Developers rush to meet marketing rules deadline

Straits Times: Tue, May 15
DEVELOPERS are warning of administrative headaches in the changeover to new rules this Friday requiring them to be more transparent in the marketing of their projects.

A check with developers by The Straits Times found that most are ready to meet the deadline on Friday.

But they report a frenzy of activity as developers, lawyers and architects rush to tie up loose ends given the tight deadline of just one month since the changes were announced.

Developers say that while they do not anticipate major challenges in complying with the new rules, the sales process will become much more complicated.

There will be an increase in paperwork, especially for projects with units left unsold at the time of the change.

They will need two versions of sales and purchase agreements and options to purchase – one for sales before May18 and another set after. Each will have different contractual obligations.

This means that even if a few units in a launched project are unsold, the developer must use the new versions of the purchase documents mandated by the Urban Redevelopment Authority (URA) for all sales from Friday onwards.

The URA made changes to its Housing Developers Rules last month, requiring developers to give more information in writing on the project and unit to buyers before the option to purchase is issued.

This first phase of changes to ensure that ‘what you see is what you get’ requires developers to provide a drawn-to-scale project location plan and site plans. They must also give a unit floor plan and a breakdown of a unit’s floor area by spaces such as bedrooms, balconies and bay windows.

Other new requirements include getting the consent of home buyers before making changes such as adjustments to a unit’s layout.

A CapitaLand Residential Singapore spokesman said the firm has been adopting many of these best practices and does not anticipate major challenges in complying with the new rules.

‘We will work with our various project consultants to compile and present the required information in the clearest and most concise manner possible, whether in the form of text or diagrams, so as to help our home buyers make better informed decisions.

‘We believe this is a positive move that will enhance the attractiveness of the Singapore property market to both local and foreign home buyers, so we are fully supportive of it,’ he added.

One privately held developer, however, flagged the tight deadline as one of the key challenges in complying with the new regulations.

‘We have quite a number of projects that are affected and many of these projects are handled by the same consultants, so it means they have to work extra hard to meet the deadline,’ it said.

Another mainboard-listed developer, which declined to be named, noted that certain rules are not clearly defined, leaving some ambiguity as to what exactly they apply to.

For instance, developers have to notify home buyers about ‘substantive changes’ to the common property in a project, but what constitutes ‘substantive’ is unclear. Positive improvements to the project could also possibly be held hostage by a single difficult buyer unless he chooses to forgo his purchase.

Mr Lee Liat Yeang, a partner at Rodyk & Davidson’s Real Estate Practice Group, noted that these rules are also applicable to executive condominiums and Design, Build and Sell Scheme projects.

‘Due to the special nature of such projects, developers and lawyers have spent extra time liaising with the regulatory authority HDB on the specific changes to be made to the option and sales and purchase agreement formats to be used for these projects.’

Mr Lee added that industry players feel the preparation time given for the new rules to be implemented is too short, especially since they are also applicable to projects which have been partly sold before this Friday.

esthert@sph.com.sg

Source: The Straits Times © Singapore Press Holdings Ltd

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