Are HDB and conservation shophouses considered as restricted residential properties?

After my CPF funds have been refunded to CPF Board, can I re-use these funds?

You should always consult your Lawyer first as he or she will advise you on the terms of the draft Option to Purchase or Sale & Purchase Agreement. Your Lawyer will conduct the requisite title searches on the property and/or solvency searches (such as bankruptcy) on the seller (in the case of a purchase). It is always advisable to leave the negotiation of the terms of the Option or Agreement to your Lawyer.

The frequent practice of buyers concluding their purchases at "licensed" developers' residential property launches is relatively "safe" as the Options to Purchase are prescribed by the Housing Developers' Rules (or if there are amendments, will be subject to the prior written approval of the Controller of Housing). The Rules contain the standard conditions of sale which constitute a fair bargain as deemed by the Government, and provide sufficient protection for the purchasers.

Nevertheless, there are still risks such as the title of the property may be defective or the developers may not be financially sound. You should consider, amongst others, the reputation of the developers (although not foolproof), the type of project (if you are a Singapore Permanent Resident or a foreigner) and the tenure of the property (freehold, statutory land grant or leasehold). If you are in doubt, request your Lawyer to conduct the following searches:-

(1) title search on the property
(2) bankruptcy or winding up/judicial management search(es) on the Seller/Developer

What are the ways of entering into a sale and purchase of a Property?

The most common methods of entering into a property transaction is by way of an Option to Purchase and Sale & Purchase Agreement.

An Option is usually granted by the seller to the buyer to purchase his property in consideration for an Option Fee (usually 1% of the sale price). During the Option period, usually 2 to 3 weeks, the buyer will consider whether he wishes to enter into a contract to purchase the property by "exercising" the Option.

If you are a buyer, you should consult a Lawyer during this interim period (from the grant of the Option to the exercise of the same) as the Lawyer will usually conduct searches and advise you on the steps to take relating to the purchase. If the buyer fails to exercise the Option in accordance with its terms, the seller will usually have the right to forfeit the Option Fee. Until the buyer exercise the Option, there is no contract between the buyer and seller.

An Sale & Purchase Agreement is a contract entered into directly between the seller and buyer, usually with a deposit of 10% of the sale price, and both parties have to comply strictly with the terms and conditions of the Agreement.

Other ways of entering into a property transaction include tender and auction.

Is there a "standard" Option to Purchase or Sale & Purchase Agreement?

There is no "standard" Option or Agreement, except for purchase of properties direct from licensed developers using Option prescribed by law and/or approved by the Controller of Housing. The terms and conditions of an Option or Agreement is usually negotiated between the parties and mutually agreed.

Nevertheless, there are certain "norms" in property transactions which are relied on by Lawyers and Property Agents, but these are still subject to mutual agreement. Some of them include the following:-

(1) stakeholders' clause of balance 9% of the deposit to be held by Lawyers acting for seller
(2) 1% Option Fee
(3) 2 weeks' exercise period
(4) 8 to 10 weeks from the date of exercise of Option for completion of sale and purchase.

The legal fees on conveyancing matters charged by Lawyers used to be prescribed by law under the Solicitors' Remuneration (Amendment) Order 1994}. It was based on a fixed sliding "scale" which must be strictly complied with by Singapore lawyers.

With effect from 1st February 2003, legal fees on conveyancing is now negotiable, i.e. mutually agreed between the Law Firm and the client.

Prior to 1st February 2003, Lawyers are not permitted to give discounts on legal fees for conveyancing matters save and except for statutory discounts as prescribed by law and other limited exceptions.

However, with the liberalisation of legal fees, i.e. not subjected to a "scale" and being negotiable, this may no longer be applicable. Notwithstanding such liberalisation, lawyers still have to act with professionalism by not offering fees to unfairly attract business to the firm or tout for business.

What are the properties a foreign person can acquire without having to apply for approval under the Act?

It means all residential landed properties, including vacant land, detached houses, semi-detached houses, terrace houses; and any land or building zoned or gazetted for residential purposes, such as flat comprised in a building of less than 6-storey.

What are "joint tenants" and "tenants in common" (Co-ownership of property)?

A property held by 2 or more persons as joint tenants means that upon the death of one joint owner, his interest in the property is taken over by the surviving owner(s). A joint owner may not will away his interest in the property to others in his Will.

Property held by 2 or more persons as tenants in common means that each owner has a specified or distinct share or proportion in the property. For example, such share could be on an equal basis (50%-50%) or 70% - 30% basis etc. Each owner may be able to dispose his share in the property either by sale or under his Will. Upon one owner's death, the surviving co-owner(s) do(es) not take over the deceased's interest in the property as is in the case of joint tenancy. His share passes under his will or in accordance with the law of intestacy, as the case may be.

I currently own a Housing Development Board (HDB) flat and I wish to purchase a private property in Singapore for my own occupation or investment. Can I do that?

You should always check with HDB on your eligibility to buy a private property if you own a HDB flat. You should also obtain HDB's prior written consent before you enter into any option or agreement to purchase any private property, failing which, very serious consequences may follow including the compulsory acquisition of your HDB flat by HDB.

I will be away from Singapore for an indefinite period, can I authorize a relative or friend to buy, sell or manage my property in Singapore?

You should engage a Lawyer to draft and prepare a Power of Attorney to grant your attorney such powers in accordance with your wishes to act on your behalf in respect of your real estate transactions.

Are HDB and conservation shophouses considered as restricted residential properties?

Applications to buy vacant land will not be favourably considered. Applicants are advised to buy built-up property or a property under construction.

You have to pay legal fees based on a scale dependent on the market value of the property at the date of gift. 

You have to engage a valuation of the property by a licensed valuer, and on receipt of such valuation report, your Lawyer will write to the Commissioner of Stamp Duties for adjudication of stamp fees payable on the Deed together with a $25.00 adjudication fee.

You must not be an undischarged bankrupt, and is allowed to withdraw your CPF funds for the following purposes:-

(a) To make direct payment to a property developer or a vendor for the purchase of a residential property;  

(b) To repay a housing loan taken for the purchase of the property;

(c) To repay a housing loan taken for the purchase of land and for construction of a house on that land.

In addition to (a), (b) and (c) above, a member may use his CPF savings to pay the legal costs, stamp and survey fees incurred in connection with the purchase/construction of the property.

A member is allowed to use up to 100% of his CPF savings in the Ordinary Account and 100% of the monthly CPF contributions that are paid into his Ordinary Account for payment towards the purchase price of his residential property and to service his housing loan up to the 100% Valuation Limit. This is the value of the property as assessed by the Board at the time of purchase or the purchase price, whichever is the lower. 

A charge will be lodged by the Board against the property to secure the return of CPF savings withdrawn plus accrued interest.

After I sold my property, what happened to my CPF funds withdrawn under the scheme?

When the property is sold or transferred, the member is required to return to his CPF Account the CPF savings withdrawn plus accrued interest, if he has not yet qualified for withdrawal of CPF savings under Section 15 of the CPF Act.

A time bar of 1 year ownership on the property is imposed for the re-use of CPF savings that have been refunded when the property is sold, that is, the CPF savings can be re-used immediately if the member has owned the property for more than 1 year.

I am buying a property with some other person(s), can I still use my CPF funds under this scheme?

Members of the immediate family e.g. spouses, parents, children and siblings are allowed to jointly purchase a property using their combined CPF savings. Co-owners of the property who are not using CPF savings should also be members of the immediate family.

Members are required to furnish the Board with certified true copies of the documentary evidence (certified by members’ lawyers) to show the relationship among the co-purchasers (for example, marriage certificate, birth certificates, etc.) at the time of submission of application.

Are there any other conditions before I can use my CPF funds?

(a) The amounts approved for withdrawal can only be released when all the necessary documents have been executed and the difference between the purchase price and the aggregate of the loan (if any) and CPF lumpsum approved for payment of the purchase price has been paid with the member’s own funds.

(b) A member may use his CPF savings to purchase more than one property at any time

(c) Members who are owners of HDB flats (including HUDC Phase 3 & 4 flats) are required to obtain approval from HDB, where applicable, regarding the purchase of their private residential properties.

(d) The Board reserves the right to value the property before releasing CPF savings. The valuation fees shall be paid by the member.

(e) If the member or the co-purchaser is a non-Singapore Citizen or Permanent Resident, he is required to obtain approval from the Land Dealings (Approval) Unit for the purchase of the property, where applicable.

(f) The deposit payable before and at the time of signing the Option To Purchase/Sale and Purchase Agreement has to be paid by the member with his own funds. If a bridging loan is taken for the payment, he may use his CPF savings subsequently to repay the bridging loan, subject to the mortgagee’s consent.  

(g) For properties which are under construction, CPF savings will be paid progressively to meet the progress instalments to the developers.

(h) For properties which are constructed by unlicensed developers, CPF savings can only be released when the properties are completed up to the roofing stage.  

(i) The consent of the Board must be obtained before the property can be sold, transferred or mortgaged.  

(j) The property shall not be used for any immoral, illegal or unauthorised purposes.

(a) A member is not allowed to use his CPF savings to pay directly for the land cost and the construction costs of the house. He would have to use his own funds and/or a loan to meet the said payments first. When the house has been completed up to the Temporary Occupation Permit stage, the member can use his CPF savings to repay the loan. Reimbursement of the land and construction costs paid by him with his own funds can only be allowed if the house is constructed on or after 1 October 1993 and the construction of the house has commenced within six (6) months from completion date of purchase of the land. If the construction of the house has commenced more than six (6) months after the completion date of purchase of the land, he can only use his CPF savings to reimburse himself for the construction costs.

(b) Requests for reimbursement of CPF savings have to be made within six months after the issue of the Temporary Occupation Permit. The reimbursement will be in the form of a one-time payment. Monthly withdrawals are not allowed. Requests for further reimbursement from the members’ future CPF savings are also not allowed.

(c) The total amount of CPF savings that can be withdrawn is subject to the value of the completed property.

You can apply by submitting the duly completed application forms which are obtainable from the Board. As in many cases, you may be obtaining a housing loan and other credit facilities to part-finance the purchase price of the property, and you should consult your Lawyer for his assistance in completing the application form. It usually takes about 2 to 3 weeks for the Board to grant its in-principle written approval.

What is the relationship and effect between CPF Board's Charge and the Mortgagee's (financial institution) Mortgage over the property?

A relationship arises between the Board and the Mortgagee only when there are a Charge and a Mortgage over the property respectively. You remains as owner of the property. CPF Board is the first chargee of the property, i.e. it has the first priority over the property to the full extent of your CPF savings (plus accrued interest) released by the Board under the scheme. The rights of the Mortgagee (financial institution) who has advanced a loan to part-finance the purchase price of the property, is secured by a mortgage of the property which ranks lower in priority than the Board.

In the event the property is sold under Mortgagee's sale or acquired by the State, the sale or compensation proceeds are insufficient to cover both the CPF savings (plus accrued interest) released by the Board and the mortgage loan (plus accrued interest) granted by the Mortgagee, the proceeds are distributed according to the following rules of priority:-

(1) The Board, having the first priority, is entitled to the extent of the sums withdrawn by the member to purchase the property.

(2) The Mortgagee then recovers the loan amount.

(3) The Board then takes the amount representing the accrued interest calculated according to the amount withdrawn.

(4) The Mortgagee then recovers the interest owed under the mortgage loan.

(5) The Board then recovers the expenses incurred in the forced sale.

(6) The Mortgagee then recovers the expenses incurred in the forced sale.

What is Residential Properties Scheme? (Link to CPF Board's website)

What is Public Housing Scheme? (Link to CPF Board's website)