Housing Developer (HD) Act 1 – Property for sale in Singapore
The Housing Developers (Control and Licensing) Act 1965 (HD Act) is the legislature that governs the sales and purchase of residential properties that are under construction. The Act covers the rights and obligation of developers – property sale Singapore. The main objective of the Act is to protect the interest of the buyer and also to ensure that developers adhere to the requirements of the Act as follows, property for sale in Singapore:
- A Project Account must be set-up. Progress payments are solely for the construction of the project and not for other purposes.
- Delays in completion and issuance of Title are prevented though retention of a portion of the payment.
- Defective and shoddy construction is prevented with the provision of the defects liability period.
- To prevent shortfall in floor area, an error margin of 3% has been set.
Who is a housing developer under the Act?
- A person
- A group of persons, whether in partnership or otherwise
- A society, whether a co-operative or otherwise
- A company which engages in or undertakes housing development
Licence of a housing developer
A developer who develops more than 4 residential units would require a licence from Controller of Housing. Such a developer is called a housing developer. Property for sale in Singapore.
There are 2 types of licence:
1) sale licence
2) no-sale licence
Requirements for a sale licence:
- Can sell before TOP is Issued
- Paid-up capital – minimum $1 million
- Deposit – minimum $1 million for an individual, group of individuals or society
- Proven track record – must have completed a licensed housing or non residential project locally or overseas within the last 5 years for both individual or company (local or overseas)
Requirements for a non-sale licence:
- Can sell only after obtaining TOP
- Paid-up capital – minimum $100,000
- Deposit – None
- Proven track record – None
Project Account
Developers who have applied for a sale licence must set up a Project Account for each project with a bank or finance company before the issuance of the licence – property sale Singapore. Property for sale in Singapore.
The project account is to protect the investor’s money as all progress payments received before TOP and any construction loan are kept in the account for the purpose of the development project and not be used for other purposes.
Withdraw of profit or surplus money is possible only after TOPhasbeen issued or if payment is approved expenses. The account cannot be used for land cost or development charge payments. Property for sale in Singapore.
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