The urban redevelopment authority is looking for public feedback on the changes that it has made to the rules for non-residential developers. This change was made to protect the interests of those who buy incomplete industrial and commercial properties.
The benefit of such a program is three-fold. It will increase transparency, improve industry standards, and help buyers make better decisions.
The industry experts see this innovation as binding the rules for both non-residential and residential developers. This rule accords various classes of buyers the same protection under the law.
The public members can leave their opinions on until March 12.
The URA is also checking public opinion for anti-money laundering (AML) and counter financing of terrorism (CFT) requirements. These clauses will also be imposed on both residential and non-residential developers.
The Real Estate Developers’ Association of Singapore has also been contacted by the URA for its views.
The agency would take the views seriously before implementing changes in Sale of Commercial Properties Act and Sale of Commercial Properties Rules legislation. The changes would be adopted practically next year.
Currently, developers don’t have to acquire a sale license for selling units in unfinished commercial and residential projects. In addition, there isn’t a separate bank account which ensures that a buyers’ payment is only used for the purposes of the project.
The proposed changes now include:
- The requirement of obtaining a sale license before developers sell unfinished non-residential projects of more than 4 strata units. Minimum requirements would have to be met before the sale license is issued.
- Companies would open up a project account. Money for the project in installments or otherwise must be deposited in this account. Withdrawals would be done only for future project purposes.
- Obtain buyers permission for changes. Amounts would also be reserved for any project changes. It is proposed that a 4 percent of the project price would be set aside for correcting defects.
- Provide correct information on project advertisements.
- Additional information on the project before a booking fee is accepted. The additional information can be drawn-to-scale floor plan showing the entire floor area in the strata
The URA proposes that units for non-residential requirements precisely show the approved units.
According to Singapore research head Alan Cheong, this will harmonize the interactions between residential and non-residential sectors. When the same rules are applied are to both the sectors, buyers can make intelligent decisions.
Under the anticipated AML and CFT rules, developers will have to impose rules to fight money laundering and corruption. The rules implemented to counter such activities include conducting customer authenticity checks and obtain transaction checks for a period of time after the project has been completed.
Developers will have to enforce some quality assurance policies to train their employees and keep an account on their customers’ due-diligence.
The reality is not that easy as Mr. Cheong has commented that the enormity of residential units and the buyers’ frustration with the process may be a hurdle in proper implementation.
Refer to here for more info: http://www.businesstimes.com.sg/real-estate/ura-trying-to-harmonise-rules-for-property-developers-analysts
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