6 Easy Steps to Purchasing an Executive Condominium
Authors: Patrick Tan & Qiu Yong Hui
Rivercove Residences is the most anticipated new launch as it will be the only new Executive Condominium (“EC”) launch in 2018. Since it’s preview launch on 1 Apr 2018, it has attracted an oversubscription rate of 2.5 times for the project’s 628 units. Booking for Rivercove Residences will commence on 14 Apr 2018.
6 Easy Steps to Purchasing an Executive Condominium
The process to buying an EC differs slightly from a BTO as the developer is directly in charge of a large portion of the buying process. But this daunting journey can be broken down into 6 easy steps:
- Sales launch
Developers will usually announce the launch of an EC either in the newspapers and/or their website. You may contact the developer directly to find out more on indicative prices, preliminary designs, mode of application and the number of units offered.
At this stage, it would be prudent to review your finances and consider whether you need to take a bank loan or CPF Housing Grant. There will also be additional costs such as legal fees, renovation costs and any resale levies.
- Submitting application to the developer
The developer has the choice to offer the units via computer balloting or walk-in selection. This application is a registration of your interest rather than a formal application, and will entitle you priority to view and book a unit.
- Outcome of application
The developer will announce and notify all successful applicants according to its own method of selection and notification.
- Booking a flat
The developer will invite successful applicants to book a flat, sign the Option to Purchase and pay an option fee which is 5% of the purchase price (the “downpayment”).
If you are taking a CPF Housing Grant, the prescribed application form and supporting documents must be submitted to the developer within 1 week from the date of booking the EC unit. If the developer does not receive the full set of supporting documents within the 1-week deadline, it will not be able to process your application for the CPF Housing Grant in time for the downpayment.
Further, the CPF Withdrawal Form RPS/1A (Residential Properties Scheme) must also be submitted to the CPF Board. This is so that you can use your CPF money or the CPF Housing Grant, or both, for the payment of your EC unit.
Overview of Eligibility
The general eligibility criteria required for any government housing also applies to ECs. Namely, at least 1 applicant must be a Singapore citizen or Permanent Resident. If applying under the Joint Singles Scheme (“JSS”), applicants must be Singaporean citizens and at least 35 years old. Otherwise, applicants must be at least 21 years old.
Further, the combined household income of applicants must not exceed $14,000. Applicants must also not own any private property overseas or locally, or have not disposed of any within the last 30 months. This includes HUDC flats (privatised and non-privatised), properties acquired by gift, properties acquired as beneficiary under a Will or the Intestate Succession Act, and properties acquired as nominee.
If you currently own a HDB, DBSS or EC property, please take note whether the 5-year Minimum Occupation Period (counting from the TOP date) has been met. Otherwise, you will not be able to sell your current property, whereas a person is required to dispose of their previous HDB, DBSS or EC property within 6 months of buying another property.
However, if you have already bought (a) a flat directly from HDB; and/or (b) a DBSS or EC property directly from the developer at least twice, you are no longer eligible to make an application.
Similarly, those who have previously cancelled a HDB application will not be eligible for 1 year, while those who have terminated a Sale and Purchase Agreement while under a CPF Housing Grant will be barred for 5 years.
If you have received a CPF Housing Grant to purchase a property before, you are no longer eligible for the grant.
All applications must fall within 4 schemes, namely:
- Public Scheme;
- Fiancé / Fiancée Scheme;
- Orphans Scheme; and
- Joint Singles Scheme.
The Public Scheme requires an applicant to be living with (a) a spouse and children (if any); (b) parents and siblings (if any); or (c) children under the applicant’s legal custody, care and control (applicable for widowed or divorced applicants).
If applying for a dual-key EC as a multi-generation family under the Public Scheme, you must be either (a) a married or engaged couple with parents or grandparents; or (b) widowed or divorced with children and parents or grandparents.
Under the Fiancé / Fiancée Scheme, applicants form a family nucleus with your spouse-to-be. If either spouse-to-be is below 18 years old, you must obtain a Special Marriage Licence from the Ministry of Social and Family Development and submit it to us during the EC selection appointment.
The Orphan Scheme mandates that the applicant and siblings (those applying) must be orphans, single (unmarried, divorced, or widowed) and at least 1 of the deceased parents was a Singapore citizen or PR. All of the siblings that are single must be listed in the same application. Take note that under the Orphans Scheme, siblings are not allowed to buy or rent flats separately.
The Joint Singles Scheme allows up to 4 co-applicants to apply jointly, all of whom must be single (unmarried, divorced or widowed), Singapore citizens, and at least 35 years old. The CPF Housing Grant is not available for singles purchasing ECs.
In all applications, there may be no change of names listed in the application. Otherwise, the application will be considered invalid. The following examples illustrate the point:
- Under the Public Scheme, a parent’s name may not be later replaced with a spouse’s name or vice versa.
- In cases of break up under the Fiancé / Fiancée Scheme, the applicant may not later put in the name(s) of a new spouse-to-be or his/her parents, even if the previous spouse-to-be agrees.
If applicants are receiving the CPF Housing Grant, the prescribed application form should be submitted directly to the developer.
Specific income documents will also be required from the applicant and essential occupiers. This includes the latest 3 months’ payslips if employed full-time, 12 months’ of income documents for other employment types, or proof of unemployment if not working. The developer may request further documentation if required.
Please note that a Notice of Assessment from the Inland Revenue Authority of Singapore is not accepted for full-time employees, part-time employees, commissioned based workers or the self-employed. It is only applicable to odd job workers.
The application will then be reviewed by HDB for its approval, which usually takes about 3 to 4 weeks. Upon application, the developer will also provide a set of Property Details Information (“PDI”), which includes floor plans, rules and regulations, offered items and other documents relating to your unit.
At this stage, you may consider appointing solicitors to act for you at a competitive price, or if you are taking a bank loan, the bank may have a panel of firms to choose from.
- Signing the SPA
Once approved by HDB, the developer will provide the SPA to all successful applicants. Usually, you will have 3 weeks from the date of receipt but take note of the stated deadline on the SPA.
If you choose to sign the SPA, you will have to pay 15% of the purchase price to the developer. Legal fees and buyer’s stamp duty fees will also be payable within 2 to 9 weeks of signing the SPA. You can make payment by cash, cashier’s order, cheque or CPF. If you decide not to sign the SPA, the downpayment will be forfeited.
You will also have to submit a Letter of Offer if you are obtaining a housing loan from a bank.
The developer will usually offer either a Normal Payment Scheme or a Deferred Payment Scheme. In the Normal Payment Scheme, buyers make progressive payments according to certain milestones set in the SPA. In the Deferred Payment Scheme, the remaining purchase price is paid upon completion, usually at a 2-3% premium.
- Collecting keys
When the units are completed, there may be final payments due upon collection of keys.
If applying under the Fiancé / Fiancée Scheme, the couple’s marriage certificate will be due for submission at this stage. If a CPF Housing Grant is used, the marriage certificate must be submitted before taking possession of the unit. Otherwise, the marriage certificate is due within 3 months of taking possession.
Written by: Patrick Tan & Qiu Yong Hui