Learning outcomes of this chapter:
- Observe in practice the application of “caveat emptor” and duty of disclosure in respect of defects in title and physical defects during sale.
- Determine what will constitute misrepresentation and the liabilities.
- Carry out sale procedure according to current practice (cross-refer to Paper 2, Unit 3.2).
- Verify legal title of the seller.
- Understand the various formalities: by deed, in writing and evidenced in writing, and be conversant with the legal requirements for a contract for sale of property to be enforceable.
- Use the OTP and S&P contractual agreements competently and understand their legal effect.
- Handle transaction monies lawfully.
- Understand legal requisitions and their purposes.
- Understand the requirement to conduct bankruptcy searches during property transactions in accordance with Land Titles Act.
- In accordance with Building Maintenance and Strata Management Act (BMSMA), guide prospective buyers of strata-titled properties on by-laws (S32), improvements and additions to lots (S37), contributions by subsidiary proprietors (S40), supply of information by management corporation (MC) (S47), and any other provisions that may affect strata living.
- Explain whether a contract has been entered into in various scenarios, e.g. via different modes of acceptance, repudiation by either party (e.g. buyer stopping cheque after exercising option), “subject to contract” and “conditional contract” (e.g. subject to satisfactory replies to legal requisitions); when a breach occurs and the right of the injured party to rescind the contract, etc.
- Understand the rights and duties of the buyer and seller after signing of contract but before legal completion of sale, including apportionment of stamp duty, management fees and sinking funds for stratatitled properties, property tax and goods & services tax (GST); damage to property; and appreciation in property value.
- Construe the rights and obligations of seller/buyer where the Law Society of Singapore’s Conditions of Sale are incorporated in the OTP or S&P agreement.
- Appreciate the key feature clauses (e.g. payment of conveyancing money to the conveyancing account of the seller’s solicitor, seller and buyer’s liability to pay stamp duty, i.e. seller’s stamp duty (SSD), buyer’s stamp duty (BSD) and additional buyer’s stamp duty (ABSD), buyer’s entitlement to deduct the amount of SSD charged from the purchase price in the event seller fails to pay SSD, late completion interest, outgoings, rents and profits until completion) and how they affect salespersons.
- Appreciate the effect of Residential Property Act (cross-refer to Paper 1, Unit 2.12), Land Acquisition Act and Bankruptcy Act, on the sale of land/property.
- Understand what is involved in the legal completion of sale.
Related Multiple Choice Questions