The Conveyancing Process in Singapore
Conveyancing refers to the legal process of transferring title in a property from one person to another. For most people, the purchase of a property is likely to be the most expensive purchase they will make in their entire life, and it is therefore important to get it right. This article provides a broad overview of the conveyancing process in Singapore so you will know what to expect when deciding to take that step of purchasing a property.
Before purchasing a property, you first have to do your research. Apart from deciding where you wish to live, other things you should look into include the following:
- Eligibility: Under the Residential Property Act, only Singaporeans are allowed to purchase landed residential property. Foreigners who wish to do so will first have to obtain approval from the Controller of Residential Property. Otherwise, they may still purchase condominium units. In addition, if you are purchasing an HDB flat, bear in mind the ethnic integration policy which limits the number of families of each ethnic group living in HDB blocks;
- Land / floor area: how large the land or floor area of the property is;
- Price: price of the property. Other fees in the conveyancing process include property taxes and stamp duties;
- Financing options: i.e. how you will pay for the property. In this respect, you may have to approach a bank for a mortgage. You may also use funds from your Central Provident Fund account to offset some of the amount;
Apart from these, your lawyer will also conduct a title search to find out more information about the property, such as:
- Property title and tenure: whether the property is freehold (i.e. the property will indefinitely belong to you and your heirs) or leasehold (i.e. the property will belong to you for a fixed term, which may or may not be extendable. You will also need to inquire on the total length of the lease and how many years remain on it);
- Encumbrances, if any: e.g. whether the property is protected by caveats or has been mortgaged. If any encumbrances are found, additional steps will have to be taken to remove such encumbrances from the land (if this is even possible);
- Name of registered proprietor(s): the names of the owners of the property; and
- Manner of ownership holding: i.e. if there are multiple owners of the same property, whether they own the property as joint tenants or tenants-in-common. Joint tenants have equal interests in the flat regardless of their amount of contribution to the purchase of the property, while tenants-in-common own the property in divided shares, the proportion of the split depending on the owners’ contributions to the purchase of the property.
Through the title search, your lawyer will attempt to confirm that the seller has “good root of title”, i.e. his title to the property is not defective to the extent that the property cannot be marketed. If the seller does not have good root of title, it is inadvisable to proceed further until the defects in the seller’s title are remedied (if this is possible).
Signing the Contract(s) and Making Payment
Once you have found a piece of property you are interested in, negotiations between your lawyers and those of the seller for the option to purchase or sale and purchase agreement will begin (depending on which document is being used for the sale).
If you decide to purchase the property, you may then sign the option to purchase or the sale and purchase agreement, depending on which document is being used to conclude the sale.
After that, your lawyer will lodge a caveat on the property with the Singapore Land Authority. The caveat serves to provide notice to third-parties of your interest in the property and also enables both you and your lawyer to be notified of any subsequent dealings affecting the property.
The rest of the down-payment for the property (a percentage of the purchase price minus the amount paid as the booking fee) will also be due. The conveyancing money used to make payment will be collected from you by your lawyer and placed in a conveyancing account to be paid out from there to the seller. This account can be:
- A conveyancing account specially opened by the lawyer’s law firm to receive such monies;
- The Singapore Academy of Law’s Conveyancing Money Service; or
- An escrow account jointly owned by the buyer and seller’s lawyers.
Taking Possession and Transfer of Title
When the property is ready to be transferred, the seller will give vacant possession of it (i.e. in a state fit for occupation) to the buyer. The buyer should then carefully inspect the property to ensure that it is free from defects. If any are discovered, they should be reported to the seller for rectification.
When everything is in order, the buyer will receive a certificate of title, a transfer form (indicating the transfer in property ownership), as well as the keys to the property from the seller. This completes the entire transaction.
Property purchases can be a complex given the many steps involved in the process. The exact procedure also varies depending on whether the property in question is a landed property, HDB flat or condominium. In this regard, you are strongly advised to engage a lawyer who will be able to provide advice on how to proceed, to assist with the necessary checks, as well as ensure that your interests are protected.
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