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Homebuying – Some important points to consider by Standard Chartered Bank
Full Article 5 minutes read

Buying a place to live in is more than just choosing the right property. Homebuyers need to be fully aware of all the various processes involved. This ensures that the homebuyers’ interests are taken care of in all phases of the transaction.


What are some of the Legal Issues Involved in Purchasing Property?

When buying property, there will be some important documents which you need to sign. Always ensure that you understand every aspect of these documents before you sign on the dotted line. If in doubt, always consult your lawyer. These are some of the issues that you need to consider:

  • Appoint your own lawyer. A conflict of interest could occur if the same lawyer represents both buyer and the seller.
  • Read and fully understand the terms and conditions stated in the Sale and Purchase Agreement (S&P). Your lawyer should be consulted throughout this process.
  • If you are buying from the developer, make your payment to the developer through your lawyer to ensure your interest is safeguarded. Your lawyer then assumes responsibility for purchasing your property on your behalf. A Sale and Purchase Agreement (S&P) constitutes a legal agreement signed between the buyer and the seller (often the developer) who have both agreed to the terms and conditions specified.
  • Ensure that your lawyer conducts a search on the master title of the property to ensure that the seller is the legal owner of the property and therefore the rightful seller. Also to ensure that there will be no complications on the title deed for the property when transferring to you.


Legal Fees

The legal fees charged will depend on the kind of property transaction involved and the price of the property.


What Other Costs Are Involved?

The purchasing costs for a property and the charges involved in obtaining a loan to facilitate a property purchase will add up. In addition to the legal fees, other fees include – valuation fees, legal fees for loan documentation (between you and your financial institution), mortgage insurance (if required), fire insurance, stamp duty and lending fees.


Legal Aspects of Buying a New Property

When buying a new property, there are a few legal aspects to consider.

Homebuyers will normally pay a 10 percent deposit to the developer upon signing the S&P. Ensure that the official receipt is kept safely, as it will be treated as evidence in the event of a dispute. You have a right of ownership to the property once the deposit is paid and S&P is signed. You will then be responsible for making payment on the remaining instalments. If you or your mortgage provider do not settle any of the instalments within the time specified in the S&P agreement, you may be liable to pay interest charges based on the unpaid instalments to the developer. Failure to pay any of the instalments and interest due (if applicable) within the specified time frame may result in the developer terminating the S&P and your deposit paid to the developer may be forfeited. As such, please ensure you read and understand every clause in the S&P agreement.

Once your new property is ready, you can take delivery of the house upon receipt of notice from the developer. Do ensure that you conduct an inspection of the house and notify the developer of any defects.

List down the defects that need to be corrected and make sure you take a copy of the list for your own reference. There should be a defects liability period for every new house purchased from the developer and you may want to ensure this is stipulated in the S&P agreement.

At the time of delivery of vacant possession, the developer must apply for Certificate of Fitness for Occupation (CFO) or Occupation Permit (OP) from the relevant authorities. The certificate is an official document issued by your local authority to acknowledge that this particular property is safe and can be occupied. The homebuyer is only entitled to occupy the property once the CFO is issued. This is relevant only for newly built properties.

If the developer fails to deliver your property within the time specified in the S&P, the developer is liable to pay the homebuyers damages. You may want to ensure such clause is stipulated in the S&P.


Professional Advice

The old saying – “buyers beware”, need not always apply when purchasing property. However, seeking professional advice is always recommended and it is also wise to first go through a self-assessed financial check-up. Standard Chartered offers such services to its customers to help you to be at your financial best. A good lawyer and a knowledgeable bank are high on the list of professional assistance.


This article is for general information purposes only and whilst the information in it is believed to be reliable, it has not been independently verified by us. You are advised to exercise your own independent judgment with the contents in this article and seek the advice of your professional advisers if necessary

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