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Options for buyers when developers go bust and projects are unfinished
Tue, May 07, 2019
IT IS a rare case of a Singapore developer going bust, leaving the residential projects unfinished.
But for some 183 people, their worst nightmare came true when developers of the 70-unit freehold condominium at Laurel Tree along Hillview Terrace and the 96 residential units and 17 shops in the Sycamore Tree project in Joo Chiat went belly up, leaving the projects uncompleted.
Receivers told buyers of Sycamore Tree development that United Overseas Bank (UOB) would drop the requirement for premium top-ups but on condition that buyers waive their rights to claim liquidated damages, which are compensation that developers must pay buyers for delays - against their progress payments. Based on the sale and purchase agreement, the developer will have to pay liquidated damages of 10 per cent per annum of what buyers have to pay.
The Business Times asked Tan Ching Chern, partner at Withers KhattarWong LLP, to explain the implications if buyers were to accept this waiver request.
Ms Tan said since the temporary occupation permit (TOP) was expected in Dec 29, 2016, the developer is late for both the service of the TOP Notice and the Notice to Complete (usually pegged at three years from the contractual TOP deadline).
"As such, the receiver should be asking for the waiver of both categories of late interest under the sale and purchase agreement,'' Ms Tan explained.
Under usual circumstances where the developer remains solvent, the buyers are contractually entitled to claim late interest of up to 10 per cent per annum of what the buyers had paid into the developer's project account for the period of the developer's delay in serving on the buyers the TOP Notice and the Notice to Complete respectively. Such late interest would come from the developer's profits or own funds.
However, in this situation where the developers are insolvent, it is unlikely that there is any money available to pay the buyers any late interest.
"While this option will not entitle the buyer to be compensated for the delays (since they would be waiving their right to any late interest), the main benefit of this option is that it would allow each buyer to still enjoy the benefit of the money that the buyer has already paid into the project account and the buyer would only have to pay the rest of the contractual purchase price to obtain the unit the buyer had contracted to buy - that is. no additional financial outlay towards this unit,'' Ms Tan said.
This is "a less costly option" for the buyer than having to "top-up" to contribute to complete construction because any such "top-up" would have to be paid using the buyer's own funds (since the CPF lump sum withdrawal and mortgage loan would only cover the previously approved portions of the contractual purchase price and not any additional "top-up" sums).
"The effect is that the buyer's next mortgage loan release towards the purchase price would only be processed by the buyer's own mortgagee after the full "top-up" has been paid by the buyer using the buyer's own cash,'' Ms Tan said.
She further advised: "For the avoidance of doubt, buyers should seek clarification from the receivers that in exchange for their waiver of the late interest, the receivers will be contractually bound to fulfil all terms of the original sale and purchase agreement - that is, not merely delivering vacant possession of the unit, but also delivering the Certificate of Statutory Completion (CSC) and separate legal title to the unit, as well as, providing the benefit of the 12-month defect liability."
The CSC and separate legal title are required for the buyer to be able to sell the fully completed unit to a purchaser in due course.
On what happens when the project is completed and buyers need to make claims, Ms Tan said: "During the 12-month defect liability period, the buyer can rely on the terms of the sale and purchase agreement, where buyers have the right to have defects rectified and the right to withhold up to 5 per cent of the purchase price, in the event that the receivers (stepping into the developer's shoes in the sale and purchase agreement) have failed to fulfil the developer's contractual obligations to rectify defects in accordance with the sale and purchase agreement."
The lawyer said since the developer is insolvent, it would not be advisable for the buyers to expect to recover any money from suing the developer.
The other option offered by receivers was to allow the receivers to sell the land and repay the outstanding loans owed by the developer to its paramount mortgagee, which is UOB.
But Ms Tan noted that with late interest continuing to accrue on the outstanding mortgage loans, it is unlikely that there will be any money left after paying UOB.
"Since suing the developer for damages would simply be a case of throwing more good money after the bad, the effect of this option is that the buyers will lose all the money that they have paid into the project account to-date and be unable to recover any damages,'' Ms Tan said.
"Realistically, this option is only expected to benefit the developer's paramount mortgagee,'' she added.
In such cases the where the developers are unable or delayed to finish the projects, the buyers reserve their rights to claim the liquated damages along with the respective compensation against their progress payments for the delay. Which is 10% per annum based on the sale and purchase agreement.
Now if the developer remains solvent then only the buyers can claim the amount that the buyers had paid into the developer's project account, along with the compensation amount of 10% per annum for the period of the developer's delay. These late interests should be paid from the developers own funds or profits. But in case the developers became insolvent then no money for late interest can be paid to the buyers.
https://propertyweb.sg/
Contact bro Arcachon who will buy over from you.
Contact bro Arcachon who will buy over from you.
When property investment goes bust, whose problem the buyer or the agent.
There are a lot of small boys mentality in property investor, they will put the blame on everyone except themselves.
Do I made a mistake, sure I do and I learn and move forward.
Contact me and I look at your problem whether you should sell or hold.
Many in the forum, if you are here long enough, will know they don't share much other than showing their small boys mentality.
I believe in sharing and asking, you can never make everyone happy end of the day if you are happy who cares.
Let this be a lesson learn and everyone remind each other.
Happy Father Day.
Pardon my England if you cannot understand too bad.
Happy Father’s Day bro.
Most times I don’t share because it’s easily misconstrued as being selfish.
I did share that LH or FH is not the most crucial factor.
When property investment goes bust, whose problem the buyer or the agent.
There are a lot of small boys mentality in property investor, they will put the blame on everyone except themselves.
Do I made a mistake, sure I do and I learn and move forward.
Contact me and I look at your problem whether you should sell or hold.
Many in the forum, if you are here long enough, will know they don't share much other than showing their small boys mentality.
I believe in sharing and asking, you can never make everyone happy end of the day if you are happy who cares.
Let this be a lesson learn and everyone remind each other.
Happy Father Day.
Pardon my England if you cannot understand too bad.
Once comission is in the agents' pocket, don't expect him to bother about you anymore.
In the showflat, he will say everything is good.. developer good, location good, price good.
When something goes wrong, sorry not his problem anymore. At most offer you some useless advice but don't expect him to cough out the commission to support you.
Worst still, he already block your hp number when deal is done...
That’s not fair. My agents so far are quite good, still send me cards on my birthdays.
Of course, if bought a defective one, it’s hard to make anyone happy, especially the buyer.
Once comission is in the agents' pocket, don't expect him to bother about you anymore.
In the showflat, he will say everything is good.. developer good, location good, price good.
When something goes wrong, sorry not his problem anymore. At most offer you some useless advice but don't expect him to cough out the commission to support you.
Worst still, he already block your hp number when deal is done...
That’s not fair. My agents so far are quite good, still send me cards on my birthdays.
Of course, if bought a defective one, it’s hard to make anyone happy, especially the buyer.
What do you think are the agents' ulterior motive for sending you birthday cards? You should well know... his HP no. is sure to be on the card.
Just to let you know it is after sales service.
So quite different from what you say it is like.
Anyway, agent also need to earn a living.
What do you think are the agents' ulterior motive for sending you birthday cards? You should well know... his HP no. is sure to be on the card.
Just to let you know it is after sales service.
So quite different from what you say it is like.
Anyway, agent also need to earn a living.
No doubt there are good agents around who act in the best interests of their client.
But definitely not the agents lurking around in this forum, esp agent "A".
No doubt there are good agents around who act in the best interests of their client.
But definitely not the agents lurking around in this forum, esp agent "A".
A lot of small boys or maybe little girls in property investor just by reading their posting.
None of my property bought because of Agent selling, only a small boy and little girl will listen to the sweet talk.
After the sweet talk, they will blame everyone except themselves.
So sad for them when they can just google and ask but chose to AssUme.
No worry small boy and the little girl got a lot of 10 years to spend not an old man like me.
A lot of small boys or maybe little girls in property investor just by reading their posting.
None of my property bought because of Agent selling, only a small boy and little girl will listen to the sweet talk.
After the sweet talk, they will blame everyone except themselves.
So sad for them when they can just google and ask but chose to AssUme.
No worry small boy and the little girl got a lot of 10 years to spend not an old man like me.
You are the one doing the sweet talk...
You are the one doing the sweet talk...
Then you must be the small boy or the little girl property investor.
No worry you got all the Time to learn, I old man only got 30 years left if lucky.
To be fair to Arcachon, he is really passionate about property. He has been advocating to buy way long before becoming agent.
I believe he will make a decent agent.
Then you must be the small boy or the little girl property investor.
No worry you got all the Time to learn, I old man only got 30 years left if lucky.
To be fair to Arcachon, he is really passionate about property. He has been advocating to buy way long before becoming agent.
I believe he will make a decent agent.
Thanks, I share facts and figures but somehow people try very hard to label me.
It is alright because when we leave this world we carry nothing with us.
Property investment is for the long term, for the short term it is called gambling.
Small boys and little girls please take note.
The Government already remove the element of gambling to a minimum of 3 years and tag to one salary to buy a property.
Property since 2013 needs to crash 20% and 2018 25% in order for the bank to call.
Many who get burn in the down cycle will have their scar with them, some will show everyone they know others will recover.
Invest in the thing you know not the thing you like, I still learning from the agent side.
Was surprise many agents know how to sell but don't know how to invest.
Small boys and little girls will label all the same this is understandable.
Big boys here like to keep also understandable because you can never get the Small boys and little girls to appreciate what you share.
Singapore property is not going to be cheap it can only be more expensive due to the Time Value of Money, you can never buy 3 room HDB for $6,600 or my Southbank for $535,000.
Small boys and little girls got a lot of Time to talk cock and Sing Song please remember Time is your limit waste it and it will never be back.
55 years in this World I am happy what I have done, stay in America for 30 months in the West Coast and East coast 6 months, Italy 20 weeks, France 8 years 8 months what else do one's need.
Those who want to learn, please ask. Those who want to talk cock, please sing we are here for you.
Thanks, I share facts and figures but somehow people try very hard to label me.
It is alright because when we leave this world we carry nothing with us.
Property investment is for the long term, for the short term it is called gambling.
Small boys and little girls please take note.
The Government already remove the element of gambling to a minimum of 3 years and tag to one salary to buy a property.
Property since 2013 needs to crash 20% and 2018 25% in order for the bank to call.
Many who get burn in the down cycle will have their scar with them, some will show everyone they know others will recover.
Invest in the thing you know not the thing you like, I still learning from the agent side.
Was surprise many agents know how to sell but don't know how to invest.
Small boys and little girls will label all the same this is understandable.
Big boys here like to keep also understandable because you can never get the Small boys and little girls to appreciate what you share.
Singapore property is not going to be cheap it can only be more expensive due to the Time Value of Money, you can never buy 3 room HDB for $6,600 or my Southbank for $535,000.
Small boys and little girls got a lot of Time to talk cock and Sing Song please remember Time is your limit waste it and it will never be back.
55 years in this World I am happy what I have done, stay in America for 30 months in the West Coast and East coast 6 months, Italy 20 weeks, France 8 years 8 months what else do one's need.
Those who want to learn, please ask. Those who want to talk cock, please sing we are here for you.
I am sure many here are better off than you including myself. Stop being so arrogant just because you have a pathetic southbank. It is still selling for cheap btw...
You don't seem to fully understand what is the Time Value of Money, so do not embarrass yourself when there are accountants and businessmen here.
I bet you don't even have a university degree uncle. 55 year old still not too late to study hard.
I am sure many here are better off than you including myself. Stop being so arrogant just because you have a pathetic southbank. It is still selling for cheap btw...
You don't seem to fully understand what is the Time Value of Money, so do not embarrass yourself when there are accountants and businessmen here.
I bet you don't even have a university degree uncle. 55 year old still not too late to study hard.
1BR - *Fully Sold*
1+STUDY #0443 $854K
2BR CLASSIC #0324 $877K
2BR DELX #0374 $1.003M
2PREMIUM #0240 $1.355M
3CLASSIC #0348 $1.299M
3DELUXE #0238 $1.428M
3STUDY #0264 $1.616M
4CLASSIC #0242 $1.872M
4DELUXE #0233 $1.945M
5LUX #0257 $2.532M
*New Prices as of 17/06!!*
1BR - *Fully Sold*
1+STUDY #0443
*NEW PRICE $881K*
2BR CLASSIC #0376
*NEW PRICE $978K*
2BR DELX #0374
*NEW PRICE $1.036K*
2PREMIUM #0240
*NEW PRICE $1.383K*
3CLASSIC #0348
*NEW PRICE $1.326K*
3DELUXE #0238/#0239
*NEW PRICE $1.458K*
3STUDY #0264
*NEW PRICE $1.649K*
4CLASSIC #0242
*NEW PRICE $1.891K*
4DELUXE #0233
*NEW PRICE $1.965K*
5LUX #0257
*NEW PRICE $2.558K*
I got this I got that who cares. You die everything you got also cannot bring.
You come empty, you go empty. Amen.
I ask Banker, Accountant, Lawyer who print money most cannot answer.
1BR - *Fully Sold*
1+STUDY #0443 $854K
2BR CLASSIC #0324 $877K
2BR DELX #0374 $1.003M
2PREMIUM #0240 $1.355M
3CLASSIC #0348 $1.299M
3DELUXE #0238 $1.428M
3STUDY #0264 $1.616M
4CLASSIC #0242 $1.872M
4DELUXE #0233 $1.945M
5LUX #0257 $2.532M
*New Prices as of 17/06!!*
1BR - *Fully Sold*
1+STUDY #0443
*NEW PRICE $881K*
2BR CLASSIC #0376
*NEW PRICE $978K*
2BR DELX #0374
*NEW PRICE $1.036K*
2PREMIUM #0240
*NEW PRICE $1.383K*
3CLASSIC #0348
*NEW PRICE $1.326K*
3DELUXE #0238/#0239
*NEW PRICE $1.458K*
3STUDY #0264
*NEW PRICE $1.649K*
4CLASSIC #0242
*NEW PRICE $1.891K*
4DELUXE #0233
*NEW PRICE $1.965K*
5LUX #0257
*NEW PRICE $2.558K*
I got this I got that who cares. You die everything you got also cannot bring.
You come empty, you go empty. Amen.
I ask Banker, Accountant, Lawyer who print money most cannot answer.
This is how ah beng talk... no sense, no link, no value.
Which project are these prices for, still trying to psycho your poor vulnerable clients?
This is how ah beng talk... no sense, no link, no value.
Which project are these prices for, still trying to psycho your poor vulnerable clients?
People know which project only you don't
For you to find out for me to know.
I am sure many here are better off than you including myself. Stop being so arrogant just because you have a pathetic southbank. It is still selling for cheap btw...
You don't seem to fully understand what is the Time Value of Money, so do not embarrass yourself when there are accountants and businessmen here.
I bet you don't even have a university degree uncle. 55 year old still not too late to study hard.
Please shut up and get lost.
We rather read agent A’s post than your rubbish complain.
You contribute nothing here.
Please shut up and get lost.
We rather read agent A’s post than your rubbish complain.
You contribute nothing here.
It is you again Mr Xan. Nice seeing another nasty post of yours. As I said before, not necessary to post "informative" posts when all are agents and bulls here. I think you are the one complaining, am I?
As the saying goes... "Birds of a feather flock together." No elaboration need.
Having just browsed through your interaction with Agent A on garden thread, you also don't understand what Time Value of Money means.
Good luck.. continue mixing with the wrong people...
When property investment goes bust, whose problem the buyer or the agent.
There are a lot of small boys mentality in property investor, they will put the blame on everyone except themselves.
Do I made a mistake, sure I do and I learn and move forward.
Contact me and I look at your problem whether you should sell or hold.
Many in the forum, if you are here long enough, will know they don't share much other than showing their small boys mentality.
I believe in sharing and asking, you can never make everyone happy end of the day if you are happy who cares.
Let this be a lesson learn and everyone remind each other.
Happy Father Day.
Pardon my England if you cannot understand too bad.
Hmm.. Very informative and helpful reply from your favourite Agent A, Mr Xan.
I am contributing to this forum by countering a crazy mad old bull, who calls buy all the time and all new launch projects "undervalued".
Even the bull analysts have woken up, but Agent A and pals are still in dreamland.
New private home sales surged in May but analysts say it is still a buyers' market
https://www.todayonline.com/singapore/new-private-home-sales-surged-may-analysts-say-it-still-buyers-market
Even the bull analysts have woken up, but Agent A and pals are still in dreamland.
New private home sales surged in May but analysts say it is still a buyers' market
https://www.todayonline.com/singapore/new-private-home-sales-surged-may-analysts-say-it-still-buyers-market
Wow, 26 posts and you got such a review, nice posting.
Wow, 26 posts and you got such a review, nice posting.
Does not look like a review, just another uneducated person displaying his bad manners.
You should take a look at your comprehensive review on Tre Ver thread...
Does not look like a review, just another uneducated person displaying his bad manners.
You should take a look at your comprehensive review on Tre Ver thread...
Who knows maybe all from the same child. Haha
It is you again Mr Xan. Nice seeing another nasty post of yours. As I said before, not necessary to post "informative" posts when all are agents and bulls here. I think you are the one complaining, am I?
As the saying goes... "Birds of a feather flock together." No elaboration need.
Having just browsed through your interaction with Agent A on garden thread, you also don't understand what Time Value of Money means.
Good luck.. continue mixing with the wrong people...
First of all, please get my gender right before you talk further.
Browse through all your hardwarezone comments, as usual, all sounds like shit.
Public enemy wherever you go.
First of all, please get my gender right before you talk further.
Browse through all your hardwarezone comments, as usual, all sounds like shit.
Public enemy wherever you go.
Too bad for you Ms Xan. Look whose comments sound "shitter" right now. I am sorry to say but you need to grow up.
Hope made some good investments since joining this forum in May 2010!
Too bad for you Ms Xan. Look whose comments sound "shitter" right now. I am sorry to say but you need to grow up.
Hope made some good investments since joining this forum in May 2010!
Guess we need minority, don't know where it goes.
Too bad for you Ms Xan. Look whose comments sound "shitter" right now. I am sorry to say but you need to grow up.
Hope made some good investments since joining this forum in May 2010!
Don’t you feel ashamed of yourself getting bashed in every forum?
Seems like you have no shame at all.
Not sure who suppose to grow up.
Don’t you feel ashamed of yourself getting bashed in every forum?
Seems like you have no shame at all.
Not sure who suppose to grow up.
First of all, you are the only one “bashing” me here.
Next, good that you know you are “bashing” me. That’s very nice of you and shows your wonderful behavior.
Seems like you are one of those “bashing” in hwz forum. So that makes it one less to 3 ppl who “bash” me in hwz? :)
First of all, you are the only one “bashing” me here.
Next, good that you know you are “bashing” me. That’s very nice of you and shows your wonderful behavior.
Seems like you are one of those “bashing” in hwz forum. So that makes it one less to 3 ppl who “bash” me in hwz? :)
First of all, Agent A has nothing holds against you.
All along, he was posting whatever new launches / condos updates here.
You need to be so nasty in your comments? You have no shame at all?
Get lost la. See your comments make me puke.
First of all, Agent A has nothing holds against you.
All along, he was posting whatever new launches / condos updates here.
You need to be so nasty in your comments? You have no shame at all?
Get lost la. See your comments make me puke.
Agent A and I are getting along better now.
Are you sure he is just posting updates here? He is urging all to buy now, calling new launches “undervalued” and whatever bs about time wait for no man. “Do opposite of what small girl and boy does” etc etc. I don’t follow this forum so much, there is probably more.
All in all, if you are just biased against me then you should get lost. Did you listen to him and buy garden at $1,700psf or WLR at $2,000psf? :)
Agent A and I are getting along better now.
Are you sure he is just posting updates here? He is urging all to buy now, calling new launches “undervalued” and whatever bs about time wait for no man. “Do opposite of what small girl and boy does” etc etc. I don’t follow this forum so much, there is probably more.
All in all, if you are just biased against me then you should get lost. Did you listen to him and buy garden at $1,700psf or WLR at $2,000psf? :)
I believe you are a grown up adult here.
Are you so easily persuaded by others to buy any property at any price?
Are you so retarded that you lost your judgement?
Agent A and I are getting along better now.
Are you sure he is just posting updates here? He is urging all to buy now, calling new launches “undervalued” and whatever bs about time wait for no man. “Do opposite of what small girl and boy does” etc etc. I don’t follow this forum so much, there is probably more.
All in all, if you are just biased against me then you should get lost. Did you listen to him and buy garden at $1,700psf or WLR at $2,000psf? :)
If you are in this forum long enough, you could have read my sharing on the land cost and the Developer profit.
If the government did not put the last control measure the price could be even more.
Those in the property market know you lost 12% or 15% before you even talk about the profit for 2nd or 3rd property.
If you are a first timer you already ahead of the 2nd or 3rd property investor and 20% ahead of the FT.
since 2006 if you are still on the Beach waiting to get on the Boat can only say work harder, looking back $108,000 let me buy 2 Condo value at 3 million.
I was the small Boy and the little girl before and I grow up old now hope everyone grows and not stay the same.
If you are in this forum long enough, you could have read my sharing on the land cost and the Developer profit.
If the government did not put the last control measure the price could be even more.
Those in the property market know you lost 12% or 15% before you even talk about the profit for 2nd or 3rd property.
If you are a first timer you already ahead of the 2nd or 3rd property investor and 20% ahead of the FT.
since 2006 if you are still on the Beach waiting to get on the Boat can only say work harder, looking back $108,000 let me buy 2 Condo value at 3 million.
I was the small Boy and the little girl before and I grow up old now hope everyone grows and not stay the same.
We have all profited handsomely from our purchases prior to 2010. However are you sure property will double again in the next 10 years? To me, it is not going to be the same again. Property is not going to continue being an easy route to making millions anymore.
I believe you are a grown up adult here.
Are you so easily persuaded by others to buy any property at any price?
Are you so retarded that you lost your judgement?
I have not but others have.
I have not but others have.
Stop assuming others are always dumb while you are always the smartest.
Those who are long enough here have more experience than you in property.
which sales will say their products not good? i see so many impulsive buyers after they got burnt, they will cry mother cry father, ask govt to pay for their loss...omg!
Stop assuming others are always dumb while you are always the smartest.
Those who are long enough here have more experience than you in property.
Cool down Ms Xan. If I do not step in, this forum will be too biased and newbies reading the threads will get misled.
Data has shown that there are many newbies / indecisive buyers who are over-reliant on agents who do sweet sales talk and claim "caveat emptor" when deal is done.
Buyers who come to forums probably want to read a fresh neutral perspective, not more salesmen talk...
Cool down Ms Xan. If I do not step in, this forum will be too biased and newbies reading the threads will get misled.
Data has shown that there are many newbies / indecisive buyers who are over-reliant on agents who do sweet sales talk and claim "caveat emptor" when deal is done.
Buyers who come to forums probably want to read a fresh neutral perspective, not more salesmen talk...
Have been in the forum since 2008 from skyscraper to condosingapore, you will be very lucky if you get any neutral perspective.
Better do your homework than to depends on the forum to gain insider info.
Newbies are well informed when they spend a bit of time to do research.
Happy to buy something after 1 year of hunting in the show flat, it just appreciates 3%.
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