What is the "Option Money" for properties under construction?
The Option Money also called the booking fee is usually 5 to 10% of the purchase price.
What are the procedures for purchasing a property under development?
(a) The procedure is regulated if the developer is licensed under the Housing Developers’ (Control and Licensing) Act.
(b) Option to Purchase and Sale and Purchase Agreement.
To obtain the Option to Purchase you will pay a booking fee, which is 5 to 10% of the purchase price. Within two (2) weeks from the date of the Option to Purchase, you or your lawyer will receive the Sale and Purchase Agreement (in triplicate) from the Developer on terms and conditions approved by the Controller of Housing. You must then sign the Agreement and pay another 10% of the property within three (3) weeks of receipt for the Agreement. You may ask the Developer for an extension of time to pay this 10%. If purchaser decides not to sign the sale and purchase agreement and proceed with the purchase, 25% of the Option Money so paid would be forfeited by the developer. The balance 20% of the purchase price (less the Option Money) would be payable when the Sale and Purchase Agreement is signed or 8 weeks from the date of the option, depending on the terms stated in the option.
(c) Progress Payments
The remaining 80% of the purchase price is payable against issuance of the architect’s certificates as each stage of the construction progress. Liaise with your lawyer, your Banker and CPF Board to ensure that you obtain sufficient funds to make payment as and when due otherwise interest will be payable.
Click here for Standard progressive payment scheme chart
(b) Defect Liability Period
The developer is obliged to make good the defects in the property for the period of one (1) year commencing from the date the developer issues you the Notice to take possession of the property. If you discover any defects during this period, you should notify the developer in accordance with your rights provided for in the Sale and Purchase Agreement.
(e) Errors and misdescription
If the area of the property is less than the area stated in the Sale and Purchase Agreement, the Purchaser is entitled to a corresponding adjustment of the purchase price for the difference in excess of three (3) per cent of the specified area.
(f) Legal Completion
Legal title will be issued to you only when all progress payments have been made. the developer under the Sale and Purchase Agreement has to deliver to you the title to your individual property within 3 years from the date of the TOP.
CALL:Jasper +65 9100 6623 / Wing +65 94249079
EMAIL: Enquiries@sghousehub.com
