyer right after they have hired a good property agent to scout their property purchase. 

Buying a property is a long and gruelling process requiring lots of calculations and considerations. 

After finding the property you want, you must go through the long and difficult process of securing a mortgage loan to pay for your house.

You don’t want to rush into the first loan available, nor should you simply go for the cheapest bank loan you can find. 

You should consider some of the important aspects of the loan, such as loan tenure/loan period and the maximum loan amount that you can borrow. 

These will require you to calculate factors such as your income ceiling, check whether you have any housing grants that can help with the finances etc. 

Moreover, you have to check out different banks and loan packages and compare the loan rates provided by each of them. 

Then, you have to make considerations for stamp duty expenses and calculate ABSD rates if they apply in your case. 

As we know, Singapore citizens have to pay ABSD on the second, third and subsequent property purchases, while Singapore Permanent Residents pay ABSD on all purchases; so make sure to conduct the count of properties accurately. 

On top of that, you also have to take into account any outstanding loan that you might have, which can affect the bank loan you want.

Once you have everything calculated, you will need to provide some important information such as proof of income, your marital status, etc.  

After you have acquired the loan, your lawyer can help you with the rest of the transactions, such as collecting payments from you and handing it over to the developer, drawing up the conveyancing papers once you receive the ownership title, etc. 

Alternatively, your lawyer can also help you in other conveyancing matters in case you want to transfer the property into living trusts etc.

Essential Things To Know

1. Type Of Property 

The first and foremost thing that any buyer should know is the type of property which he is purchasing. 

Properties can be residential, industrial, or commercial, each coming with its own expenses and regulations. 

Understanding the difference between these property types is of the utmost importance as it can deeply affect factors such as loan-to-value ratio, amount of property taxes you have to pay, amount of utility bills, valuation of the land etc. 

Nowadays, there are so many mixed development properties that the actual property type can become quite confusing for prospective buyers. 

For example, a shop with living quarters can be considered both residential and commercial property and will likely fall under the mixed-use development category. 

Note that anyone in the business of housing development may qualify for certain remissions for BSD when it comes to buying properties with certain unique characteristics attached to them. 

For example, BSD remissions are available in the case of residential land acquisitions if done so for 100 % non-residential development, without any use restrictions. 

In order to receive this remission, a buyer must acquire residential land that is free of any restrictions and use it for 100 % non-residential development. 

Such projects are seen to be aligned with the objective of National development and might receive remission regarding stamp duty purposes from the Inland Revenue Authority of Singapore. 

Also, note that you will have to get the permission of the Singapore Land Authority if you are a foreigner who wants to buy landed properties such as semi-detached houses or terrace houses. 

2. Land Title And Tenure

During property developments, the government hands over a master title to the landowners and property developers.

Strata titles are usually reserved for property owners of high-rise buildings and are given when many individual properties band together to form a larger shared development collectively.

Finally, individual titles are given when there is a single sole owner who is responsible for the land on which the property is built. 

3. Vacant Possession

The vacant possession typically refers to the seller’s duty and responsibility in making sure that the subject property is suitable for the occupation of the buyer. 

The period of time given to the seller to make the property ready for occupation depends on whether the property is landed or high-rise. 

In the case of landed properties, the buyer can expect the keys and vacant possession to be handed over to them within 24 months of signing the SPA.

In the case of high-rise properties, the vacant possession and keys will be handed over within 36-48 months after signing the SPA. 

Note that receiving the keys and vacant possession does not make you the official homeowner under the eyes of the law. 

You will have to wait until your receive the property title before you can call yourself the official homeowner. 

4. Liquidated Damages

Suppose you have purchased property A which is still under construction, and have already paid the amount required of you. 

However, for some reason, the developer still has not completed the construction of the property despite having passed the completion and handover dates mentioned in the sales and purchase agreement. 

In that case, the developer will be liable to pay liquidated damages to you, the particulars of which will be mentioned in the SPA.

5. Defect Liability Period

This can be seen as the warranty period for any newly developed properties during which you can report any issues or damages present in the property. 

This warranty period of time usually lasts around 6 to 12 months and is the only time when you can lodge an official notice regarding any damages that need to be repaired. 

Any damages reported by you within this period of time must be repaired and paid for by the developer.

Yes, the buyer can indeed back out despite signing the agreement; however, he will have to forfeit the option fee which he had paid earlier. 

On the other hand, if the seller backs out from the sale agreement, he will have to return the option fee to the buyer. 

However, there may be cases where a buyer has a claim against the buyer, which makes him obligated to go ahead with the transaction. 

This is termed specific performance, and the activation of this is usually decided by the court after they have looked into the conduct of both parties, so ultimately, the decision to execute this prerogative lies with the court.

A purchase agreement for a home is a legally binding document signed between the buyer (you) and the seller. 

This document mentions all the terms and conditions to be considered during the transaction and is used as a reference when carrying out the necessary duties in each step. 

It is typically used so that both parties adhere to the agreed-upon terms and conditions of the document, thereby essentially protecting the rights and interests of both parties during the transaction. 

Similarly, sales contracts refer to the legal documents that contain the terms and conditions regarding the sale of any real estate property. 

Both of these share a similar function and are basic requirements under the rules and regulations of the Housing Developers body in Singapore.

Purchase And Sale Of Purchased Assets

Any purchase transaction relies upon a detailed sale and purchase agreement which is signed by both the buyer and seller involved in the transaction. 

Upon the declaration of the agreement, the selling party is legally bound to transfer the concerned item or asset mentioned in the agreement to the purchaser once payment has been made and the due date for such transfer has arrived.

Alternatively, the purchases can also mention in writing if he/she wishes the item to be transferred to one of his/her associates. 

If that is the case, the name and details of the mentioned associate should be included in the sale and purchase agreement.

Alternatively, the purchasing paying for the item might also wish the associate to conduct the purchase transaction in his/her name.

Legal consequences will take precedence if any of the parties break the terms and conditions of the agreement, causing an issue in the transaction.

Any items mentioned in the agreement bound for transfer shall come free from any outstanding burdens such as debts and shall be free from any possessions held by any previous owner.

It is the responsibility of the seller to ensure that the item is made available for transfer on the mentioned date; in other words, there should not be any delay on their part.

Assumption By Purchaser Of Certain Liabilities

According to the terms and conditions legally set in the agreement, the purchases is liable to pay for the item he/she has purchased.

The purchaser is only responsible for paying the item’s price and is not obligated to take on any previous expenses and liabilities that might come with the item. 

Transfer Of Purchased Assets

Once the due date for the transfer of the item from the seller to the purchaser arrives, it is the responsibility of the seller to item available for the purchaser.

In terms of real estate, this would refer to the transfer of the property keys to the purchaser. 

Moreover, if any miscellaneous items and appliances are supposed to be included along with the property, the seller has the responsibility of transferring those items into the property upon the arrival of the due date. 

As the buyer wanting to buy a new launch condo still under construction, you have to make an initial payment of 5 % of the total property price to the developer.

This is called the booking fee, after which you will receive a copy of the option to purchase.

This option to purchase is crucial for the sales and purchase agreement and should be kept safe at all times as it serves as one of the proof documentation that you have made the initial booking fee payment. 

The developer will only issue the sale and purchase agreement after you have made this initial booking fee payment, typically within the next 14 days.

Once you have received the sale and purchase agreement, you only have a window of three weeks until the option to purchase expires.

You must now exercise the option to purchase within this timeframe by signing it and returning the copies of the sale and purchase agreement to the developer. 

If you fail to do so within the time limit, the developer is entitled to consider the deal nullified, pocketing 25 % of the booking fee while returning 75 %.

Moreover, you have to make all stamp duty payments within 14 days of signing the SPA and additionally pay another 20 % of the property price to the developer within the next eight weeks. 

Stamp duties are much higher in Singapore compared to countries such as the United States of America. 

The reason is that the Singapore government employs stamp duties as cooling measures to keep property prices in tandem with economic fundamentals.

Note that duty payments can be made to IRAS through any of their online e-Stamping Portal available to you. 

The remaining 80 % of the property price should be paid progressively once certain construction milestones have been reached over time. 

The process is mostly the same in the case of resale condos, with some differences in the amounts paid. 

Moreover, resale condos will require you to pay the entire property price, minus what you have already paid for in the booking fee and deposit, within eight weeks from the date of exercising the option to purchase. 

When going through a sale and purchase agreement, make sure that the particulars match the details given above. 

Be aware of the timeframes, percentage of property price being paid at every stage, cost of booking fees and option fees and so on.

As a buyer purchasing property in Singapore, you do have the right to cancel the sale and purchase agreement if you don’t want to go ahead with the transaction.

As per the rules and regulations, you are allowed to cancel the agreement within 5 days of having signed the agreement. 

In the case of real estate, the buyer will have to forfeit the option fee to the seller if he/she decides to back out of the deal after signing the OTP.