Transferring property ownership in Singapore involves a complicated conveyancing process that must be strictly adhered for it to be legal. The most expensive purchase most people will make in their lifetime is likely to be a property, which is why it’s vital that they follow the right procedures. This article explains Singapore’s conveyancing process, so that you understand what’s involved when deciding to purchase a property.

Before deciding to buy a property, it’s important that you do some research. Along with determining where you’d like to live, there are several more considerations:

• Eligibility Requirements: To purchase a landed residential property you are required to be Singaporean under the Residential Property Act. If you are a foreigner, you must first get the Controller of Residential Property to approve the purchase. However, you are still eligible to buy a condominium unit. Also, if you want to buy an HDB flat, don’t forget that there are restrictions on how many families of each ethnicity are allowed to live in HDB blocks;
• Size of Land / Floor Space: You will also need to determine how much land or floor space you’ll need to comfortably house your family;
• Purchase Price: In addition to the price of the property there will be additional fees to complete the conveyancing process including taxes and stamp duties;
• Financing: In determining your price range, you will need to figure out how you’re going to pay for the property. Depending on how much cash you have on hand, you may need to obtain a mortgage from a bank and/or withdraw money from your Central Provident Fund (CPF) savings.

Furthermore, your conveyancing lawyer will need to conduct a title search to get additional information on the property, as follows:

• Property Title & Tenure: You need to find out whether this is freehold property, which would belong to you indefinitely and go to your heirs, or whether it’s leasehold and would be yours for a fixed term that can or cannot be extended. If it’s a leasehold property, you need to find out how long the remaining lease is.
• Encumbrances: Your lawyer will need to find out if there are any caveats protecting the property or if it has a mortgage on it. If the property has any encumbrances, further measures will need to be taken to remove them if they can be removed;
• Name(s) of Registered Owners: You need to know the names of anyone having an ownership interest in the property; and
• How Ownership is Held: If the property has multiple owners, you need to find out how their ownership is held, whether it’s as joint tenants or tenants-in-common. If they are joint tenants, they own equal shares in the property no matter how much they paid for their share. If they are tenants-in-common they each own a proportional share depending on how much they contributed toward the purchase price.

A thorough title search should reveal whether the seller has “good root of title,” which means the seller has clear title to the property and he/she is able to sell it. If not, the title may be defective to the extent that it cannot be legally put on the market. We do not recommend anyone proceed with the process of purchasing a property without good root title. The seller must remedy the defects in the title (if possible) before anyone should buy the property.

Negotiations, Contracts & Payments

Once you decide which property you want to buy, negotiations begin with the seller or their agent on price. After coming to an agreement, you will pay the seller or their agent an option fee of 1% - 5% for an Option to Purchase (OTP).

Most sellers use their agent’s standard OTP template. However, this is not always in the buyer’s best interests. If this is the case in your transaction, your lawyer will negotiate with the seller’s lawyer on the terms to be included in the OTP or the subsequent Sale and Purchase Agreement, whichever one is being used. 

If negotiations result in an acceptable OTP, you will sign it and have an Option Period to contemplate your decision before you need to proceed with signing the Sale and Purchase Agreement, which usually contains the same terms set forth in the OTP.

Once you sign, your lawyer will take the next step of lodging a caveat on your property with the Singapore Land Authority (SLA). This gives notice to third parties that you now own the property. It also allows you and your lawyer to be informed of any subsequent dealings involving the property.

At the same time that you sign the Sale and Purchase Agreement you will need to pay the balance of the down payment, which us typically 5% - 10% of the purchase price, less the option fee. You will pay the conveyancing money to your lawyer who will put it in a conveyancing account. The funds will then go to the seller on the completion.

The conveyancing account can be:

• An account specifically opened by the conveyancing law firm for the purpose of receiving these types of payments;
• The Singapore Academy of Law’s Conveyancing Money Service; or
• An escrow account owned jointly by the lawyer representing the buyer and seller.

Taking Possession & Transferring Title

Once the property is ready, the contracts signed and the down payment made, the seller gives the buyer vacant possession, which means it’s ready for the buyer to move in. Before moving in, the buyer should carefully inspect every inch of the property to make sure there are no defects. If any are found, they should immediately notify the seller, so the seller can rectify them.

Once all matters have been handled, the buyer will receive a transfer form showing the change in ownership, a certificate of title, and the keys to the property. The transaction is now complete.

In Singapore it’s not unusual for property to be sold with a tenant living in it. When this happens, the buyer becomes the tenant’s landlord on completion of the sale and the tenancy just continues as before. 

The process of purchasing property can be complicated since there are so many precautions that must be taken and steps to complete the process. The procedure varies depending on whether you are transferring a landed property, a condominium or an HDB flat. This is why we recommend that you engaged a competent real estate agent. They can help you find a great property, negotiate a good price, and handle the paperwork, all while protecting your interests.

Disclaimer: The information provided in this article does not constitute legal advice. We recommend that you get the specific legal advice you need from an experienced attorney prior to taking any legal action. While we try our best to make sure that the information provided on our website is accurate, you take a risk by relying on it.

At Pinnacle Estate Agency, we strongly believe in sharing our real estate knowledge to the public.⁠ For more content like this article, check out our Singapore Property Guides.