States operate primarily through rules and regulations in place for its citizens to adhere to. While they may seem unnecessarily pervasive and strict, an extensive network of rules provides citizens with a safe and stable environment to work and live in. Property ownership is usually heavily regulated. Singapore, famous for having laws against chewing gum, has strict legal channels for potential homeowners to access to enable property purchase. Here, we look at the legal steps one must complete before they are legally cleared to buy a condominium in Singapore.
Legal channels for condominium rental or ownership
There are some legal channels that you need to go through before buying a condominium. You should familiarise yourself with these regulations, to help you avoid wasting time and resources. Some of the legal issues to look out for include:
The Residential Property Act of Singapore allows Singaporeans to buy condominiums as long as they can afford them. Foreigners are also allowed to buy condominium units but they are unable to purchase other types of property without having prior approval from the Controller of Residential Property.
Finance and payment plans
This is important because you might not have the cash to pay for a condominium unit upfront. In this instance, you will have to get a mortgage from a bank.
You need to know what kind of ownership you will be entitled to. There are two kinds of ownership. These are freehold and leasehold. The freehold tenure means that you own the condominium for 99 years. In the event of your death, the condominium will belong to your heirs. Leasehold only allows you to own the property for a designated period of time. When this time is up, it may not be extended. Essentially, you only have an autonomous hold over your property for a short period of time.
You need to know who owns the condominium before you make a payment and you are dealing with the correct person, legally speaking. This will make sure that you are not a victim of fraud. In rare cases, an unauthorised person might try to sell you a condominium that does not lawfully belong to them.
You need to make sure that the seller of the condominium has what is known as a ‘good root title.’ This means that the property owner has full rights to the property and can sell it without any problems.
Once you or your lawyer is fully satisfied with the condition of the property and the title deed, you need to draw up an agreement of sale contract. The contract should include the name of the seller, buyer, price, terms of payments and how the property will be sold. You can only sign the contract when you have read and understood it entirely.
In this period, you are supposed to pay a booking fee which is usually between 5 to 10% of the overall cost of the property. Legally, you will have reserved the property and the seller will not be entitled to sell it to anyone except you.
Play your part
When you have reserved your desired property, take a unit at Marina One residences as an example, it becomes your duty to keep your end of the agreement by adhering to the payment schedule. If you decide that you don’t want the property, you will only be refunded a portion of your booking fee and the seller will be legally allowed to sell the condominium to other prospective buyers.