REVISION 1
PLANNING ACT
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PHYSICAL CHARACTERISTICS
• Indivisible
All properties cannot
be divided and sold
partially
• Immobile
• Durable
• Heterogeneous
All properties are
different and unique
in their own way
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ECONOMIC CHARACTERISTICS
1.
2.
3.
4.
5.
6.
7.
8.
9.
commissions,
High transaction cost e.g. Agent
ABSD taxes
Illiquid
Long transaction time Takes time to sell
Short term supply inelastic
Subjected to government
intervention
Imperfect market
via rental income and
plus with inflation
Hedge against inflation yields,
got capital appreciation
platform to sell
No central market noandsingle
buy, anyone can sell
and buy
Data inefficiency
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REAL ESTATE INVESTMENT TRUSTS (REITS)
REITs are collective trust where there is
aggregation of funds to invest in a portfolio of
real estate assets, generating an income for the
unit holders.
- Affordability cheaper than buying the actual property
can sell easily in short time
- Liquidity
- Diversification
- Transparent and flexible
for making investments -> no tax on capital gains
- Tax benefits
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SUPPLY AND DEMAND
OF PROPERTIES
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SUPPLY & DEMAND OF REAL ESTATE
Supply Slopes upwards as quantity supplied will increase
as price increases.
Supply comes from sellers and developers. At higher
price, there will be more sellers in the market.
Demand Slopes downwards as price decreases, more
goods are being purchased.
Demand comes from buyers. As price decreases, there
will be more buyers.
Price: where demand and supply curves meet.
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In the short run, supply is inelastic as it takes times for
buildings to be constructed. In the long run, the supply
will be flatter.
Factors affecting supply of real estate are:
- Vacant development sites
o Government’s land sale programme
o Supply can change by increasing intensity of land, eg
higher plot ratio
- Existing stock of buildings/houses
o Fixed at any point in time
- New buildings
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Factors affecting demand
- Political
o stability
o policies such as the introduction of additional stamp
duty, relaxation of HDB policies will affect the demand.
- Social
o Population sizes, demographic shifts, lifestyle and
preferences/needs and tastes
- Economic
o Economic conditions, interest rates, employment
rate, GDP, inflation
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- Expansion (boom or peak) — sustained growth
in demand, increasing construction, speculators
enter market, high consumption, liberal banks,
and keen competition among the banks to court
= constant sustained growth in demand and supply, bank
big spenders Expansion
offer cheap mortgage loans, increased constructions or development of
new houses/real estate, high consumption
- Characterised by high transaction volume and
high prices
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- Decline — positive but falling demand.
Speculative developers enter the market,
more properties are built and supply
eventually exceeds demand.
Banks start to restrict loans, interest rates
gets higher, tighter credit supply ;
increasing vacancy
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- Recession (bottom or trough) — falling demand,
increasing vacancy, low rentals, high interest rates,
buyers difficulty in servicing loans, results in mortgagee
sale, may drag for a few years.
- Recovery (Upswing) — Improvement in economy,
confidence returns, interest rates lowered to encourage
buyers to enter market, resulting in increasing demand,
decreasing vacancy.
Increased volume of activity and prices will move
market into expansion again.
- The intensity and length of each phase depends on the
overall socio-economic climate.
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Question:
Which of the following macro factors will spur
demand for housing?
a)
b)
c)
d)
A low Sibor interest rate
A decrease in government land sales
Increased Seller’s Stamp Duty
Developer’s giving discount to buyers
Question:
Government’s
cooling
measures
are
implemented during ________ of the real
estate market.
a)
b)
c)
d)
The recover stage
The decline stage
The expansion stage
The recession stage
Question:
Real estate market starts to decline when
a) Supply exceeds demand
b) Bank starts to restrict loan
c) There is a tightening of loan policies
d) All off the above
LAND PLANNING IN SINGAPORE
The Urban Redevelopment Authority (URA) is
Singapore's
land
use
planning
and
conservation authority.
URA takes a long term and integrated
approach in land-use planning to optimise the
use of Singapore’s limited land in meeting the
current and future needs of the people.
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Concept Plan
The Concept Plan is a strategic land use and
transportation plan that provides the broad
directions to guide Singapore’s physical development
over the next 40–50 years.
It ensures that there is sufficient land to support
long-term population and economic growth, while
maintaining a good living environment.
The Concept Plan is reviewed every 10 years.
Source : URA
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Master Plan
The Master Plan is a statutory land-use-plan
that guides Singapore's developments in the
medium term over the next 10 to 15 years.
It is reviewed every five (5) years to ensure
that it is still in line with the national and
international situation.
The Master Plan shows the permissible landuse and density for developments in Singapore.
The latest Master Plan is the Master Plan 2019.
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PLANNING REGIONS
URA divides Singapore into 5 regions:
- Central
- West
- North
- North-East
- East
Location: Core Central Region (CCR), Rest of Central
Region(RCR), Outside Central Region(OCR).
Each region has a population size of more than 500,000 people
and provide a mix of commercial, business and recreational
areas. Each region will be served by a Regional Centre to
complement the activities in the Central Business District.
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5 regions
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PLANNING AREAS
- Planning Regions are divided into smaller
planning Areas.
- 55 Planning Areas
- Each Planning Area having a population of
about 150,000 and served by a town centre
and several neighbourhood
commercial/shopping centres.
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Number of Planning Areas within a Planning
Region ranges from 6 to 22 depending on the
distribution of population within the region.
Each Planning Area is further divided into
smaller subzones which are usually centred
around a focal point such as neighbourhood
centre or activity node. There can be more
than 10 subzones within a Planning Area.
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Sample of the
Master Plan
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WRITTEN STATEMENT
The Master Plan is to be read in conjunction with
the Written Statement of the Master Plan.
To interpret the land-uses in the Master Plan, one
can refer to the legend in the Master Plan to find
out the type of zoning for a specific land parcel.
For information on the uses allowed and examples
of developments, we can refer to the Master Plan
Written Statement Table 1 - Zoning Interpretation.
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https://www.ura.gov.sg/-/media/Corporate/Planning/MasterPlan/MP19writtenstatement.pdf?la=en
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Types of Residential
Properties
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Types of Residential Properties
1)
-
Landed (*Foreign ownership control)
*Good class bungalow (39 areas, min. 1400sqm)
*Bungalow (min. 400sqm)
*Semi-Detached (min. 200sqm)
*Terrace type I (min. 150sqm)
*Terrace type II (min. 80sqm)
*Strata landed i.e. strata-bungalow, strata-Semi-D, Strata
terrace, mixed strata.
- *Strata landed with high-rise condo approved on or after 3
Apr 2012.
- Strata landed with high-rise condo approved before 3 Apr
2012.
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Types of Residential Properties
2) Non- landed
- Private flats (min. 1000sqm)
- Condominium (min. 4000sqm)
3) HDB (public housing)
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Landed Housing
Areas Plan
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Landed Housing Areas Plan
The Landed Housing Areas Plan is drawn up to help
retain the character of landed housing estates. There
are 58 designated Landed Housing Areas.
From the Landed Housing Areas Plan, we can find out
the locations of these safeguarded estates and the
type and storey height of housing that can be built in
the estate.
Source: URA
https://www.ura.gov.sg/Corporate/E-Services/Planning
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No plot ratio. Means
reserved for landed
housing only
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Mixed Landed housing area where any form of landed housing such
as bungalows, semi-detached houses and terrace type I (occupying a
land area of 150 sqm) are permitted
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Can build 3-storey
houses only
Can build 2-storey
houses only
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Prevailing Planning
Controls for Landed
Housing
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Source: URA
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Strata-Landed
Properties
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Non-Landed
Residential
Properties
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Last updated on 5 July 2019
https://www.ura.gov.sg/Corporate/Guidelines/Development-Control/Residential/FlatsCondominiums/Site-Area
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Commercial
Properties
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Types of Commercial Properties
1) Commercial (Office / Retail)
2) Commercial with Residential
40
: 60
3) Residential with Commercial on 1st sty
The above can either be “Certificate of Title” or
“Subsidiary Strata Cert. of Title”.
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Industrial Properties
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Types of Industrial Properties
1) Business 1 (Light)
2) Business 2 (General)
The above can either be “Certificate of Title” or
“Subsidiary Strata Cert. of Title”.
Both have to fulfil 40:60.
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Planning (Use Classes)
Rules
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UNCLASSIFIED USES
UNCLASSIFIED USES
UNCLASSIFIED USES
CHANGE OF USE
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Planning Approval
Planning approval is required for the change
of use:
➢ From one Use Class to another Use Class; or
➢ From one Use Class to an Unclassified Use
and vice versa; or
➢ Between two Unclassified Uses.
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There is no need to apply for planning
approval from URA, if the change is from one
use to another use within the same Use Class;
unless there are special planning conditions
imposed for the sites.
URA takes about 2 weeks to process Change of
Use applications. If approved, a temporary
change of use shall be granted up to a maximum
of 3 years.
Source: URA
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What do I have to apply for change of use?
The businessperson will have to apply for
planning permission before carrying out the
change of use when:
• He proposes to change the use of a premises
from one Use Class to another, or
• It involves a use that does not fall within any
Use Class.
Source: URA
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How to check the approved use of the
premises
• The buyer/tenant may ask the property
owner for a copy of the Grant of Written
Permission from URA, which states the
approved use of the premises.
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• Alternatively, buyer/tenant can use our
online development register to download the
Grant of Written Permission, if the premises
has been granted approval for a specific use.
Downloading of the decision is free.
However, planning decisions given before the
year 2000 may not be available online.
• For such cases, buyer/tenant should make an
enquiry with URA. There is a search fee of
$53.50 (inclusive of GST).
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Who should apply for change of use?
Owner or tenant?
Either the owner, the tenant or their
appointed agents may apply for the change of
use.
If the tenant or the appointed agent submits
the application, he/she must obtain the owner's
prior consent in writing. The applicant has to
declare that the owner's consent has been
obtained in the application form.
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Question:
A seller appoints Mary as agent to sell his residential
unit in a high-rise development, which is the following
is true?
a) Mary should advertise ‘condominium for sale’
because the land size of the project is 5000sqm
b) Mary should advertise ‘condo for sale’ because it is
high-rise
c) Mary should advertise ‘condo for sale’ because the
unit has a subsidiary Strata Certificate of Title
d) Mary should advertise ‘apartment for sale’ because
this estate have limited facilities
REVISION 2
LAND LAW
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LAND LAW
In Singapore, all land is held by the state; as such,
land is not the subject of absolute ownership but
of tenure. The state in turn issues various grants or
leases of the land. These grants and leases are
more commonly known as estates and typically
comprise freehold estates, leasehold estates and
estates in perpetuity. Each estate is reflective of
the duration of the owner's interest in the land.
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LAND LAW
Land law deals with the rights to use, alienate
(transfer ownership) or exclude others from land.
In Singapore, land law applicable are derived from:
- English common law / civil law
- Statute Law based on local legislations
- Equity
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REAL PROPERTY
Real property is a legal term which
consists of land and anything
annexed to land on a permanent,
immoveable nature. Real property
is either corporeal or incorporeal.
Example: land, building, fixtures
HEREDITAMENTS
Any kinds of property that can be inherited.
There are 2 types of hereditaments :
• Corporeal hereditaments: tangible property,
that is, can see and touch, like a house.
• Incorporeal hereditaments: intangible
property, that is, cannot be seen nor handled,
like rights, interests, easement (right of one
individual to use another's property) and airspace.
Real Property:
Corporeal Hereditaments
• Land (incl. airspace, subterranean up to 30m)
• Structures/ Fixtures
• Vegetation
Incorporeal Hereditaments
• Interest (co-ownership, Estate)
- Legal or equitable
- e.g. Lease, easement, ownership, mortgagee
• Rights (to do something)
- Legal or personal
Air-space
(There is no exact
measurement for
this air space)
Land
(includes surface area)
Underground or
Subterranean space
(up to 30 metres depth
Singapore Height Datum)
Trespass to land means entering
or remaining in or on another
person’s property, without
permission.
Overhanging
branches cross
the air-space
boundary of Plot B.
Therefore, it is
trespass.
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FIXTURES & CHATTELS
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FIXTURES
• Fixtures are things that were originally
chattels, but which have become part of
the land or building to which they are
attached to.
• Although the expression of “Fixture &
Fittings” are often found in contracts, the
word “fittings” has no status as legal
expression, this could refer to chattels.
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FIXTURES
Example:
• Kitchen cabinet, including fitted sinks,
oven, fridge etc
• Sanitary fittings
• Built-in wardrobe
• Aircon
• Carpentry works
e.g. toilet bowl, basins
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CHATTELS
Chattels: are personal property. They are
to be freely removed by the sellers.
The chattel can become a fixture
depending on how it is fixed onto the real
property. Otherwise the chattel remains as
either personal property or fittings to the
property.
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CHATTELS
Example:
• Carpet
• Curtains
• Chandelier lights
• White goods standing on its own weight
• Furniture
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CHATTELS
The annexation test
The courts have developed two tests in order to
determine whether an item of property is a
fixture or a chattel.
These are known as:
(1) The degree of annexation test; and
(2) The purpose of annexation test.
The annexation test
• If the items is intended to be permanent and
to afford a lasting improvement to the
building, the thing will have become a fixture.
• If the attachment is temporary and is no more
than necessary for the item to be used and
enjoyed, then it will remain a chattel.
The annexation test
• For example, if the item is ornamental and the
attachment is simply to enable the item to be
displayed and enjoyed as an adornment that
will often indicate that this item is a chattel.
• The ability to remove an item or its
attachment from the building without
damaging the building is another indicator.
(1) Degree of annexation test
According to the degree of annexation test, an
article is a fixture if it is attached to land or a
building in a substantial manner, such as by
nails or screws.
The more firmly or irreversibly the object is
affixed to the earth or a building, the more likely
it is to be classified as a fixture. There must be a
physical connection with the land or with
something that is part of the land and object.
Assumptions made when determining the
degree:
- An item is presumed not to be a fixture if it is
resting on its own weight and the person who
asserts that it is a fixture, is obliged to prove it
- An item is presumed to be a fixture if it is
attached to the land to any extent and the
person who asserts that it is not a fixture, is
obliged to prove it.
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2. Purpose of annexation test
The second test is the purpose of annexation
test. The purpose of annexation overrides the
degree of annexation.
Is the purpose of annexation for the
enhancement of the value of land; where the
purpose of the attachment is to increase the
value of the land, then the item would cease to
be a chattel, and thus become a fixture.
2. Purpose of annexation test
THE RIGHT TO FIXTURES AS BETWEEN
LANDLORD AND TENANT
The general rule is that a chattel always
remains the tenant’s property and is
removable by him at the end of the tenancy,
whereas a fixture is the property of the
landlord and the tenant has no right of
removal, except for trade fixtures and
ornamental fixtures.
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Domestic and ornamental fixtures are objects
that a tenant has affixed to the land for the
purpose to render it more habitable. Stoves,
shelves, and lighting equipment are types of
domestic fixtures.
Ornamental fixtures include curtains, blinds,
and beds fastened to walls.
The tenant is allowed to remove any ornament
and domestic fixtures, provided that there is no
substantial injury to the landlord’s premises.
Trade fixtures are those items which have been
affixed to the real property for the purpose of
carrying on a particular trade.
They include those items that merchants annex
to the premises to facilitate the storage,
handling, and display of their stock, such as
booths, bars, display cases and lights.
The tenant is allowed to remove all trade
fixtures at the end of the lease of the premises.
Question:
Which of the following about ‘fittings’ is
correct?
a) Any fittings left behind in the property must
be sold with property
b) A fitting is an immoveable property
c) A fitting can be a chattel if it is standing on its
own weight
d) A fitting fixed permanently on property for
purpose of trade can be removed by the
tenant
Interest In Land
INTERESTS IN LAND
Interest refers to the extent of a person's or
entity's rights in property.
It deals with:
- Type of ownership
- Estate (time period of ownership)
There are legal and equitable interest.
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LEGAL INTEREST
• Having a legal interest, or legal title, means that
a person owns the particular property in law. It
usually also means that the legal owner’s name
is registered on a certificate of ownership, or a
register of that particular property.
• A right in or over land.
• Enforceable against the whole world
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EQUITABLE INTEREST
An equitable interest is an interest held by virtue of
an equitable title (i.e. sales and purchase agreement)
that gives the rights to acquire formal legal title or
claim on reasonable grounds. It is recognized and
enforceable by the Court in equity.
Equitable right is only good against certain people. It
is defeated by the Bona Fide Purchaser for value,
who bought without notice of the equitable rights.
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WHO IS A BONA FIDE PURCHASER?
• Innocent purchaser who bought the house for value
• Without notice of the equitable interest
of any other party’s claims
• As long as a bona fide purchaser properly records
the transaction, he takes good title to the property
despite competing claims
• Those parties holding competing adverse claims
may bring actions only against party who
fraudulently transfers the property to the bone fide
purchaser.
Jane sells her house
to Betty for $800,000.
Betty pays 5%
deposit. Betty now
has an equitable
interest in the house.
Jane,
Betty
(owner,
has legal
interest in
the house)
(buyer,
has equitable
interest in
the house)
One week later, Jane
sells her same house a
2nd time, this time to
Jack, who bought it for
value, without notice of
the previous sale to
Betty.
Jane
Betty
In the example, Betty has an equitable interest
(a right which binds a particular individual, namely
Jane).
In the event that that Jane (legal owner) should deal
with the property to the detriment of the interest held
by Betty (the equitable holder), then Betty can bring a
legal claim against her.
However, where the house is sold, to a bona fide
buyer (Jack) with no knowledge of the interest of the
equitable owner (Betty), then, Betty will have no claim
against that Jack.
Rights In Land
Rights
Refers to the rights to do something, i.e. rights of
possession, rights of enjoyment/ use, rights of
disposition, rights to exclude.
There are legal (proprietary) rights and personal
rights.
Proprietary/ Legal Rights
Rights that are enforceable against the whole
world at large. It follows a thing, rather than a
particular person, i.e. rights of possession, rights
of disposition. This is also known as Proprietary
Rights or “Rights in Rem”.
Jane leases her
house to Betty at
$2,000 per month
for 2 years.
This is a LEASE
arrangement.
Jane
Betty
The lease is binding on Jack.
He cannot revoke the
lease upon taking ownership of
the house because Betty has a
legal right in the house.
sells
house
Jack
Leases her house to Betty
Jane
Betty
Personal Rights
Rights that are enforceable against a limited
number of specific persons. Personal rights
follow a ‘person’ rather than a thing, hence does
not run with land. This is known as a ‘rights in
personam’.
For example: Licence to occupy land, sellers’ or
buyers’ rights against the other party for a
breach of contract.
Jane gives permission
(licence) to Betty to park
her car on Jane’s
property.
The licence is a personal
relationship between the
Jane and Betty.
Jane
Betty
sells
house
Jack
The licence does not bind
Jack. He can revoke the licence
immediately upon taking
ownership of the house
because
Betty has only a personal
right on the land.
Grants licence to Betty to park her car
Jane
Betty
ESTATES
IN LAND
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TENURE AND ESTATE IN LAND
Estate: Duration of ownership
Tenure: Conditions and terms of
ownership.
2 types of land tenure:
(i) Freehold
(ii) Leasehold
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FREEHOLD LAND
In order to be categorized as a freehold, an
estate must possess the characteristics of
- Immobility – land/property
- indeterminate duration – owns land ‘forever’
(unless the Singapore Government overrides it
by compulsorily acquiring it)
2 Types of freehold land:
- Estate in Fee Simple/ Grant in Fee Simple
- Estate in perpetuity
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ESTATE IN FEE SIMPLE
Also known as Grant In Fee Simple.
A fee simple represents absolute ownership of land,
and therefore the owner owns everything on the
land subject to covenants.
It is the highest type of interest in real estate
recognized by law.
Fee Simple Estates are still subject to taxation,
compulsory land acquisition by the State, rule of
easement andCopyright
restrictive
covenant
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ESTATE IN FEE SIMPLE
In general, smaller estates or interests may be
carved out of larger estates e.g. the owner of
an estate in fee simple may grant a lease of 99
years to a lessee.
However, the creation of some estates or
interests may require prior written approval
from the relevant authority e.g. subdivision
approval under the Planning Act is required
for the creation of certain leases.
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Estate in Perpetuity
An estate in perpetuity (a statutory rather than a common
law estate) is of unlimited duration like the estate in fee
simple. However, such estates are subject to a number of
covenants and conditions e.g. the payment of any
applicable rent.
Also known as Statutory Land Grant (SLG). It is a statutory
grant subjected to conditions in State Lands Act.
Pursuant to the SLA, every grant of land granted before 1
March 1961 shall be deemed to confer an estate in
perpetuity on the grantee.
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LEASEHOLD LAND
Duration of ownership is definite (fixed) and
they are subject to covenants and terms of
the lease.
-
9999 years, 999 years (private leases)
99 years
60 years
30 years
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STRATA TITLE
- Provides for the vertical or horizontal subdivision
of land into lots, can be leasehold or freehold.
- A development or building may be subdivided into
strata units that are capable of being separately
owned (by subsidiary proprietors) as well as
common areas called common property that are
used together with other subsidiary proprietors.
- A strata unit is in effect a defined space that may
be below, on or above the surface of the land that
is marked out on a strata title plan.
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Strata titles are conferred upon:
o Condominium
o Residential flats
o Townhouse;
o cluster housing;
o strata-bungalow;
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o strata flatted factories (Midview City);
o strata flatted warehouse (Midview
City);
o Strata office building (e.g. Suntec City);
o strata retail (e.g. Far East
Plaza, Lucky Plaza, Orchard Plaza);
o any combination of office (e.g. Textile
Centre, International Plaza),
o shopping and residential flats that are
strata-titled (e.g. NorthPoint City).
.
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SHARE VALUE PLAN
Under Part IV of the Building Maintenance and
Strata Management Act (No.47 of 2004), the
developer shall not sell any lot in the
development unless a schedule of strata units or
an amended schedule of strata units showing
the proposed share values to be allotted to the
lot or proposed lot has been filed with and
accepted by the Commissioner of Buildings
SHARE VALUE ALLOCATION
:
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SHARE VALUE PLAN
Submitted by developers to the Chief Surveyor
for approval under the Boundaries and Survey
Maps Act.
Schedule of Entitlement indicates the share
values for each strata lot.
The Registrar of Titles will rely on the share value
stated in the Schedule of Entitlement to issue the
SSCTs.
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STRATA TITLE PLAN
A Management Corporation Strata Title (MCST) for a
strata development is constituted when the strata title
plan for the development is lodged with the Chief
Surveyor and a strata title application is made to the
Registrar of Titles, Singapore Land Authority (SLA).
Each management corporation (MC) is assigned a
unique strata title plan number. The MC, in respect of
a strata title plan, is composed of the subsidiary
proprietors (SPs) within the specific strata title plan.
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SUBSIDIARY STRATA CERTIFICATE OF
TITLE (SSCT)
Subsidiary Strata Certificates of Title
(SSCT) are issued for units in a building
or development which is strata
subdivided.
This enables the transfer of the legal
titles for the strata units.
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Question: When to apply for SSCT?
Answer : (a) When a development with 3 or
more strata units is completed up to roof
level and strata subdivision approval has been
granted by Chief Planner, URA.
(b) When subdivision approval for a strata
lot is granted by Chief Planner, URA e.g. when
an office strata lot is subdivided to form 2 new
office strata lots.
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(c) When planning permission is granted by
Chief Planner, URA for amalgamation of strata
lots e.g. when 2 existing office strata lots are
amalgamated as one large strata lot.
(d) When owners of flats built before the
operation of the Land Titles (Strata) Act with
leases registered under the Registration of
Deeds Act or Land Titles Act apply to convert
their leases to strata titles.
Question:
The State grants land to HDB to develop public flats
for sale to eligible Singaporeans for a 99-year lease
term. Which of the following sentence is the most
appropriate to describe the flat owner’s interest?
a) The flat owner enjoys a state lease of 99 years on
land.
b) The flat owner enjoys a leasehold estate of the flat
for 99 years with no interest in land
c) The flat owner enjoys freehold estate as the state
land is of freehold tenure
d) The flat owner enjoys freehold estate while HDB
owns the land on fee simple
Question:
A management corporation is
a) A body of owners with a legal entity which
can sue or be sued
b) Established when a strata title plan is
registered
c) Responsible for managing and maintaining
the common property
d) All of the above
Law relating
to
co-ownership
in land
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CO-OWNERSHIP OF LAND
Two or more people may share ownership
of a property.
There are two different ways to share:
i. Joint-Tenancy
ii. Tenancy-in-common
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JOINT-TENANCY
Joint-tenancy arises where land is transferred to two (2)
or more persons, without indication that they are to
take distinct shares.
1) Rights of Survivorship
2) Overrides Will
3) Equal shares
4) 4 unities
- Possession
- Title
- Interest
- Time
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➢ The existence of the 4 Unities:
•
1. Unity of Possession: Possession of the
land is vested in all the joint tenants, and
none of them holds any part of it to the
exclusion of the others.
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2. Unity of Interest: The interest of each is
the same in quantity;
in practice, the rents and profits of the
lands divided equally between the joint
tenants and that there can be no joint
tenancy between persons of different
interest.
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- 3. Unity of Title: All the joint tenants
together constitute a single tenant and
each derives his title from the same act or
instrument.
- 4. Unity of Time: All the joint tenants
acquired the land and the interest in it at
the same time.
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Joint-tenancy is a common mode of coownership between married couples or
close relatives. Neither of the 2 persons
can dispose of their interest by will and on
the death of either one, the survivor takes
all.
Joint tenancy can be severed (cut or
split) and converted to a tenancy-incommon by an instrument of declaration.
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TERMINATION OF JOINT TENANCY
1. By alienation: which means by selling
away one’s share making the joint tenancy
a sole ownership or tenancy-in-common.
E.g. One of the co-owners need money,
sells his share to his other joint tenant,
such that the it’s now owned by one
owner, sole ownership.
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2. By partitioning by mutual agreement:
means breaking the joint tenancy by way
mutual agreement. of
Sometimes husband and wife in order to
prevent the other party from being
implicated in a law suit, may partition the
joint tenancy of their assets into tenancyin-common so that the spouse can be
spared the joint liabilities.
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3. By partitioning via court order: e.g in
divorce where the court will instruct the
divorced couple to dispose of the martial
home and split the sale proceeds according
to a certain apportionment by percentage.
This effectively breaks up the joint
tenancy into ownership by percentage
shares.
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TENANCY-IN-COMMON
Tenancy-in-common is concurrent ownership of a
property by two (2) or more persons, each having a
clear and undivided share in the property.
1) No rights of survivorship
2) Clear, distinct share
3) Equal or unequal shares
4) Free to will to third parties
5) Unity of Possession
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Situations in which a tenancy-in-common
arises are:
1. Where land is transferred to two or more
persons with "words of severance" i.e. words
importing distinctness of interest showing
intention to hold separate or equal shares in the
land
2. Where the law provides, e.g. the common
property of a strata-titled building is held by
subsidiary proprietors as tenants in common.
3. Where one joint-tenant alienates
(transfers) his interest to a stranger,
e.g. by selling it,
the stranger holds the interest as a tenantin-common, with the remaining joint
tenants who, however, as among
themselves, remain joint tenants.
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Question:
Wife and husband owns the property under
joint tenancy. Husband wants to transfer his
share to his son, he has to pay ____ as stamp
duty.
a) 0% because gift within family is exempted
b) 50% of full stamp duty
c) 100% of full stamp duty
d) Pay only if son is above 21 years old
Law
relating
to
Mortgage
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MORTGAGE
A mortgage occurs when an owner (mortgagor)
pledges his or her interest (right to the property)
as security or collateral to a financial institution
(mortgagee) for a loan.
- Mortgage is a form of interest.
- Mortgagor (borrower) assigns the interest to
the mortgagee (lender) in exchange for the
sum borrowed.
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Source: WongPartnership LLP
Legal
mortgage
Equitable
mortgage
When a property is sold, the money received
are discharged in the following order:
1. Payment for all costs and expenses incidental
to the sale #1 Pay agent commissions etc. first
2. Discharge of mortgage money, interest and
costs secured by mortgage #2 Settle mortgage
3. Refund of CPF + accrued interest
#3 Settle CPF + accrued interest
4. Payment of subsequent mortgages and
charges (if any) in order of their priority
#4 Settle remaining mortgages
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RIGHTS OF THE MORTGAGOR (BORROWER)
- Right of Redemption or Equity of Redemption:
Entitles the mortgagor to call for the re-transfer
ownership to the mortgagor when the secured debt
is satisfied
- Right to sell the property: Mortgagor can sell the property
subject to clearing the outstanding mortgage. i.e. the selling
price must sufficient to discharge the mortgage.
- Right to grant lease not exceeding 3 years for each term.
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RIGHTS OF THE MORTGAGEE (LENDER)
When the mortgagor defaults in loan-repayment, the
mortgagee (bank, financial institute) has the following rights:
- Entry into Possession
- Power of sale: Provided notice given and the
mortgagor fails to pay up after 3 months from
notice
- Foreclosure (the action of taking possession of a
mortgaged property, when the mortgagor fails to keep up
their mortgage payments)
- Right to grant an occupational lease
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Question:
Peter took a mortgage from bank and rented the property
for 2 years. He passed away after a year and wrote in his
will that the property will be inherited by his son when he
turns 21 years old and his wife will be trustee in the
meantime. His wife defaults in payment. What will
happen?
a) Son will still inherit the property when he turns 21 years
old
b) Peter’s Will can become unenforceable
c) The bank has rights to foreclose and take possession,
ending son and wife’s interest
d) The bank will take possession but the son still has
reversionary interest
Law relating
to Future
Interest in
land
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FUTURE INTEREST
Future interest is a legal right to property
ownership that does not include the right to
present possession or enjoyment of the
property.
There are various forms of future interest:
- Reversionary Interest
- Remainder Interest
- Succession
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REVERSIONARY INTEREST
Types of reversionary interest:
Developer bought condominium land and was
granted 99-year lease. After 99-year lease is up,
the land shall return to the state.
The state (URA) has reversionary interest to the
land.
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REVERSIONARY INTEREST
Types of reversionary interest:
Landlord grants three-years lease to tenant. After
lease expires, the tenant has no more interest.
The landlord has reversionary interest to the
property.
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REVERSIONARY INTEREST
Types of reversionary interest:
Mortgagor transfers interest to mortgagee to secure
financing.
The mortgagor has reversionary interest to the
property.
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REVERSIONARY INTEREST
Types of reversionary interest:
Life Estate:
Designate the ownership of land for the duration of a
person's life. Interest in real property ends at death of
the life tenant.
The original owner has reversionary interest to the
property.
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REMAINDER INTEREST
For example, Doreen dies and in her will leaves her
husband, Alf, a life interest in Rose Cottage. The will
provides that, on Alf's death, Rose Cottage is to pass to
Doreen's son, Cedric, outright.
Cedric has a remainder interest in Rose cottage - taking
possession only when Alf dies.
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REMAINDER INTEREST
Alf is said to hold life interest of the life estate and
Cedric holds the remainder interest.
Cedric is the ‘remainderman’ and will only become its
possessor in the future, after Alf’s death.
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Question:
A freehold estate was left to Alan for life, with remainder to Billy
for life, remainder to Johnny in fee simple. However, Alan is
already 80 years old and the 56-year old Billy is suffering from
terminal illness. Johnny is a 10-month old baby. Which of the
following statement is correct?
a) Life estate is a form of concurrent co-ownership
b) Both Alan and Billy has the same life interest in possession
c) Johnny’s interest will cease upon the death of Billy before Alan
as the succession would have been broken
d) A trustee would have been identified to hold the legal estate in
the property for the benefit of the 10-month old baby in the
even that the previous interests passed on before the baby
reaches legal age.
Question:
Which of the following is a future interest in land?
A)
B)
C)
D)
Billy holding a life interest
Mary holds a fee simple interest
Landlord grants tenancy agreement to tenant
Owner buys insurance for land
REVISION 3
STATUTORY RIGHTS
IN LAND
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IMPLIED COVENANTS AND
CONDITIONS
Under the State Lands Act, State land
is granted or leased on special
covenants and conditions.
The special covenants and conditions
are endorsed and inserted in the titles.
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IMPLIED CONDITIONS
State:
- has the right to enter the land and to search
for and take any mineral oil which can be
found, and paying the grantee or lessee of
the land for any damages.
- Owner or occupier of any land adjacent to the
land has a right of way from his land to the
nearest public road
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- Any land issued before 1st March 1961 is
conferred an estate in perpetuity on the grantee
- A royalty of 10% of the gross produce of all
mines and minerals other than laterite found
in the land
- Earth, clay, gravel, sand and stone and other
materials which may be required for the roads,
public buildings or other public purposes may
be taken or removed from the land.
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- Officers of the government and their workmen can
have free access to the land for the purpose of making
drains and sewers, and laying down water pipes,
electric and telegraph wires, and other underground
communications, and using, repairing and maintaining
them
- Collector of Land Revenue and any officer authorised
shall have free access to the land.
- In case of breach of implied covenants other than for
the payment of rent and maintenance of landmarks,
Collector of Land Revenue can re-enter the land and
forfeit the land.
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STATE RESTRICTIVE
COVENANTS
RESTRICTIVE COVENANT
A restrictive covenant is a negative covenant respecting
the use (or ‘non-use’) of land. A restrictive covenant is
created expressly; it does not arise by implication or by
prescription.
There are restrictive covenants that are imposed by the
state (by policies) and as well as between parties (by
contract).
Lifting of State Restrictive Covenants
Many years later, the land has been re-zoned,
from agricultural to residential land, under the
Revised Master Plan.
Based on this revised land-use, the land owner
plans to develop houses on the plot of land.
However, he cannot do so, because of the
“Restrictive Covenants” on the land.
In order to lift the State Restrictive Covenant,
the landowner need to pay to the State, a sum
of money known as differential premium.
State
Restrictive
Covenant
Baseline
Ceiling
Question:
Peter bought an old landed residential house
demolished for reconstruction with the
intention to increase gross floor area. Which of
the following is chargeable?
a)
b)
c)
d)
Differential premium
Development charge
Both are chargeable
None is chargeable
SALE OF
REMNANT LAND
Sale of Remnant Land
Remnant Land are State land which are
incapable of independent development by
virtue of their small size or irregular shape.
The premium (money) payable for remnant land
is generally based on 50% of the full land value.
This is determined by applying the factor of 5/7
to the applicable Development Charge (DC) rate.
Remnant land plot size
TEMPORARY
OCCUPATION LICENCE
(TOL)
TEMPORARY OCCUPATION LICENCE (TOL)
Singapore Land Authority (SLA) rents out vacant State
lands through Temporary Occupation Licenses (TOLs).
The TOL issued can be renewable on a monthly or
yearly basis depending on the use.
Where the use of State land is for a one-off event and
for a fixed duration of not more than 3 months, a NonRenewable Temporary Occupation License (NRTOL)
will be issued instead.
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LAND ACQUISITION
ACT
LAND ACQUISITION ACT
Compulsory acquisition of private land (either
leasehold or freehold) by the State in Singapore is
governed by the Land Acquisition Act.
The President may, by notification published in
the Gazette, declare the land to be required for the
purpose specified in the notification.
On 7 May 2007, the Land Acquisition Act (LAA) was
amended to pay market value compensation for land
acquired as at the date of its acquisition (gazette).
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The Land Acquisition Act is also amended so that when
assessing the market value of acquired land, it will no
longer be prohibited to take into account any increase
in value arising from any improvement to the land
within 2 years before the date the land is declared to
be required for a public purpose.
However, no account is to be taken of any potential
value of the land for any other use more intensive than
what is permissible by or under the Planning Act as at
the date of its acquisition.
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REVISION 4
OTHERS’ RIGHTS IN
LAND
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ENCUMBRANCES
A claim against, limitation on, or liability against real
estate is an encumbrance. Encumbrances include
liens,
restrictive
covenants,
easements,
encroachments, and licenses.
An encumbrance can restrict the owner's ability to
transfer title to the property or lessen its value. It
represents some right or claim of another to a
portion of the property or the use of the property
and will show up in an abstract of title.
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1. Licence
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BARE LICENCE
• Licence not supported by any contract or consideration
• Purely personal permission to be present on someone’s land.
Eg invitation to dinner.
• Conveys or carries no proprietary interest at all
• Can be created orally or in writing
• A bare licence, because it is purely a personal licence, can be
terminated by licensor at will. However, to be fair, the licensor
must give the licensee reasonable notice to quit the premises.
• He has no right to assign; it is personal to him and it does not
bind assignees of the licensor
Bare licence
Jane gives permission to
Betty to park her car on
Jane’s property, free-ofcharge.
This is a licence
arrangement.
Jane
Betty
A bare licence is revocable by the licensor
and does not bind a third party. A license
is not assignable.
2. Contractual licences: Licence for specified
period cannot be revoked until contractual
period has expired. A contractual licence is
terminable upon the end of a fixed term,
without any requirement of notice
• Granted by contract (valuable consideration)
Short term licences:
• Entry to cinema, football match, car park by
purchase.
Long term licences:
▪ Occupy hotel room, house/flat/shop
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3. Estoppel licence
For example, Anthony
orally (by word of mouth)
promises Betty that Betty can
use Anthony’s land as a short
cut.
Relying on this promise,
Betty spends money
improving
access
to
Anthony’s land.
In this case, an estoppel licence has been
created by the oral promise of Anthony.
Therefore, Anthony cannot go back on his
words because Betty can go to the Court
to compel Anthony to give effect to the
licence, for such period as the Court
orders.
Anthony is ‘estopped’ (prevented) from
going against his word of promise.
Key takeaway:
1) Land owner makes a representation,
or create an impression that the
claimant has some rights or interest in
land and
2) The claimant acted based on that
reliance and
3) Suffered detriment
Licence coupled with a grant
• Arises in rather specialized context, usually when one is given a
right to enter somebody’s land with the purpose of extracting
something from the land.
• Linked to a grant of property, a profit a prendre, ie a right to take
from another person's land something that is part of the soil or is
on the soil and is the property of the landowner.
• e.g. when the owner of the land grants A the right to cut the
timber growing on the land, he must also give A a licence to enter
the land for the purpose
• Common law rule is that a licence coupled with the grant of an
interest, a profit a prendre, is irrevocable for so long as the interest
exists.
• Licence cannot be arbitrarily terminated by licensor.
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2. Easement
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EASEMENT
An easement is legal right and interest in another’s land
that entitles the holder the right to use the land in a
specified manner, without possessing it.
An easement appurtenant is a covenant running with the
land since it is incapable of a separate and independent
existence from the land to which it is annexed.
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ESSENTIAL CHARACTERISTICS
OF AN EASEMENT
1. The dominant and servient owners must be different
persons.
2. At least two parties:
• Dominant tenement: easement-holder, enjoys the
benefits
• Servient tenement: the land to which is subject to the
burden (encumbrances) of an easement
3. The easement must benefit the dominant tenement.
4. The ‘easement right’ claimed must be capable of
forming the subject-matter
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4 TYPES OF EASEMENTS
1)
2)
3)
4)
Right of way
Right of view
Right of light
Right of support
1. RIGHT OF WAY
Future Owner
Future Owner
2. RIGHT OF LIGHT
Parcel A
Parcel B
(Dominant
tenement)
(Servient
tenement)
3. RIGHT OF VIEW
Parcel A
View
(Dominant
tenement)
Parcel B
(Servient
tenement)
Sea View
Right of support of
Party Wall
House A
House B
4. RIGHT OF SUPPORT
Right of support of
Party Wall
House A
House B
CREATION OF EASEMENTS
There are a few ways that easements are created:
1.
2.
3.
4.
Express easement
Implied easement
Easement by necessity
Easement by prescription
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1. Express easement
Easements are most often created by express language
in binding documents (deed).
A grant of an easement is when someone has
sold the land with the benefit of the easement and a
reservation is when the owner has sold the burdened
part of the land and retained the benefited land.
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Registration necessary
for creation of easements
Under the Land Titles Act (Section 97), it states:
“where an easement is intended to be created,
the proprietor may execute an instrument of
grant in the approved form, or, if the easement
is being created incidentally to a transfer or
lease, by appropriate words in the transfer or
lease”.
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Easements to pass on transfer without express mention
101.—(1) Upon registration of a transfer or lease of land to which an
easement is appurtenant, the easement shall pass to the transferee or lessee
without any express mention in the transfer or lease.
(2) Where a transfer of part of a dominant tenement contains an express
agreement that the easement shall not pass to the transferee, registration of the
transfer shall operate to release the easement to the extent to which it had been
appurtenant to the part transferred.
(3) Except as provided in subsection (2), an easement, so long as it subsists,
shall continue to be appurtenant to every part of the dominant tenement
notwithstanding severance.
2. Implied easement
Even when no document or agreement has created an
express easement, an easement right may still be implied
(understood) in certain situations or circumstances, i.e.
by legislations.
Implied easements under Land Titles Act and Land Titles
(Strata) Act:
(i) Easement for passage of water, electricity,
gas, sewerage, drainage and other services
for development
(ii) Implied easements for right of way and
other rights shown in subdivision plan.
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3. Easement by necessity
Necessity occurs when the land cannot be used
at all without a grant, it is landlocked.
Where a land is physically unable to reach a public
road, an easement by necessity may be created.
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4. Easement by Prescription
A right to use property, acquired by a long
tradition of open and obvious use accrued
with time, i.e. 20 years.
For example, if hikers have been using a
trail through your backyard for twenty
years and you’ve never complained, they
acquire an easement by prescription
through your yard to the trail.
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Hikers have been using a trail through
John’s land for 20 years without any
objections and interruptions from John,
acquire an easement by prescription
through John’s land to the trail.
Road
Hiking Park John’s Land
TERMINATION OF EASEMENTS
A party claiming termination should show one or
more of the following factors:
1. Release
2. Merger
3. Necessity
4. Prescription
5. Abandonment
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1. Release
Agreement to terminate by the grantor and
the grantee of the easement.
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2. Merger
When one owner gains title to both dominant
and servient tenement.
Parcel A
(Jack)
Parcel B
(Jill)
(Dominant
(Servient
tenement)
tenement)
Jack buys over Jill’s land.
As a result, easement is terminated by merger
3. Necessity
If an easement is created by necessity and
the necessity no longer exist, for example,
due to the construction of a new access
road by the Government, then the
easement ends along with the necessity.
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4. Prescription
Just as an easement can be created by prescription,
an easement can also be terminated by
prescription.
If the owner of the servient tenement excludes the
easement-holder from the usage of the easement,
by fencing up the area and this fence stays up for 20
years and the easement-holder brings no legal
action to enforce his easement, his easement could
be lost by prescription.
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Fence
And now, John builds a fence on his land to
exclude the easement-holder from the usage of
the easement..
If this fence stays up for 20 years and the
easement-holder does not bring any legal action
to enforce his easement, then his easement is
lost by prescription.
Road
Hiking Park John’s
x
x
x
x
Land xx
x
x
x
5. Abandonment
This is usually claimed where the easement
has not been used or enjoyed for a
significant length of time.
Under the Land Titles Act, an easement can
be removed if the period exceeds 12 years
of non-usage.
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Question:
Which of the following is not a real property?
a)
b)
c)
d)
Tree
Overhead bridge
Developer’s show flat
Easement
Question:
An easement refers to:
a) An owner of a land benefiting from an
adjoining land owned by another person
b) The right of an owner of dominant tenement
over a servient tenement
c) An intangible right but without physical
possession over an adjoining land
d) All of the above
3. Covenant
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COVENANT
Covenant: A legal agreement made
between 2 parties that is contained in
a deed.
Covenantor: Person making the promise.
Covenantee: Person to whom the promise
is made
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Positive or affirmative covenant
A positive covenant requires some form of action to be
taken e.g. to erect a fence along a boundary. Positive
covenants are generally a contract between the original
parties to the deed imposing the covenant and do not
bind future land owners.
However it should be noted that future owners of the
land which has the benefit of a positive covenant can
enforce the covenant against the original owner of the
land that has the burden of the covenant.
Positive covenants may be passed on with land if it
Touches and concerns land and if there is privity of
estate.
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Restrictive covenant or negative covenant
A restrictive covenant limits or prevents the
use of land in a specified way to the benefit of
other land. Restrictive covenants are said to run
with the land.
This means that the benefit and
burden of the covenant relates to land itself
and not to the land owner. If one of the original
parties to the restrictive covenant sells their
property, the covenant may remain enforceable.
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Restrictive covenant or negative covenant
• The covenant imposed on one parcel of land
must actually benefit the other land by
protecting its value or enjoyment at the
current time (not just at the time the
covenant was created)
• If the other land does not actually benefit
from the covenant it will not be enforceable.
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Restrictive covenant or negative covenant
• The original parties to the covenant must have
intended that the burden of the covenant would
remain with, and pass with the land every time the
ownership changed.
• This can only happen if the covenant was
expressed to benefit adjoining land. If there is no
express intention to benefit the adjoining land the
burden of the covenant will not pass and the
covenant will be regarded as a personal agreement
between the original parties. Subsequent parties
will not be bound by the covenant.
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Restrictive covenant or negative covenant
Under Land Title Act, Private Restrictive
Covenants shall cease to be enforceable
against assigns of the servient land, at the
expiry of 20 years from the date of entry of
a notification thereof on the land-register.
It can be extended for a period of 10 years.
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Removed by:
1. Release wholly or in part by
notification of registered owner of
dominant land and person having a
registered interest in the land;
2. Expiry term of restrictive covenants;
and
3. Extinguishment or variation by order
of court.
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Question:
Peter bought a property and took up a bank
loan to finance it. He later lease it to John, the
tenant. Mary has a right of way easement
across Peter’s land. List the interest in order of
priority.
a)
b)
c)
d)
easement, mortgage, lease
Mortgage, easement, lease
Mortgage, lease, easement
Easement, mortgage. Lease is not an interest
Question:
Which one of the following may not pass on
with land?
a)
b)
c)
d)
To maintain the plants in the garden
Tenant with a valid tenancy agreement
Assignee with a legal assignment of a lease
Covenants that touch and concern land
Question:
The government imposes a condition that
owners of a condominium must also maintain
the drain outside the development. This is a
a)
b)
c)
d)
Positive covenant
Negative covenant
Positive easement
Negative easement
REVISION 5
REGISTERING
INTEREST AND
RIGHTS
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LEGAL
DESCRIPTION
OF LAND
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LEGAL DESCRIPTION OF LAND
Each land parcel in Singapore is uniquely
identified by a lot number.
Identifier has 2 components, namely:
(i) The survey districts Mukim (MK) or
Town Subdivision (TS) number; and
(ii) The lot number.
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For administrative purposes, Singapore is
divided into 30 TS (TS1 to TS30) and 34 MK
(MK1 to MK34).
Town Subdivision (TS) are located around
the city area whereas Mukim (MK) are
found in the rural districts, since mukim is
the Malay word for rural area.
The TS and MK boundaries may be
altered by the Chief Surveyor.
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LOT BASE SYSTEM
The Lot Base System (LBS) maintains a
complete inventory of all lot numbers in
Singapore.
It records the history of lot creation,
amalgamation and subdivision of all lots in
Singapore..
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When are new lot numbers allocated?
New land lot numbers are allocated when:
- part of an existing lot is alienated (i.e. sold,
transferred ownership to) or acquired by the Collector
of Land Revenue; or
- there is a request, with the relevant approval or
authorisation to amalgamate and/or subdivide the
land; or
- new land parcels are formed arising from reclaimed
land, allocation of new foreshore lot, airspace lot or
sub-terranean lot.
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For Strata lots, new lot numbers are
allocated when there is a request, with the
relevant approval, to:
- subdivide a building; or
- amalgamate and/or subdivide an
existing strata lot.
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Air-space and subterranean lots are
3-dimensional lots which are
designated above and below the
ground surface respectively.
Air-space lot numbers start with the
70,000 series, and subterranean lot
numbers start with the 80,000 series.
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Sample of
Certificate of Title
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MK18 – 10018V
Sample of SSCT
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STRATA LOT
Strata lot numbers are assigned to units
in a building when a building is subdivided.
They bear the prefix "U" e.g. U12345X.
A strata lot can be further subdivided
into 2 or more strata lots, and 2 or more
strata units can be amalgamated into 1.
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Lot U17985A
A provisional lot is a strata lot in 2 phased
development where the future building shall
be subdivided, when it is built.
Being a strata lot, it also bears the prefix "U".
An accessory lot is a strata lot which is made
appurtenant (attached to) to another strata
lot. It bears the prefix "A" e.g. A22X.
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Accessory Lot
An example of an accessory lot is a car park lot
that comes with a strata lot e.g. MK 30 Lot A123X.
For example, in a strata landed or cluster
housing, each unit has a carpark comprised in an
accessory lot attached to the strata lot & has to
be sold with the unit.
The accessory lot is identified by the letter “A”
after the MK/TS number. The accessory lot must
be sold with the strata lot
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INTEGRATED LAND
INFORMATION SERVICE (INLIS)
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SURVEY MAPS
SLA maintains maps and plans in
electronic form. These records include
- Cadastral maps
- Registrar of Title Plans (RT)
- Certified Plans (CP) and Strata
Certified Plans (CPST).
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CADASTRAL MAPS
The Cadastral Maps are updated as
soon as the survey plans showing the
sub-division or amalgamation of land
parcels have been approved by the
Chief Surveyor.
New Cadastral Maps are created to
accommodate newly reclaimed lands.
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REGISTRAR OF TITLE PLANS (RT)
Registrar of Title Plan will be superseded by the
Certified Plan (CP) after a ground survey has been
conducted.
Currently, RT plan is prepared for the survey of
subterranean lots, airspace lots, reclaimed land and
foreshore structures.
(Note: foreshore has been generally defined as land
that is below the high water mark of ordinary tides)
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CERTIFIED PLAN (CP), STRATA
CERTIFIED PLAN (CPST)
These plans show the final boundaries of
the lots. Plans which depict land parcels
are called Certified Plans (CP). Plans
depicting strata lots are referred to as
Strata Certified Plan (CPST).
Each plan bears a unique plan number.
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CERTIFIED PLAN (CP), STRATA
CERTIFIED PLAN (CPST)
Where a strata lot occupies more than
one storey and there are strata voids e.g.
mezzanine unit with two or more levels, a
table in the CPST will show the floor area,
void area (if any), the sub-total area of
each storey, the total strata void area and
the total strata area of the lot.
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Sample of a Certified Plan
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Sample of a Strata Certified Plan
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REGISTRATION
OF TITLES
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TYPES OF REGISTRATION
Today, there are two (2) systems for
registration of property rights in Singapore
today.
1. The Common Law Deeds System
(Registration of Deeds System) - the old
system); &
2. The Torrens System [Land Titles Act and
Land Titles (Strata )Act)] – the new system.
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THE ‘OLD’ SYSTEM
Under the Registration of Deeds Act, registration of
Deeds is not mandatory.
Conveyance of Common Law land registered under the
Registration of Deeds Act is complicated and labour
intensive.
It is cumbersome and time-consuming as title has to
be deduced for 15 years to “good root of title.”
Presently there are hardly any deeds lodged at the
Registry of Deeds.
THE TORRENS SYSTEM
• The Land Titles Act was introduced in 1960.
• Under the Land Titles System, a Land Titles Register
is maintained.
• It simplify form of titles by using standardised forms
in place of deeds
• Facilitate transactions and results in lower
registration costs
• Under this Land Titles System, registration is
mandatory to effect the transfer of an estate
or interest in land.
• All documents must be lodged either
manually using the approved form or
electronically.
• Land Titles Registry, which comes under the
Singapore Land Authority umbrella, handles
the registration of property transactions in
Singapore
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• Under the Land Titles System, there is a single
document of proof of title (Certificate of Title).
• The Certificate of Title contains all notifications of
any dealings over land, therefore need not trace
back 15 years.
• A Land Titles Register is maintained
• Registration is mandatory to effect the transfer of
an estate or interest in land.
• Indefeasible Title: Title is guaranteed by the State
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The Land Titles Registry registers all legal
transactions affecting land, including:
➢ landed property (bungalows, terrace
houses and semi-detached houses);
➢
flats (whether private or HDB) and
➢ commercial and industrial properties.
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THREE PRINCIPLES OF LAND TITLES SYSTEM
The Land Titles System works on three
principle:
- Mirror principle – the register
(Certificate of Title) reflects (mirrors)
accurately and completely the current
facts about a person's title.
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- Curtain principle – one does not need to
go behind the Certificate of Title as it
contains all the information about the title.
All of the necessary information regarding
ownership is on the Certificate of Title.
- Insurance principle – An Assurance Fund
provides for compensation of loss if there
are errors made by the Registrar of Titles.
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THE LAND REGISTER
The Land register is the authoritative record
on the ownership of all properties
registered under the Act in Singapore.
The Land-register provides information on:
- Whether it is freehold or leasehold or
others
- Land area of the property
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- The name(s) of the registered owners
- The legal arrangement by which the
registered owners own the property (eg.
Joint tenants or Tenants in common)
- The addresses for service of legal notices
on the registered owners
- Whether there are legal interests (eg.
Mortgages, CPF Charge) affecting the
property
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The Land register in the Land Titles Registry
shows who owns the land and whether there are
encumbrances, such as mortgages or charge
affecting the land.
- Protects the rights of property owners.
- Prevent fraudulent or secret transactions.
Enables those purchasing, financing or otherwise
dealing in land to conduct their transactions and
business affairs efficiently and with certainty.
- Facilitate transactions by giving proof of title
- Allows public searches to be conducted.
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CERTIFICATE OF TITLE (CT)
Whenever the State issues a State title,
the Registrar of Titles will issue a
Certificate of Title for that piece of land.
New Certificates of Title are issued
when land is subdivided or amalgamated.
This facilitates the transfer of the legal
titles relating to landed properties
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QUALIFIED TITLE
• The Land Titles Registry is progressively converting
all lands in the ‘old’ system under the Registration
of Deeds Act to be brought into the ‘new’ system
under the Land Titles Act.
• When a land in the ‘old’ system is first converted to
the ‘new’ system, the new document of title is
issued as “qualified” title.
• As a qualified title, it is subject to any subsisting
interests in land that was in existence at the date of
issue.
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• In a “qualified” title, a “caution” is endorsed
on the document of title stating that the
title is subject to pre-existing claims or
encumbrances.
• This means that the State does not
guarantee the title to be free from
encumbrance; and
• A buyer of property with a qualified title
must still investigate the pre-existing
common law deeds for the last 15 years.
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• The Land Titles Act now provides for the
automatic lapsing of cautions 10 years after
the land was converted; or
• after 2 years from the amendment of the
Land Titles Act in 2001, whichever is later,
even if there has been no sale after title
conversion.
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• The Singapore Land Authority will monitor the
titles and lapse the cautions as they become
due. There is no need for the owner to submit
an application or pay any registration fee.
• It is only when the caution lapses that the title
becomes indefeasible and is backed by a State
guarantee.
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CAVEATS
A caveat is a legal document lodged at Singapore
Land Authority by someone (known as a "caveator")
against a property in which the caveator claims an
interest.
The Land Titles Act allows any person who claims an
interest in the property to lodge a caveat. When a
caveat is lodged, the Registrar of Titles will notify all
parties.
A caveat is valid for a period of five (5) years from the
date of its lodgement, which can be extended for a
further 5 years.Copyright Real Centre Network Pte Ltd
A caveat may be lodged by any party who claims an
interest in the property and that party is usually a :
• Buyer who has paid a deposit to buy a particular
property; OR
• Financial institution (Bank) which has granted a loan
to the owner or the buyer; OR
• CPF Board when CPF funds are released from the
owner's or the buyer's CPF account(s).
It is a precautionary step taken by the caveator pending
completion of his transaction, it will be removed once
ownership is registered.
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• Licensed money lenders are not
allowed to lodge caveats on HDB flats;
and
• Creditors cannot lodge a caveat on the
property, unless they acquire a Court
Order.
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Question:
The purpose of registration of property is to:
a) Provide proof of title for the owner of
property
b) Provide a system of deeds and transaction
records
c) To help determine priorities to competing
rights
d) All of the above
Question:
The following depicts a strata lot:
a)
b)
c)
d)
MK 18 Lot A122X
MK 18 1133S
MK 18 U122A
MK 18 Lot 1223U
Question:
Ben exercised an option to purchase a property.
Before the title is transferred, there might be
competing interest in the property. Ben should
lodge a _____ to protect his interest.
a)
b)
c)
d)
Title deed
Registry of Titles
Caveat
Certificate of Title
REVISION 6
ACQUIRING RIGHTS
AND INTEREST
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RESTRICTIONS
ON CAPACITY TO
HOLD LAND
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1. MINORS
Signer must be at least 21 yo:
1) Any contract for sale, purchase, mortgage,
assignment or settlement of any land
2) Any contract for a lease of land exceeding 3 years
3) Any contract for the sale, transfer or pledging of
collateral for a minor’s beneficial interest under a
trust
Signer must be at least 18 yo:
1) contract for leases up to 3 years.
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2. MENTAL CAPACITY ACT (MCA)
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If a person is of unsound mind (or lacks mental capacity)
and incapable of managing his affairs, the court may
appoint Deputies to manage his affairs. On appointment,
the court may order that the person to have powers for
the management of his property.
But the powers shall not extend to the sale, mortgage or
charge of any part of the property, and to lease of more
than 3 years
Where it is deemed desirable to so deal (sell or mortgage)
with the property, application should be made to the
court through the registrar.
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LASTING POWER OF ATTORNEY (LPA)
The LPA is a legal instrument which allows a
person who is at least 21 years of age ('donor'), to
voluntarily appoint one or more persons
('donee(s)') to make decisions and act on his
behalf should he lose mental capacity one day. A
donee can be appointed to act in the two broad
areas of personal welfare and property & affairs
matters.
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There is a 3-weeks mandatory waiting
period before an LPA can be registered.
Objections which can be raised during this
waiting period include:
- The donor made the LPA under duress.
- The donor does not have the mental
capacity to make the LPA.
- The donor is a bankrupt and appoints a
property and affairs donee.
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TERMINATION OF DONEE’S POWERS
OR REVOCATION OF LPA
An LPA and/or powers of the donee(s) can be
revoked under certain circumstances:
- The donor, while he still has mental capacity,
decides to revoke the LPA;
- Death of the donor or donee;
- The donee loses mental capacity;
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- Bankruptcy of the donor or donee
terminates any powers granted by the LPA in
respect of property and affairs; and
- Dissolution or annulment of the marriage
between the donor and donee, unless the
donor specified in the LPA that such an
event will not cause the LPA to be revoked.
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3. ENTITIES WITHOUT SEPARATE LEGAL IDENTITY
4. SOCIETIES
A society or an association is registered under the
Registration of Societies Act.
A society has no separate legal entity. Therefore, a
society cannot hold land in its name, but must do
so through trustees.
There should be at least 2 trustees, or if only one,
then it should be a trust corporation (for example,
HSBC Trustee (Singapore) Limited).
5. RESTRICTION OF FOREIGN OWNERSHIP
Since 1973, the Singapore Government has
imposed restrictions on foreign ownership of all
private residential property in Singapore. Such
ownership is governed by the Residential
Property Act.
Foreign persons cannot buy restricted properties
with approval from Land Dealings Approval Unit
(LDAU) - BCA. SLA
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FOREIGN PERSON
Under the Residential Property Act, a foreign
person means any person who is not any of the
following:
- Singapore citizen;
- Singapore company;
- Singapore limited liability partnership; or
- Singapore society.
A Permanent Resident is considered a foreign
person.
RESTRICTED PROPERTIES
Restricted properties include:
• Vacant residential land;
• Terrace house;
• Semi-detached house;
• Bungalow/detached house;
• Strata landed house which is not within an
approved condominium development under the
Planning Act; i.e. approval after 3 Apr 2012.
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•
•
•
•
•
Townhouse;
Residential shophouse;
Association premises;
Place of worship; and
Worker’s dormitory/service apartments/
boarding house (not registered under the
provisions of the Hotels Act).
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NON-RESTRICTED PROPERTIES
-
-
Foreigners are not restricted from acquiring:
Condominium unit;
Private Flat unit (Non-HDB Flats);
Strata landed house in an approved condominium
development, i.e. approval before 3 Apr 2012
A leasehold estate in restricted residential property
for a term not exceeding 7 years, including any further
term which may be granted by way of an option for
renewal;
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NON-RESTRICTED PROPERTIES
- Shophouse (for commercial use);
- Industrial and commercial properties;
- Hotel (registered under the provisions of the Hotels
Act); and
- Executive condominium units , HDB flats (2 SPRs
can buy)
- HDB shophouses (which is considered a commercial
property).
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Paterson Residence
Criteria for approval
Each applicant is assessed on a case-by-case basis,
taking into consideration, including but not limited
to, the following factors:
• The applicant should be a permanent resident of
Singapore for at least five years; and
• The applicant must make exceptional economic
contribution to Singapore. This is assessed taking
into consideration factors such as his or her
employment income assessable for tax in
Singapore.
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Approval in-principle
Applicant may apply for an approval in-principle.
before entering into any contract to purchase a
restricted property.
If approval is granted, applicant has to submit the
details of the property you intend to purchase within
one (1) year from the date of the letter of approval.
Otherwise, the approval will lapse and you will have to
make a fresh application. There is no extension of
validity for the approval in-principle granted.
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Restriction on the type of property
In general, Permanent Residents are allowed to buy
only restricted residential properties which
(i) Do not exceed 15,000 square feet, and
(ii) Are not situated within a good class bungalow
area.
Applicants who wish to purchase such properties
are subject to much more stringent qualifying
criteria, including making exceptional economic
contributions.
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Foreign ownership rules for landed properties on
Sentosa Cove is relaxed but not exempted, with
an express processing time and no minimum
occupation period.
__________________________________
Is there any restriction on the property in
Sentosa that foreigners can buy? Yes. The land
area of the property must not exceed 1,800 sq
metres (i.e. 19,375 square feet).
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The conditions of approval
• Applicant shall use the property solely for
his own occupation and that of the
members of his family, as a dwelling house,
and not for rental or any other purpose;
• Breach of the condition subject to financial
penalty of up to 3 times the rental income
earned over the period of breach or $10,000
whichever is higher
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• Applicant shall not dispose of the property
within 5 years from the date of legal
completion of the purchase of the property or,
if the property is under construction, 5 years
from the date of issue of the Temporary
Occupation Permit or Certificate of Statutory
Completion (whichever is issued earlier) for
the property; and
• Applicant shall not subdivide the property,
without approval.
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Can buy a vacant land to build house?
• Yes, applicant can buy a vacant residential
land to build a house.
• If approval is granted, applicant will be
required to complete the construction of the
dwelling house on the property within 3
years from the date of the letter conveying
the decision.
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Buy a second restricted property
A foreigner who already owns a restricted
property may buy a second restricted property,
provided he has fulfilled the 5-year nondisposal condition.
However, if he is granted approval for the
purchase, he will be required to dispose of your
existing restricted property as follows:
• On or before the date of legal completion of
the purchase of the new property; or
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• Within 3 months from the date of issue of the
Temporary Occupation Permit or Certificate of
Statutory Completion (whichever is issued
earlier) if the intended property is under
construction; or
• Within 3 months from the date the seller
delivers vacant possession of the new
property for which the Temporary Occupation
Permit has been issued, but separate title has
not been issued yet.
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Inheritance
Foreign person cannot acquire/inherit a restricted
property unless he obtains approval.
If approval is not granted to him, the personal
representatives of the estate of the deceased
person must dispose of the foreign person's
share in the restricted property within a period
of 5 years from the date of the death of the
deceased person.
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Obtaining Citizenship Status
Individuals who subsequently obtain Singapore
Citizenship need to write in officially to Land
Dealings (Approval) Unit on the change.
- Required to forward certified true copies of either
Singapore passport, Singapore (pink) identity card
or certificate of Singapore citizenship.
- Will be released from the conditions imposed
as Singapore Permanent Resident (SPR).
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Individuals Who Renounce Or Lose Their Singapore
Citizenship Or Permanent Residency Giving Up Of
PR/Citizenship Status
Individuals who renounce or lose their Singapore
Citizenship or Permanent Residency will be required
to dispose of their restricted residential properties
within 2 years from the date of cessation of
Citizenship/Permanent Residency
If fail to do so, liable to fine not exceeding $20,000
and/or imprisonment for a term not exceeding 3
years
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Question:
Under the Residential Property Act, only ____
can purchase restricted properties.
a)
b)
c)
d)
Singaporeans strictly
Singaporeans and approved persons
Singaporeans and Malaysians
Singaporeans and Singapore Permanent
Residents
Question:
Foreign persons should check on the
restrictions on foreign ownership of land which
is regulated by the
a)
b)
c)
d)
Controller of Housing
Urban Redevelopment Authority
Singapore Land Authority
None of the above
GIFT
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GIFTS OF PROPERTY
A gift, in the law of property, is the
voluntary transfer of property from one
person (the donor or grantor) to another
(the donee or grantee) without
consideration of money.
The deed of Gift has to be drafted by
lawyer.
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INTER VIVOS GIFT
John
Gives his
house
Mary
This is known as an “inter vivos”
or a lifetime gift.
TESTAMENTARY GIFT
A Testamentary gift is a
gift made by will.
Such gifts do not become
effective until the death
of the donor.
The ownership of the gift
is transferred to the
donee only after the
testator's death.
Insolvency, Restructuring and
Dissolution Act 2018
Under IRDA, Section 363,
effective from 30 July 2020,
where an individual is adjourned
bankrupt, and entered into a
transaction with anyone at an
undervalue, the Official Assignee
can void the transaction, if this
transaction was made within 3
years from bankruptcy
application.
Transaction at an undervalue
– The bankrupt person makes a gift to the
recipient, with no consideration; or
– The bankrupt person enters into a transaction,
in consideration of marriage; or
– The bankrupt person enters into a transaction
where the value of consideration received is
significantly less than the market value of the
property;
within three (3) years from the date of the
bankruptcy application in which that person is
adjudged a bankrupt.
• An owner of a property which is subject to transaction
at an undervalue (including a gift) would find it difficult
to sell the property within 3 years from the date of that
transaction.
• For a sale and purchase transaction governed by
Condition 10.2 of the Law Society Conditions of Sale
2020, a buyer may rescind the purchase on that
ground, which is to protect the buyer who may not
have knew of the gift element prior to entering into
the purchase.
• If there is a gift element or property subject to a
transaction at a substantial undervaluation, the buyer
would find it difficult to procure bank loan to finance
the purchase price, and further, within a 3 years period
from the date of that transaction, it remains voidable
at the option of the Official Assignee as aforesaid”.
Source: Loh Eben Ong LLP, Singapore Lawyers , Singapore Law Firm
https://law.com.sg/faq/effect-gift-property/
Question:
Gary’s parents transferred a condominium previously
held in joint tenancy to him as a gift. Gary’s parents
later got divorced and his father was declared
bankrupt one-year after the transfer. Which of the
following is correct?
a) Nothing happens, it is a gift to Gary
b) His mother can claim back 50% of the ownership
c) Gary’s property may be subjected to claims by the
father’s creditors
d) Only his father’s shares will be claimed by creditors
TRUSTS
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TRUST
Singapore trust law is broadly based upon the English
trust principles. The Trustees Act (Cap 337) provides a
wide regulatory framework for trusts and trustees.
In law, a trust is a relationship where property is held
by one party (trustee), for the benefit of another party
(Beneficiary).
A trust is created by the owner, also called a "settlor",
"trustor" or "grantor" who transfers property to a
trustee.
The trustee holds that property in trust for the
beneficiary of the trust.
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Pay Master
Legal Owner
Equitable
Owner
Conditions for creating a Trust
3 CERTAINTIES :
1. Certainty of intention
Clear intention that to create trust for the beneficiary
2. Certainty of subject matter
Items placed in trust, i.e. property, funds
3. Certainty of objects
Details of beneficiaries.
TYPES OF TRUST
1. Express (inter vivos)
- Revocable
- Irrevocable
2. Testamentary (Will)
3. Implied (by court)
- Resulting trust
- Constructive trust
4. Collective
1. Inter Vivos Trust
A living trust can be revocable or irrevocable.
If a trust is revocable, the settlor can terminate or change
the terms of the trust. As such, the settlor still has some
control over the future of the trust.
However, this means it may not provide protection
against creditors or from claims from a former spouse in
a divorce. Because the trust arrangement can be unwound
by the settlor, a court may deem that the settlor still has
control over the assets and may demand that the settlor
terminates the trust
to repay
creditors.
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Real Centre
Network Pte Ltd
An irrevocable trust is one which cannot be
cancelled, terminated or changed by the settlor.
Since the settlor has no legal rights over the
assets, creditors cannot take the assets in
settlement of claims against the settlor. Simply
put, the assets do not belong to the settlor
anymore.
The assets under irrevocable trust are
protected from the creditors, provided that the
irrevocable trust has been made for more than
3 years prior to bankruptcy.
2. Testamentary Trust
A testamentary trust is made by
using a will.
It becomes effective after the
settlor has died. Such a trust is
irrevocable. When the settlor
passes away, assets flow into the
testamentary trust through the
Will and is subject to the terms as
well as duration of the Grant of
Probate process.
3. Implied Trusts
An implied trust is a trust is imposed by law to
situations either by presuming an intention of the
participants to create a trust, or simply because of
the facts at hand.
There are two types of implied trust. They are:
(i) Resulting Trust; and (ii) Constructive Trust.
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3(i) Resulting Trust
Where A makes a voluntary payment to B or pays
(wholly or part) for the purchase of property
which is vested either in B alone or in the joint
names of A & B, there is a presumption that A
did not intend to make a gift to B: the money or
property is held on trust for A (if he is the sole
provider of the money) or in the case of a joint
purchase by A & B in shares proportionate to
their contributions.
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3(ii) Constructive Trusts
Examples where constructive trusts may arise:
• A holds funds that he knows have been paid to him by
mistake.
• A holds an asset that he has obtained by means of fraud.
• A and another person (B) share a common intention that B
should have a beneficial interest in an asset, and B has acted
to his detriment on the basis of that intention. This is known
as a common intention constructive trust and is often argued
in disputes about the ownership of property occupied by
cohabitees, as in the leading cases of Stack v Dowden [2007]
UKHL 17 and Jones v Kernott [2011] UKSC 53.
Source: https://legaldictionary.net/constructive-trust/
4. Collective Trust
A collective trust (also referred to as a
"collective investment trust,“) is a trust
administered by a bank or trust company that
combines assets for multiple investors who
meet specific requirements set forth in the
fund’s declaration of trust.
This is solely for investment purposes. It
includes unit trusts, business trusts and real
estate investment trusts.
Succession
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TESTATE SUCCESSION
Testator: Person who makes a will
Beneficiaries: persons how benefit/inherit the
will. If there are minors (persons under age of
21),trustee will administer assets for the benefit
of the minors.
Executor (a female executor of a will is called
“Executrix”): Person nominated by the testator
to administer his estate
Trustee: Usually the same person as executor,
person who has the power to hold the estate of
the decreased
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TESTATE SUCCESSION
Executors will apply to Court for Grant of Probate
Court issues the Grant once all procedural
requirements are met.
Once the Grant of Probate is issued, the Will
becomes a public document.
Executors will get a copy and all property and
assets will be administered and distributed
according to the Probate.
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Wills Act, Chapter 352
A Valid Will must have the following components:
- Be in writing
- The testator must be at least 21 years old
- Signed by testator at the foot of the will
- Witnessed by at least 2 persons who must be
present to witness the testator signing. They
must also sign the will in the presence of the
testator
- The witnesses must not be the beneficiaries ,nor
spouse of any of the beneficiaries, under the
Will.
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Under Singapore law, a Will and a
nomination for CPF funds are automatically
revoked upon marriage. This is to safeguard
the interest of the immediate and new family
members, that is, the spouse and children.
Therefore, if a person is getting married or
re-married, it is good and proper for him or
her to do again a fresh Will or a fresh CPF
nomination.
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INTESTATE SUCCESSION
If there is no will, assets will be distributed
according to the Intestate Succession Act.
Administrators will administrator the
estate.
Letters of Administration: instead of Grant
of Probate. The procedure is more
complicated and lengthy.
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Intestate Rules
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Muslim Inheritance Law in Singapore
In Singapore, Muslim intestate law, faraid, is
provided for under the Administration of Muslim
Law Act (AMLA) and is administered by the Syariah
Court in Singapore.
Under section 111(1) of the AMLA, all Muslims
who are domiciled in Singapore, who pass away
after 1 July 1968, must have their intestate
property administered according to faraid.
If the property of the deceased, be it a
HDB property or private property, is held
by the deceased and other parties as
tenants-in-common,
then it is clear that the deceased’s share
in the property is to be divided according
to his Will and/or Faraid.
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• The deceased Muslim person may have written a
will, or wassiyat/wasiat, to distribute some part
of his estate. The will must be, following section 6
of the Wills Act, in writing and signed by the
deceased and two other witnesses.
• The deceased may only will away (ie give away
by will) up to one-third of his estate after the
deductions above have been made. Any amount
above this one-third will be disregarded.
Source: Singapore Legal Advice
https://singaporelegaladvice.com/law-articles/muslim-inheritance-law-in-singapore/
Question:
Mike and John own a shop tenancy in common, where
Mike owns 40% of the estate. Mike passes away
without a will and he left behind his wife and son.
a) Mike’s wife will inherit 20% and his son will inherit
the other 20% shares
b) Mike’s wife will inherit all 40% shares
c) John will become sole owner of the shop
d) Mike’s 40% shares will be transferred to the court
for decision
REVISION 7
LAW OF CONTRACT
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Invitation to Treat
An invitation to treat is an indication that someone is
prepared to receive offers, with the view to forming a
binding contract. It is not an offer in itself.
4 types of an invitation to treat
1.
2.
3.
4.
Auction sales
Advertisement
Tender
Exhibition
:
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ELEMENTS OF A CONTRACT
For a contract to be valid and enforceable,
the following must be present:
(i) Intention to: create legal relations
(ii) Offer
(iii) Acceptance
(iv) Consideration
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(i) Intention to create legal relations
Creation of legal relations is a doctrine that states an
agreement is legally enforceable only if the contracting
parties may be deemed by the court to have intended
it.
:
Commercial Agreements:
The parties involved are presumed to create legal
relations, unless the circumstances or nature of an
agreement preclude this.
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(ii) Offer
An offer is a promise, or other expression of
willingness, by one person (offeror) to be bound
on certain specified terms upon the unqualified
: terms by the other person
acceptance of these
(offeree).
An offer must be communicated and conveyed.
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Termination of an offer
If the offeree tries to change the terms of the
offer in the acceptance, then it is not an
acceptance, it is a counter-offer.
1. A counter-offer rejects the offer.
The position of the two parties is reversed. The
offeree becomes the offeror and the offeror
becomes the offeree.
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Termination of an offer
:
2. Withdrawal: can happen at
any time prior to its acceptance,
provided there is
communication,
of the withdrawal to the
offeree, whether by the offeror
or through some reliable
source.
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Your asking
price of $1m is too
high. I will buy it
at $950,000
instead.
3. Rejection of an offer: includes making of a
counter-offer or a variation of the original
terms.
4. Lapse: In the absence of an express
stipulation as to time, an offer will lapse after
a reasonable time.
5. Death of the offeror: If known to the offeree,
would render the offer incapable of being
:
accepted by the offeree. Even in the absence
of such knowledge, death of either party
terminates any offer which has a personal
element
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iii) Acceptance
Offer is accepted by unconditional acceptance to its
terms by the offeree. Counter offer is not an
acceptance.
:
Acceptance must be communicated to the offeror and
cannot be inferred from mere silence.
Acceptance must be in the mode specified, for
example, options indicates that acceptance must be
handed to solicitor by 4pm.
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iv) Consideration
Consideration is a promise of something of value
given by a promisor in exchange for something of
value given by a promisee; and typically the thing of
:
value is goods or money.
Each party to the contract must receive something of
value.
For real estate transactions, consideration is usually
money.
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Consideration
Example: Let's say you backed into your neighbor's golf
cart and damaged it. Your neighbor is legally permitted
to sue you for the damage but instead agrees not to
sue you if you pay him $1,000.
This agreement provides adequate consideration for
the contract, because each party is giving up something
in the exchange -- you're giving up some of your money
while your neighbor is giving up the right to sue you.
Consideration
Rule 1: Consideration must move from the promisee to
the promisor
• If there is "a promisee", there must already be a
promisor
• The promisor has already made a promise to the
promisee, which is sufficient to form a contract (but
it's not formed at this point)
• The promisee must give something back to the
promisor - a promise
Consideration
Rule 2: Past consideration is no consideration
This means that past consideration is not a valid
consideration and has no legal value.
:
Thus, consideration cannot consist of something that
was already done before the promise was made.
In order to valid, consideration must be supplied in the
present or in the future, but not things done
beforehand Copyright Real
in Centre Network Pte
theLtd
past.
Therefore if an act is done before and independently of
a promise, it is not good consideration.
For example if A paints B’s house out of kindness, then
later B promises to pay A $500, and B fails to pay this.
A cannot sue because the painting of the house out of
kindness was past consideration and independent of
the promise made later.
Consideration
Rule 3: The consideration given must be sufficient,
but it need not be adequate.
This simply means that there must be some
consideration to support a contract, no matter how
small the amount.
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The consideration given need not reflect the full
market value.
For example, John offers to sell his house to Mary
at $1, the open market value of his house is
$800,000.
In law, this is still
a valid consideration, even
:
though the consideration of $1.00 is way below
the real market value.
Hence the saying, consideration must be
sufficient but need not be adequate.
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CERTAINTY AND COMPLETENESS
1. Essential terms must be sufficiently certain for
contract to be enforceable
Before the agreement may be enforced as a
contract, its terms must be sufficiently certain.
At the least, the essential terms of the
agreement should be specified.
CERTAINTY AND COMPLETENESS
2. Agreement must be complete for contract to
be enforceable
An incomplete agreement also cannot amount
to an enforceable contract. Agreements made
‘subject to contract’ may be considered
incomplete if the intention of the parties, as
determined from the facts, was not to be legally
bound until the execution of a formal document
or until further agreement is reached.
The 4P in a contract
The 4Ps :
• Parties,
• Property
:
• Price; and other agreed
• Provisions (Terms),
must be stated for an enforceable contract.
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Terms of Contract
Term(s) are provision(s) forming part of a
contract. Each term gives rise to a contractual
obligation.
:
Many contracts include either conditions or
warranties, sometimes both. Parties often
include them to clarify what they expect of one
another.
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CONDITIONS
• Conditions are considered more important stipulations
in the development of the contract.
• It's not possible for a contract of sale to be fulfilled
unless the conditions
: are fulfilled
• The objective of the agreement is directly associated
with conditions
If one party breaches a condition then the other party may:
- End the contract; or
- Claim damages.Copyright Real Centre Network Pte Ltd
WARRANTIES
• Warranties are of lesser importance.
• With warranties, this stipulation is a secondary
concern because it's possible for a contract to be
fulfilled without the warranty being fulfilled.
:
• Warranties are simply subsidiary provisions that are
related to the contract's objective.
If one party breaches a warranty then the other party
may:
- Claim damages.
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Express and implied terms
Terms in a contract may either be express or implied.
1. Express term is stated by the parties during
negotiation or written
in a contractual document.
:
For example, “During the term of the lease, the tenant
cannot make any alterations or additions to the premises
without the landlord’s consent”. This means that the tenant
cannot change the structural nature of the premises, unless
expressly sanctioned by the landlord.
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2. Implied terms are terms not stated by the
contracting parties, but nevertheless given by law
and implied in the contract.
Example: The Implied terms of tenancy agreements are
obligations the landlord
and tenant have, which may
:
not be set down in the agreement, but which are given
by law and are implied into all tenancy agreements.
These terms form part of the contract, even though
they have not been specifically agreed between the
landlord and the tenant.
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Subject to Contract
A contract specifies "subject to contract” may fall into
one of three categories:
1) The parties are not immediately bound to the
bargain, but they :intend to restate the deal in a
formalised contract that will not have a different
effect; e.g. Letter of Intent prior to the signing of
Tenancy Agreement; or
A contract is not legally binding until two or more
parties have reviewed and agreed to the terms of the
contract.
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Subject to Contract
2) The parties have completely agreed to the terms, but
have made the execution of some terms in the contract
conditional on the creation of a formalised contract;
e.g. subject to obtaining the approval from LDAU for
:
foreigners purchasing
restricted properties or
3) It is merely an agreement to agree, and the deal will
not be concluded until the formalised contract has
been drawn up, e.g. option to purchase will not
translate to a sale and purchase until the exercise of the
option
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Subject to Contract
Example: This sale and purchase is subject
to satisfactory replies on legal requisitions.
:
If there is no satisfactory reply, buyer can
annul the OTP and take back all money.
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REAL ESTATE SALES AND PURCHASE
Sale and purchase of real property must be in writing to
be enforceable. This writing can be in the form of
emails or any other electronic written
correspondences and: need not be in a single document.
Under the Conveyancing and Law of Property Act
(Chapter 61), conveyance of any estate or interest in land
(other than a lease for a period not exceeding 7 years)
must be done in deed in the English language.
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UNILATERAL CONTRACT VS.
BILATERAL CONTRACT
A real estate sales contract is a "bilateral" (twoway) agreement. The seller agrees to sell, and
the buyer agrees to buy.
:
Compare this with an option; an option is a
unilateral (one-way) agreement in that the seller
is obligated to sell, but the buyer is not obligated
to buy - it is his option to do so.
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Option To Purchase
An Option to Purchase is an agreement between the
buyer and seller of a property, and is the most
common way for parties to enter into a contract for the
sale and purchase of property.
:
Typically, the seller grants the buyer an option to
purchase the property based on the terms and
conditions in the Option to Purchase, in return of a sum
of money from the buyer called the Option Fee.
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Option To Purchase
The Option Fee is typically 1% of the sale price of the
property, but is negotiable between parties.
The Option to Purchase
is used for the prospective
:
buyer to “reserve” the property. This is because for an
agreed period of time stated in the Option to Purchase
(known as the Option Period), only that particular
buyer will be able to purchase the property and not
anyone else.
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Option To Purchase
The Option Period is usually 14 days, but may be
negotiated between parties.
Thus, the Option to :Purchase is useful as the seller is
not allowed to sell the property to any other buyers
during the given Option Period, while the buyer has the
same period of time to consider whether to go ahead
with the purchase.
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Option To Purchase
If the buyer fails to exercise the Option to Purchase
within the Option Period, the Option to Purchase
expires and the Option Fee is forfeited to the seller,
unless the Option :to Purchase specifically provides
otherwise.
The seller is entitled to keep the Option Fee, and is free
to put the property up for sale again.
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Option Money
Where a vendor gives an ‘option’ to a prospective
purchaser, he is making an offer to sell his property at a
specified price.
In consideration of the ‘option money' paid by the
:
prospective purchaser,
the vendor thereby agrees to
keep the offer open for the purchaser's acceptance,
until the expiry of the appointed day and time specified
in the 'option’.
Without the payment of the 'option money', the
vendor is free to revoke his offer, at any time before
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acceptance by the
prospective
purchaser.
Vitiating
factors in a
contract
:
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Vitiating Factors:
- Mistake “Non Est Factum”
- Misrepresentation
- Duress
:
- Undue influence
- Incapacity
- Illegality
;
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1. Mistake as to the
nature of document
signed
1. Mistake
Non est factum (Latin for "it is not [my] deed") is
a defence in contract law that allows a signing
party to escape performance of an agreement
:
"which is fundamentally different from what he
or she intended to execute or sign.
A claim of non est factum means that the
signature on the contract was signed by
mistake, without knowledge of its meaning. A
successful plea would make the contract void.
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According to a court case in England (Saunders v Anglia
Building Society (1971)), the following strict
requirements must be met:
(1) The person pleading non est factum must belong to
class of persons, who through no fault of their own,
are unable to have any understanding of the
purpose of the particular document because of
blindness, illiteracy or some other disability.
The disability must be one requiring the reliance
on others for advice as to what they are signing.
2. The "signatory must have made a
fundamental mistake as to the nature of
the contents of the document being signed,
including its practical effects.
3. The document must have been radically
different from one intended to be signed.
2. Misrepresentation
Representations
A representation is a statement of fact which is relied
on by the receiving party and induces them to enter
into contract. Representation is normally before the
:
contract, but may be
repeated in the contract as a
term.
A party may claim misrepresentation where a false
representation has been made.
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Representations
They may be entitled to rescind the contract, which
means that the contract
would be set aside and the
:
receiving party may also be entitled to damages to put
them back into the position they would have been had
the contract never been entered into.
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Misrepresentation
A misrepresentation is a false statement of fact, made
by one party to another, which induces the other party
to enter into a contract.
:
They may be entitled to rescind the contract, which
means that the contract would be set aside and the
receiving party may also be entitled to damages to put
them back into the position they would have been had
the contract never been entered into.
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A representation may be express, or it may
be inferred from the representor’s conduct.
On its own, silence or non-disclosure does
not usually constitute a representation.
In order for an action
for misrepresentation
:
to succeed, the following must be shown:
- Statement of fact, not opinion.
- False statement.
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- Statement must be material (sufficiently
important) enough to make a difference in the
decision of the innocent party to enter into the
contract.
If it can be shown that the innocent party would
have entered into :the contract regardless of
whether the statement is true or false, then an
action for misrepresentation will not succeed.
- Statement of fact must be addressed to the
innocent party.
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Types of Misrepresentation
1. Fraudulent misrepresentation
:
Fraudulent
misrepresentation
is
a
statement made with an intent to deceive
and with the knowledge that it is false.
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Negligent Misrepresentation
2. Negligent misrepresentation
A statement made in the belief that it is true but
without reasonable grounds for the belief, because
:
it was made without due care for its accuracy.
Therefore, where due care was taken, e.g. proper
checks were performed, but the statement was
nonetheless incorrect, the courts have refused to
impose liability for negligent misrepresentation.
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Negligent misrepresentation arises not from
the agent's intent to mislead or deceive the
purchaser, but rather from his lack of care in
ascertaining or confirming the accuracy of the
information he provides to the purchaser.
:
It can also be the result of the agent's failure to
check the information he receives from the
vendor.
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Innocent Misrepresentation
3. Innocent misrepresentation
A statement made in the belief that it is
:
true and with reasonable grounds for that
belief.
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3. Undue Influence
:
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Undue Influence
Undue influence arises when one person takes
advantage of a position of power over another
:
person, in an unfair way, in order to influence
and induce that other person to compromise a
property right.
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Undue Influence
To prove undue influence, a party must show
that one party to the contract is a person with
weaknesses which make him likely to be
affected by such persuasion, and that the party
exercising the persuasion is someone in a
special relationship with the victim that makes
the victim especially susceptible to such
persuasion.
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4. Duress
:
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Duress
Duress is wrongful pressure exerted upon a
person in order to coerce that person into a
contract that he or she ordinarily wouldn't enter.
It refers to a situation
whereby a person performs
:
an act as a result of violence, threat, or other
pressure against the person, his family, or his
property.
A contract induced by physical duress—threat of
bodily harm—is void.
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5. Illegality
:
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Legality of Contract
Legality of contract is an essential element.
Any agreement to violate the law and any
:
agreement forbidden
by law is unenforceable.
An example of illegal contract: A Tenancy
Agreement for the lease of a private house for
less than 3 consecutive months, at any one time,
is
an
illegal
contract
and
void.
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A back-dated Option To Purchase
(to overcome the change of law) is
illegal and void.
This is the ruling of the
Court of Appeal
Signed OTP 13 Oct.
Backdated to 4th Oct,
to bypass New MAS
Law w.e.f. 6th Oct 2012
Madam Ting
Siew May
Seller
Ting Siew May
v.
Boon Lay Choo and another
Mr Law
Kim Huat
Buyer
May 28, 2014
They had backdated optionto-buy form to circumvent
new loan rules
The Court of Appeal overruled a
High Court decision last year and
made clear it was a matter of
public policy that the court “will
not assist the buyers to benefit
from their own wrongdoing.”
….the contract for the threestorey house was void because
the couple’s intention was
illegal
6. Incapacity
:
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Incapacity to enter into contract
- Minor
- Mental incapacity
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Discharge of
:
contract
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Discharge of Contract
Discharge of a contract refers to the way in
which it comes to an end.
Contracts can come to an end in the following
ways:
:
- by performance
- by agreement
- by frustration
- by breach
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1. By Performance
Discharge by Performance
The contract comes to an end when both
:
parties perform their contractual
obligations.
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2. By Agreement
Discharge by Agreement
The parties themselves can agree to end the contract,
form a new contract or vary the original one.
The parties may enter a new contract to end the old
:
one. This is called novation.
Obviously the new contract
must satisfy all the usual rules for contractual
formation.
The parties can also release each other from their
remaining obligations – called release and discharge; or
they may release each other from some of their
Centreothers
Network Pte
Ltd
obligations and Copyright
retain Real
or add
– called
variation.
3. By Frustration
Discharge by Frustration
A contract automatically comes to an end if it is
discharged by frustration.
Four conditions must be satisfied for frustration
:
to discharge a contract:
- an unforeseeable event
the frustrating event must have not been
provided for in any provisions of the contract
between the parties. Otherwise, the contract
applies;
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- no fault of either party
That makes performance impossible,
frustrating event is not self-induced;
the
- or radically different than agreed
The frustrating event has changed the
circumstances to make the performance of the
contract radically different from that originally
undertaken. The court must find it practically
unjust to enforce the original promise.
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Example:
- Outbreak of war
- Destruction of subject property
A contract to let a music hall is frustrated as a
fire destroyed the music hall before the day of
the performance.
- Death or incapacity for personal service
One party becomes too ill to perform his
obligations in contract
- Statutory prohibition
Land is compulsorily acquired by state
“Force majeure” clause
Force majeure is a clause that is frequently
included in commercial contracts that allows a
party to be excused from performing its
:
obligations on time
when some unforeseen
outside event beyond the parties’ control (also
known as a force majeure event) prevents or
delays performance.
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For an event to be accepted as a force majeure
event, it is usually not enough to show that it
has merely become more difficult or more
expensive for the party to discharge its
obligations (e.g. the price of raw materials or
:
labour has increased). Usually it must be
impossible or highly impracticable for the party
to perform its obligations.
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Will the contract be discharged upon death of
the Seller
The contract is not discharged upon death of
seller.
:
If the buyer is willing to wait, buyer is able to
proceed with the purchase after obtaining the
following. Otherwise, buyer can rescind the
contract.
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Upon the death of the seller of property:
1) If there is a will, the court will issue a
Grant of probate.
2) If there is no will, the Court will issue
Letters of administration (LA).
The process of extracting an LA can last a few
months to many years; (if there is a dispute on
the appointment of the Administrator)
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4. By Breach
Discharge by Breach
Not all breaches entitle the innocent party
to terminate the contract. It is only
breaches of conditions or fundamental
:
breaches that allow for termination.
Breaches of warranties do not allow for
termination, however, the innocent party is
entitled to sue for damages.
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Remedies for
breach of
contract
:
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Remedies For Breach of Contract
When a contract is breached, there are
specific remedies to it:
- Damages
- Specific performance
- Injunction
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1. Damages
The common remedy available at common law
for breach of contract is an award of damages.
This is a monetary sum fixed by the court to
compensate the injured party.
In order to recover if there is no actual loss he
will only be entitled to nominal damages in
recognition of the fact that he has a valid cause
of action
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2. Specific Performance
Specific performance is an equitable
remedy in the law of contract, whereby a
court issues an order requiring a party to
perform a specific act, such to complete
performance of the contract.
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Specific
Performance
:
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3. Injunction n
An injunction is an equitable remedy in the form of
a court order that compels a party to do or refrain
from specific acts. A party that fails to comply with
an injunction faces criminal or civil penalties,
including possible monetary sanctions and even
imprisonment. They can also be charged with
contempt of court.
Counter injunctions are injunctions that stop or
reverse the enforcement of another injunction.
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Question:
Tenant has an on-going 2-yr lease, the property is now
affected by compulsory land acquisition. Which of the
following statement is true?
a) The compulsory land acquisition can only kick in
after the tenancy period expires
b) The landlord has to compensate the tenant for such
early termination
c) The landlord can cite “force majeure” but remains
liable for damages to tenant
d) The tenancy agreement is discharged without
compensation due to frustration
Question:
Mary granted an Option-to-Purchase to John with an
option period of 14 days. Mary later received another
higher offer. Which of the following is true?
a) Mary can accept the higher offer 14 days later
b) Mary cannot accept the higher offer no matter
what
c) Mary can accept the higher offer only if John did
not exercise his rights within the option period
d) All of the above
Question:
Which is an acceptance?
a) Buyer calls agent to match seller’s asking price and
will pass the 1% option fee by next week
b) Buyer gave cheque to agent and gave instructions to
pass it to seller after 3 days
c) Buyer gave a cheque to agent with a letter of offer
which is valid for 7 days. The buyer did not hear
from agent after 7 days
d) Buyer signed acceptance of Option, attaching 4%
cheque within the option period
REVISION 8
LAW OF LANDLORD
AND TENANT
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LEASES
A Lease is a legal interest in land giving the tenant/lessee
exclusive possession for a certain duration, usually in
consideration of a payment termed 'rent’.
Singapore laws relating to landlords and tenants are
mainly derived from statutory provisions under the
Conveyancing and Law of Property Act, Chapter 61
(“CLPA”) and under common law which is based
historically on English laws.
Landlord’s rights are subject to the tenancy.
Landlord has reversionary interest of the property upon
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termination of the
tenancy.
1. FIXED-TERM LEASE
- Lasts for a fixed period of time
- Has a definite beginning date and a
definite ending date
- Fixed term tenancy comes to an end
automatically, when the fixed term runs
out.
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2. PERIODIC TENANCY
A periodic tenancy also known as a tenancy from
year-to-year, month-to-month, or week-toWeek.
Exists for some period of time determined by the
term of the payment of rent.
Either the landlord or the tenant may terminate a
periodic tenancy when the period or term is nearing
completion, by giving notice to the other party.
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3. TENANCY AT WILL
A tenancy at will is a tenancy which either the
landlord or the tenant may terminate at any time by
giving reasonable notice. For example, early-movein buyer, who occupies house as Seller’s tenant.
Unlike a periodic tenancy, it isn't associated with a
time period.
Could be ended at any time by either the lessor or
the lessee for any reason, or for no reason at all.
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Proper notice must
be
4. TENANCY AT SUFFERANCE
A tenancy at sufferance (sometimes called a hold-over
tenancy) exists when a tenant remains in possession of
a property, after the expiration of a lease (trespasser),
and until the landlord acts to eject the tenant from the
property.
Landlord may evict such a tenant at any time, and
without notice.
Landlord may also impose a new lease on the hold-over
tenant.
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TERMS IN A LEASE
A lease agreement consist of the following:
1. Premises: Includes the date, name of
parties and address of the property
concerned
2. Habendum: Meaning “to have and to
hold”, indicates the commencement and
duration of the lease term
TERMS IN A LEASE
3. Reddendum: Rent clause in the lease.
Includes rent amount, deposit, service
charge, rent review.
4. Covenants: Expressed and implied
covenants
5. Conditions
6. Warranty
This clause is to
safeguard the tenant if
they are no longer
employed, transferred to
other countries.
This clause is to
safeguard the tenant if
they are no longer
employed, transferred to
other countries.
This clause is to
safeguard the tenant if
they are no longer
employed, transferred to
other countries.
Option to renew a lease
allows tenant to continue to
occupy the premises after
the initial term of lease
expires.
COMMON LAW
1. Quiet enjoyment of the premises
2. Non-derogation from the grant, landlord must
observe all the terms granted to tenant.
3. Property must be fit for habitation at the start of the
lease term;
4. Structure and facilities must be in good repair’
5. Good title. He is the owner and has the right to rent.
5. Pay property tax and quit rent if any
6. Exclusive possession of the premises
7. If landlord has sold or transferred his interest, buyer
or successor-in-title is bound to observe the terms of
lease granted
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TENANT’S COVENANT
1.
2.
3.
4.
5.
To pay rent
Keep the premises in good repair
No unauthorised alterations
Not to commit waste
Not to sublet
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STATUTORY RIGHTS OF THE LANDLORD
The Land Title Acts implied the following powers
in the landlord:
- Twice in every year during the term at a
reasonable time of the day, landlord can give
the lessee 2 days notice to enter upon the
leased premises and view the state of repair.
- He can serve a notice in writing to tenant of
any defect, requiring the tenant to rectify
within a reasonable time.
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STATUTORY RIGHTS OF THE LANDLORD
1) If tenant fails to repairing any defect according to
notice, the landlord may from time to time enter the
premises and effect the required repairs;
2) Landlord may re-enter the leased premises when the
rent is in arrears for 30 days (although no formal demand
therefor has been made);
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MORTGAGEE’S CONSENT TO LEASE
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MORTGAGEE’S POSSESSORY
REMEDIES
DUTIES & LIABILITIES OF
MORTGAGEE
TERMINATION
OF A LEASE
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TERMINATION OF A LEASE
1. By expiry of the fixed term in the Lease
Agreement
A lease automatically terminates when the
term has expired, unless there is an option
to renew for a further period which was
exercised by the Tenant.
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TERMINATION OF A LEASE
2. By express power
This is where a clause is provided in the
agreement allowing either party to
terminate the lease before the end of the
fixed term on the happening of certain
events.
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3. By surrender of the unexpired term
This occurs when the tenant gives notice to the
landlord that he will surrender the lease
even though the term of the lease has not yet
expired, and the landlord accepts the
surrender of the lease.
The surrender can be by express words of the
tenant or by operation of law. The latter happens
if the tenant either accepts a new lease or gives
up possession of the premises even though he
does not have to.
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4. By forfeiture
This is where a term of the lease allows the
landlord to end the lease, in the event of
certain breaches by the tenant, for example,
using the premises for an unlawful purpose.
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5. By notice to quit
In any lease including one for a fixed term, there
must be a clause clearly allowing for this right to
be exercised.
Under section 72 of the Conveyancing and Law
of Property Act, any notice to be given under a
lease must be in writing, including a notice to quit.
The action must be brought within six years of
the date that the arrears became due.
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DISTRESS ACT
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RELIEF NON-PAYMENT OF RENT
1) Distress Act
A writ of distress is an order issued by a court, on the
application of a landlord.
A writ of distress allows a sheriff (an enforcement officer
of the court) to enter a property to seize the tenant’s
possessions, and sell these to cover the cost of the
tenant’s unpaid rent.
A landlord can use a writ of distress to claim unpaid rent
of up to 12 months from the date of the application for a
writ of distress.
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RELIEF NON-PAYMENT OF RENT
When a writ is executed, the sheriff goes down to the
premises, seizes items to sell and provides the tenant
with a list of everything seized as well as a notice of
the seizure at a conspicuous place.
The tenant would then be given 5 days to either:
•Pay all the rent, legal costs and sheriff’s costs; or
•Apply to court to stop the sale of the items.
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RELIEF NON-PAYMENT OF RENT
If the tenant does neither of these things, the items
will be auctioned. The proceeds from the auctions
will be used in this order:
1.First, to cover the sheriff’s fees and expenses
2.Then, to cover the rent and costs that the tenant
owes the landlord
3.Any remainder is returned to the tenant
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RELIEF NON-PAYMENT OF RENT
If the tenant has already abandoned the premises by
the time the writ is granted, the writ empowers the
landlord to effectively take back possession of his
premises if he is owed at least 2 months’ rent. This is
even if the lease period has not expired yet, provided:
(a) The property is let at a rent not less than 75 per
cent of the annual value of the property and
(b) the rent has been in arrears for at least two
months
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If the distress action is brought after
bankruptcy proceedings have started against
the tenant, then only three months of arrears
of rent are recoverable against him.
The landlord may also file a proof of debt
with the Official Assignee against the
bankrupt tenant, just as he could with any
other unsecured creditor.
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RELIEF NON-PAYMENT OF RENT
2) Forfeiture of lease
Where a tenant has breached the terms of the tenancy
agreement, such as by his failure to pay rent, a landlord
may forfeit the tenancy and re-enter the premises to evict
his tenants.
To re-enter the premises, the landlord needs to make a
formal demand for the tenant to leave the premises. If
the tenant does not submit, the usual practice is to
invoke the services of a solicitor to issue a writ of
summons for possession, and begin legal proceedings for
taking possession.
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RELIEF NON-PAYMENT OF RENT
2) Forfeiture of lease
To do this, the landlord should make sure that he has expressly
stipulated a right of re-entry in the tenancy agreement. The
landlord must also serve a notice, under section 18 of the
Conveyancing and Law of Property Act, specifying the breach
complained of, the compensation sought, and the remedy to be
undertaken by the tenant.
However, a tenant may also apply to the court for relief against
the forfeiture of his lease. As forfeiture is an extremely harsh
remedy, courts will give the tenant a reasonable time of an
additional 4 weeks for the tenant to pay rent.
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:
DOCTRINE OF WASTE
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Doctrine of Waste
A “waste” in legal language, is any
alteration or damage to land by an
occupier of the land and can be brought to
court to address the change in condition.
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1. PERMISSIVE WASTE
- Occupier allows the land to fall into disrepair.
- Permissive waste refers to an injury caused by an
omission, rather than an affirmative act, on the part of the
tenant.
- It results from a tenant's failure to make normal repairs to
property so as to protect it from substantial deterioration.
- For example, a tenant permitting a house to fall into
disrepair by not making reasonable maintenance repairs
commits permissive waste.
- Permissive waste in houses is punishable where expressly
bound to repair, or where s/he is so bound on an implied
covenant.
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2. VOLUNTARY WASTE
- Voluntary waste is waste caused by willful destruction or carrying
away of something attached to the property. It is a deliberate and
active change to the property.
- It involves some positive act of injury to the property, thereby
diminishing its value for the person next in succession.
- For example, if the tenant of an apartment removes kitchen
appliances that are attached to the apartment floors and walls it
amounts to voluntary waste.
- Landlords usually protect against this type of voluntary waste by
requiring a security deposit from the tenant at the commencement of
the lease. This deposit can be used to repair the damages caused by
the tenant. However, if the damage exceeds the deposit, the landlord
may file an action seeking damages for the repairs not covered by the
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deposit.
3. EQUITABLE WASTE
-
-
Waste by an occupier, which is so serious that it
will be restrained in equity, because it is an act of
‘wanton destruction’
A tortious act of harm to the reversionary interest
in land that a prudent person would not so cause.
It consists of acts of gross damage. It is an
aggravated form of voluntary waste.
4. AMELIORATING WASTE
Waste that improves the land.
-
-
An improvement to an estate that changes the physical
character of the property.
A claimant is likely to be unsuccessful in its claim for
damages when the property has been improved.
The court will only award an injunction if it sees fit.
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Assignment of
Lease Contract
:
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Consent to assignment
Owe contractual
liability to Landlord
Assigns all Interest to
assignee
Owe contractual
liability to main tenant
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ASSIGNMENT OF THE LEASE
An Assignment of Lease is the transfer of a party’s
entire interest and right in a lease to the new
replacement tenant, with the consent of the Landlord.
Assignment only transfers the rights/benefits to a new
tenant. The obligations remain with the previous tenant.
This simply means that the original Tenant (Assignor)
still retains his obligations to pay the rent under
the contract.
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Novation of
Lease Agreement
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Consent to Novation
Assigns Interest and
obligations to new tenant
New tenant signs new lease with landlord, owe liability to landlord
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NOVATION
A Novation transfers both the rights and
obligations under the contract to another party.
A Novation may be executed in a situation where
an existing tenant transfers all the tenancy rights
and obligations to an incoming, replacement
tenant, with the consent of the Landlord.
A Novation replaces the original party with a new
party. A new, enforceable contract need be
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created
Sublet of
Leased Property
:
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Consent to subletting
Owe contractual
liability to landlord
Assigns part interest and
retain part interest
Owe contractual
liability to main tenant
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SUBLETTING OF THE LEASE
In sub-letting, the tenant relinquishes only some part of
the leased property.
Tenant will still be responsible to the landlord in terms
of his lease obligations and for what the subtenant does.
The landlord does not have any legal privity with the
sub-tenant except for giving approval for the sub-letting.
The landlord will hold the tenant responsible of any
wrong doing of the sub-tenant.
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PRIVITY OF CONTRACT
Principle of privity states that only parties
to contract can sue and be sued on contract
Based on privity of contract principle, only
contractual parties can use the contract to
sue each other.
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PRIVITY OF ESTATE
- Situations where it is possible for third
party whose name is not in the contract but
has interest in the property to sue based on
the contract
- E.g. Buyer who buys with tenancy: Law
binds the new landlord and tenant via Privity
of Estate
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Question:
Which of the following situation(s) terminates
a lease?
a) On expiry of the lease period
b) When a tenant passes away
c) When the property is compulsorily acquired
by the State
d) All of the above
Question:
Cici has a 5-year lease for a 3-bedroom
apartment. She only uses 2 bedrooms and has
a spare bedroom, she can do the following:
a) Assign the bedroom to another person,
subjected to landlord’s approval
b) Sublet the bedroom to another person,
subjected to landlord’s approval
c) Rent out the extra bedroom without approval
d) She cannot do any of the above
Question:
Which of the following describes a lease?
a) A right of use
b) A right of way
c) Proprietary rights
d) Rights in personam
Question:
Which of the following may not bind future
purchaser of land?
a)
b)
c)
d)
Easement
Tenancy agreement
Right of view
Right of entry
REVISION 9
LAW OF AGENCY
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Gives AUTHORITY to
his agent
•
•
•
•
Introduce third party
Negotiate and communicate
Purpose of real estate transaction
With commission received
TYPES OF AGENCY APPOINTMENT
The common types of agency
appointment are:
- Non exclusive agency (Open
listing): owner is open to deal with
any agent who can introduce him
buyers or tenants.
- Sole agency: owner appoints
only one agent, but owner reserves
the right to market the property
himself. No commission to agent if
owner sell it themselves.
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TYPES OF AGENCY APPOINTMENT
- Exclusive agency: owner
appoints only one agent to
market the property.
If owner were to sell the property
himself or through another
agency, there must be
compensation to the exclusive
Agent.
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Creation
of Agency
CREATION OF AGENCY
Agency relationship cannot be created unilaterally.
➢
➢
It must be bilateral; ie. Both parties must
consent
Principal allows the agent to represent him
and to be bound by contracts entered into
on his behalf by the agent.
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1. AGENCY BY CONSENT/AGREEMENT
This is the most common method by which an agency
relationship comes into being between estate agents and
their principals. Consent may be express or implied.
An agency can be expressly created by agreement either
orally or in writing.
Oral and implied contracts of agency is difficult to
enforce.
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2. AGENCY BY ESTOPPEL (OR 'HOLDING OUT')
Agency by estoppel arises when:
1) Principal represented to third party that the
person is the agent
2) Third party relied on this representation
3) Suffers detriment
Agency does not arise by estoppel if it is the
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3. AGENCY BY RATIFICATION
Ratification only validates (makes valid) past acts of the
purported agent. It gives no authority for the future.
- The principal must have been in existence at the
time of the agent's act.
- The principal must have the legal capacity to make
the contract himself, both at the time the act was
carried out and at the time of the purported
ratification.
- The agent must, at the time of making the contract,
either name or sufficiently identify the principal
on whose behalf he is making the contract.
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- The principal must ratify the contract within a
reasonable time
- Ratification must be for the entire contract (ie the
principal cannot just select such parts of the contract
as he considers to be to his advantage).
- Clear intention of ratifying, either by express words
or by conduct, such as refusing to return goods
purchased for him by an agent who lacked authority.
Mere passive inactivity will not amount to ratification.
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4. AGENCY OF NECESSITY
Agency by necessity enables the agent to act on behalf
of the principal without receiving authorization of the
principal in order to prevent harm to the principal. Such
a relationship is recognized by the legal system
- No practical way of contacting principal
- Some form of pressing needs
- Acted in good faith
- Actions were reasonable and prudent
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-
-
For example, if an individual becomes suddenly ill
and is incapacitated to the extent of being unable
to make decisions, then a family member
or lawyer can be appointed to make decisions on
behalf of the individual through agency by
necessity.
Individuals can also be appointed as agents
through agency by necessity in the event of the
possibility of incapacitation.
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AGENT’S AUTHORITY
The contract made by the agent is binding on the
principal and the other party only if the agent was
acting within the limits of his authority from his
principal.
3 sources of authority:
- Actual express authority
- Actual implied authority
- Ostensible or apparent authority
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If you want to renew
the lease of my office,
go and see Tom, my
agent
Landlord
But Landlord has not even
appointed Tom yet as his property
agent.
Here the Landlord gives the
impression to his tenant that Tom
was his agent, when in fact, Tom was
not even appointed yet by her.
This is known as ostensible or
apparent authority.
BREACH OF WARRANTY OF AUTHORITY
Agent is in breach of warranty of authority
when he enters into a contract with a third
party (for and on behalf of a principal)
where he has no authority to do so. Third
party can sue the agent for any damages.
FIDUCIARY DUTIES OF
PROPERTY AGENTS
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1. DUTY TO ACT OR PERFORM
THE CONTRACT OF AGENCY
- Under duty to act for the benefit of his
principal in the way which he has been
commissioned to do.
- If it is or becomes impossible to carry out
what he has been commissioned to do, he
must inform his principal accordingly.
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2. DUTY TO OBEY THE PRINCIPAL'S INSTRUCTION
- Agent is bound to obey the instructions of
his principal.
- Obligation only extends to instructions
which are reasonable, lawful and which fall
within the agency agreement.
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3. DUTY TO EXERCISE
REASONABLE CARE AND SKILL
- Agents must also exercise reasonable care and skill in
doing what they have undertaken
- Must display qualities which are generally associated
with those involved in the real estate agency business,
although the standard of care may be higher where
the agent has held out that he has some special
competence and has been paid to exercise that
competence on behalf of his principal.
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➢
Failing to obtain the best price for the seller
because of failure to inform the seller of a
better offer. This duty to disclose a better offer
applies so long as the contract has not been signed.
No withholding of offers.
➢ Negligently misinforming prospective
purchasers about the characteristics of a
property. The purchaser must show that he
relied on what the agent has told him, and it
must be within the scope of the agent's ordinary
business".
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4. DUTY NOT TO DELEGATE
- Agent has a duty to perform personally
what he has undertaken to do and not to
delegate his function unless specifically
authorised by the principal
- Actions of a sub-agent, whose appointment
has not been authorised, is the responsibility
of the agent alone.
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5. DUTY TO ACT HONESTLY
(FIDUCIARY DUTIES)
An agent must act in good faith and
honesty when discharging his act in the best
interests of his principal alone.
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Where any potential conflicts-of-interest arises
(between the principal's interests and the agent’s,
or a third party's), agent must make full and frank
disclosure to the principal of all relevant facts,
so as to give the principal an opportunity to decide
whether or not to continue with the
proposed transaction or with the employment of
the agent.
Otherwise, the principal may sue for any profit
the agent has made, or for any loss the principal has
suffered.
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Examples of the duty to act honestly general include:
➢ Not acting for both parties to a transaction.
➢ Not making a secret profit e.g. by receiving
commission from the third party, bribes, or
discounts.
➢ Disclosing all material facts. For example, he should
not sell his own property to the principal and should
not purchase his client's property in his own name or
that of a nominee without giving full disclosure.
➢ Not misusing or disclosing information
acquired by him as agent or by means of
opportunities which has as agent.
"Misuse" includes using the information for his
own benefit or the benefit of another client
without the original client's consent.
This applies even if the agent is no longer
engaged by the original principal.
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➢ Disclosing conflicts of interest;
➢ Accounting for all monies received on
the principal's behalf e.g. option monies
etc. where an agent has multiple clients,
the agent's duty to each of them cannot
require him to disclose information
confidential to another client.
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DUTIES OF AN AGENT
TO THIRD PARTIES
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1. DUTY NOT TO MISREPRESENT
HIS AUTHORITY
Agent has a duty not to misrepresent
his authority innocently, negligently or
fraudulently.
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2. DUTY TO ACT HONESTLY
Where a defect is hidden knowingly from a third party,
the agent may be liable for fraud.
In order for fraud to be actionable, there must be a
representation of a material fact (not opinion) which is
false, or known to be false, or made in culpable
ignorance of its truth or its falsity.
This representation must be reasonably relied upon by
the third party, and leads to injury to him.
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3. DUTY TO EXERCISE CARE AND SKILL
Agent must exercise due care and skill,
e.g. in ensuring accuracy of the information
he provides, or he may be liable for
negligence.
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RIGHTS OF AN ESTATE AGENT
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1. RIGHT TO REMUNERATION
Agent is only entitled to remuneration for his services as
an agent, if the terms of the agency agreement provides.
Subject to any special terms in the agency agreement,
where the remuneration of an agent is a commission on
a transaction to be brought about by the agent, the
agent is not entitled to such commission, unless his
services are the effective cause of the transaction being
brought about.
The agent's action and services must not have been
merely incidental.
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2. RIGHT TO REIMBURSEMENT
AND INDEMNITY
As a general rule, an agent has a right to be
reimbursed by his principal for all expenses and to be
indemnified against all losses and liabilities incurred by
him in the performance of his duties to the principal.
However, property agents are straight-commissionagents and would not be reimbursed for any expenses
incurred, if he should fail to close the deal(s).
Termination
of Agency
TERMINATION OF AGENCY
1.
2.
3.
4.
5.
6.
7.
Agreement
Expiry
Performance
Revocation
Renunciation
By Notice
By operations of law
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Question:
The tenant contacted the landlord’s agent to exercise his
option to renew. The landlord is aware of this and did not
object. Tenant proceeded to pay deposit for renewal to the
agent. Could the landlord later deny the agency
relationship?
a) Yes, the appointment of that agent was only for the initial
lease period
b) Yes, the agent has breached the warranty of authority
c) No, the owner has ratified the agency relationship by
keeping quiet
d) No, the owner is estopped from denying the agency
relationship because he represented to agent that the
agent is still representing him
Question:
Landlord appoints agent to rent his condo unit
without specific instructions that the rental should be
at least $5000. The agent proceeded to negotiate with
potential tenant and accepted a deposit of $4,000.
Can landlord deny this tenancy?
a) Yes, because the rental is too low
b) Yes, because agent has no rights to accept on
landlord’s behalf
c) No, the agent has authority to negotiate and accept
offers on behalf of the landlord
d) Yes, the agent breached the warranty of authority
Question:
Owner signed Estate Agent Agreement to
appoint Peter as agent. Agent made fraudulent
misrepresentation to the buyer and induced
the buyer to enter into contract. Owner is :
a) Liable to buyer
b) Not liable to buyer
c) Liable only if owner is present during this
misrepresentation
d) Liable only if owner is aware of this
misrepresentation
Law of
Tort
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LAW OF TORT
- Tort: a civil wrong which does not depend
on an agreement between the parties.
- Arises in situations where the law holds
one party responsible to another party.
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DEFINITION OF NEGLIGENCE
Negligence is a tort which targets a breach of duty by
one person to another.
Elements of negligence are:
- A duty of care (Neighbour or proximity principle)
- Breach of that duty (Objective test)
- Causation (But for test)
- Damages must not be too remote as a consequence
of the breach.
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DEFENCES FOR NEGLIGENCE
3 defences which may be raised against an
action for a claim of damages resulting from
negligence of the defendant are:
- Contributory Negligence
- Volenti Non Fit Injuria
- illegality
1. CONTRIBUTORY NEGLIGENCE
This applies to cases where a plaintiff/claimant
has, through his own negligence, contributed to
the harm he suffered.
Therefore, the claimant's damages would e
reduced in accordance with the percentage of
contribution made by the claimant to the loss or
damage suffered.
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2. VOLENTI NON FIT INJURIA
VOLENTI NON FIT INJURIA is a Latin for "to
the willing person, no injury is done“
If someone willingly places themselves in a
position where harm might result, knowing
that some degree of harm might result,
they will not be able to bring a claim
against the other party in tort.
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3. illegality
Ex turpi causa non oritur actio (Latin phrase
which means "from a dishonorable cause, an
action does not arise").
This is a legal doctrine which states that a
plaintiff will be unable to pursue legal remedy,
if it arises in connection with his own illegal
act.
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Ex turpi causa is also known as the
illegality defence,
since a defendant may plead that even
though, for instance, he conducted himself
negligently,
nevertheless a claimant, by reason of his
own illegality, cannot sue.
In the law of tort, the principle
would prevent a criminal from
bringing a claim against a fellow
criminal.
For example, if two burglars, Andy
and Bob, agree to open a safe by
means of explosives, and Andy so
negligently handles the explosive
charge as to injure Bob, Bob might
find some difficulty in maintaining an
action for negligence against Andy.
Type of negligence
Professional Negligence: Breach of Duty of
Care
Negligent Misrepresentation: Giving wrong
factual information carelessly.
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REMEDIES FOR BREACH OF
DUTY OF CARE
➢ Damages
➢ Law of negligence awards
compensation based on culpability
meaning who is at fault.
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