Changes to Housing Developers Act and what they mean...

By The Folks @PropTalk - May 18, 2015 No Comments

ST reported this afternoon that The Ministry of National Development (MND) has announced on Monday that amendments to the Housing Developers (Control and Licensing) Act and subsidiary legislation will be implemented from May 25, 2015. This is to improve safeguards and enable prospective private home buyers to make better-informed purchasing decisions.

In April 2013, Parliament approved amendments to the Housing Developers (Control and Licensing) Act to improve and update legislative safeguards for buyers of uncompleted private residential properties.

The amendments will enhance market transparency by providing the public with more comprehensive and timelier information on the private residential property market.

The legislative amendments, which were finalised through a series of consultations with members of the public and industry stakeholders, are now ready to take effect, MND said.

Below are details of the amendments and what they mean (to us anyway):

1. Weekly collection and publication of transaction data
From May 25, 2015, housing developers must submit detailed transaction information to the Controller of Housing every week. This information will include sales volumes and transacted prices of individual units in their building projects, and the value of any benefits extended to buyers.

Developers will be required to submit this information to the Controller within five days of the end of each preceding week. This information will be published on the Urban Redevelopment Authority (URA) website weekly from June 5, 2015.

(* The wife and I have failed to find information on the old timeline for housing developers to submit detailed transaction information, but we seem to recall that this was previously done on a quarterly basis - we could be wrong and stand corrected by anyone who knows definitively.
And no more keeping discounts and rebates given to buyer outside of the selling price so as to maintain an artificial perception of a higher psf!  *)

2. More comprehensive information in transaction documents
The Option to Purchase and Sale & Purchase Agreement, which are standard forms prescribed under the Housing Developers Rules, will also be amended to enhance the safeguards for purchasers of private residential properties. For example, developers must indicate the value of any benefits offered to buyers.

The amendments to both forms will take effect on July 20, 2015. This is to provide developers sufficient time to comply with the amendments.

(* While this may again evolve more transparency, some buyers may feel "disadvantaged" as the quantum of housing loan that they can take will be reduced. *)

3. Ensuring the accuracy of show units
MND is introducing the Housing Developers (Show Unit) Rules to ensure that all show units provided by developers are accurate depictions of housing units offered for sale.

For example, one rule requires the floor area of the show unit to be the same as that of the actual housing unit. Another rule requires all external and structural walls to be built in the actual unit to be depicted in the show unit.
These Rules will take effect on July 20, 2015, to provide developers sufficient time to comply with the new requirements.

(* No more misrepresentations at showflats to give potential buyers a false sense of space or having a piano straddling between the balcony and living room - we kid you not! 
But to be fair, the wife and I have observed that developers are generally quite "disciplined" about the depiction of their showflats these days. However, the wife and I are not entirely convinced that all current showflats have the same exact floor area as the actual units. The new rules will make certain of that *)


Below is the MND Press Release:

Housing Developers (Show Unit) Rules
The requirements on show units are set out in the Housing Developers (Show Unit) Rules and include the following:

a. The floor area of the show unit must be the same as the depicted unit;

b. External and structural walls must be built, unless they need to be removed to provide access to and from the show unit. If these walls are removed, the position, thickness and width of the removed wall must be clearly marked on the floor and labelled;

c. All erected walls must be of the same thickness as that shown in the approved plans;

d. If any internal non-structural wall is not built in the show unit, the position, thickness and width of the removed wall must be clearly marked on the floor and labelled;

e. A drawn-to-scale floor plan of the show unit must be displayed at the entrance to the show unit;

f. Any models of the housing project displayed must be based on the approved plans; and

g. A list of materials, finishes, fittings and appliances which will be provided in the actual unit must be displayed in the show unit.

Exemption
Existing show units which have been erected, set up and made available for viewing before July 20, 2015, will be exempted from the new show unit requirements.

However, the developer must inform purchasers of the differences between the existing show unit and the actual unit as shown in the approved building plan, by prominently displaying a detailed list and description of the differences at the entrance of the show unit and giving purchasers a copy of the detailed list and description of the differences.


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