Public consultation on proposed changes to the Sale of Commercial Properties Act and Sale of Commercial Properties Rules

  Published: 12 February 2018
To better protect buyers’ interest in their purchase of uncompleted non-residential properties, the Urban Redevelopment Authority (URA) is seeking public feedback on the key proposed changes to the Sale of Commercial Properties Act (SCPA) and Sale of Commercial Properties Rules (SCPR). These changes will enhance transparency and raise industry standards to help buyers make informed decisions. 
The public will also be consulted on the proposed anti-money laundering (AML) and counter financing of terrorism (CFT) requirements to be imposed on all residential and non-residential developers.
The consultation period is from 12 February to 12 March 2018, and the public can visit to provide their feedback. URA has also reached out to the industry stakeholders such as the Real Estate Developers Association of Singapore for their feedback on the proposed changes. URA will take the feedback into consideration before finalising the changes to the SCPA and SCPR legislation.
Proposed changes to the SCPA and SCPR 
The SCPA was enacted in 1979 to address unfair sale practices in non-residential properties, through the following key measures:
  • Requiring the use of prescribed Option to Purchase and Sale and Purchase Agreements to ensure equitable sales terms; and 
  • Requiring that the Building Plan approval be obtained before the commencement of sale. 
The SCPA is supplemented by the SCPR which stipulates the operational requirements for developers in the sale of uncompleted non-residential units before the issue of the Certificate of Statutory Completion and titles. 
Below are the key proposed changes which we are seeking public feedback on:
  • Non-residential developers to obtain sale licence before they can sell the units
    Developers will be required to apply for a licence if they are developing and selling units in uncompleted non-residential projects with more than 4 strata units. They will have to meet the minimum qualifying requirements before they are allowed to sell uncompleted units. 
  • Non-residential developers to open and maintain project account
    To ensure that purchasers’ progress payments are only used for purposes related to the project, developers who are selling uncompleted non-residential properties will be required to open and maintain a project account. Instalments of the purchase price received from purchasers up to the issue of temporary occupation permit and construction loans for the project must be deposited into the project account, and withdrawals are only allowed for purposes related to the development of the project.  
  • New rules on advertisements
    Non-residential developers will be required to provide basic and accurate information on the project (e.g. tenure, expected date of vacant possession) in advertisements, including in their project website and sales brochures. Advertisements must be in accordance with the plans approved by the authorities, and must not contain any false or misleading information.
  • Provide additional information on non-residential projects
    Developers are currently required to provide basic information on the schedule of strata units showing the share values, and a plan or description of the limited common property designated on the strata plan for the exclusive use of the designated strata lots.

    To allow purchasers to have sufficient information to make informed decisions, non-residential developers will be required to provide additional key information on the project before accepting a booking fee from a prospective purchaser, such as the drawn-to-scale floor plan that should depict all floor spaces (e.g. AC ledge, void) in the strata unit, as well as the developer’s track record. 
  • Show units to depict the actual units accurately
    To ensure that show units accurately depict the actual approved units, non-residential developers must comply with the new show unit rules, such as the requirement that the show unit must be built exactly in accordance to the approved building plan for the actual unit.
  • Obtain purchasers’ consent for changes to the project
    Non-residential developers will be required to obtain purchasers’ consent for any changes to the unit or substantive changes to the common property if the changes made are not due to new requirements introduced by the authorities. For changes made due to new requirements of the authorities, developers only need to inform the purchasers since these are mandatory requirements which developers have to comply with. 
  • Amount set aside for defects rectification
    The payment schedule will be amended to set aside 4% of the purchase price for defects rectification, so that purchasers can claim the cost of rectification works if the non-residential developer fails to carry out the works.
New AML and CFT requirements on all developers 
Singapore is a member of the Financial Action Task Force (FATF), an international body in charge of setting global standards to combat money laundering and terrorist financing. The FATF Recommendations are applicable to the financial sector as well as the designated non-financial businesses and professions, including developers involved in direct sale transactions of properties. 
Developers will be required to implement measures to meet Singapore’s obligation to combat money laundering and terrorist financing. New rules will be implemented to impose the AML and CFT requirements on all residential and non-residential developers, e.g. conduct customer due diligence (CDD) checks to verify customer’s identity, maintain transaction documents and CDD checks for a specified time period following termination or completion of a transaction.