Buying a property in Singapore, be it an HDB flat or a condominium, is a significant milestone for many. While the thrill of finding your dream home is exciting, it’s equally important to understand the legal process that follows: conveyancing. This guide, tailored for Singaporean buyers, will demystify conveyancing, its importance, and its role in your property transaction journey.
All you need to know about legal conveyancing when buying property
What is Conveyancing?
Conveyancing refers to the legal process of transferring title in a property from one person to another. This stage, which takes an average of 12 weeks, is very important to get right as the purchase of a property is likely to be the most expensive purchase you’ll make in life.
To ensure that their interests are protected, sellers and buyers are advised to engage a lawyer for advice on how to proceed, assist with the necessary checks, and liaise with other parties, including the Central Provident Fund (CPF), Singapore Land Authority (SLA), Housing Development Board (HDB) and the Inland Revenue Authority of Singapore (IRAS).
If you’re buying a private property: The conveyancing process happens after your offer to purchase the property and the cheque for the Option fee has been accepted by the seller.
If you’re buying a HDB flat: The Housing Development Board acts as your legal representative if you’re not using a bank loan for the purchase.
If you’re using a bank loan to finance the flat purchase: You’ll have to engage a private law firm to represent you as the buyer for the conveyancing.
Conveyancing and the Law of Property Act
The entire conveyancing process is governed by the Law of Property Act, which outlines the legal requirements and procedures for property transactions in Singapore. Your lawyer will ensure that all aspects of the transaction adhere to the Act, protecting your rights and interests.
The Legal Conveyancing Process in Singapore
1. Option to Purchase (OTP)
Upon agreeing on a price, you’ll exercise the OTP, signifying your intention to purchase the property.
For private property buyers, the OTP usually needs to be exercised within 14 days from the date of issue. This period can be negotiated and so can be longer.
For HDB transactions, the procedures to enter into a contract using the OTP is here.
2. Engage a Lawyer
Secure the services of a conveyancing lawyer who will guide you through the legal intricacies. When choosing a law firm, you’ll have to consider these factors:
- When you receive a quote from a law firm, be sure that it applies to the full transaction and includes items such as mortgage stamping, CPF fee, Law Society fee and GST.
- You should also receive a clear timeline of the process with a list of deadlines up until completion.
- Ohmyhome provides legal conveyancing service which starts at $1,800.
3. Title Search
Your lawyer will conduct a thorough title search to verify the following:
- If the property is a freehold or leasehold, and the total length of the lease and how many years remain on it;
- If it has any encumbrance, such as an outstanding mortgage on the property, or protected by caveats, which is a legal document lodged with the SLA by a person with an interest in property (or land);
- The names of the owners of the property;
- The manner of ownership holding, that is if there are multiple owners of the same property, whether they own the property as joint tenants or tenants-in-common.*
*Joint tenants have equal interests in the flat regardless of the proportion of their contribution to the purchase of the property, while tenants-in-common own the property in proportion to their contributions towards its purchase.
3. Caveat Lodgement
A caveat is lodged with the SLA to protect your interest in the property.
The rest of the downpayment for the property, a minimum 4% of purchase price, will be due at this stage. The monies used to make this payment will be collected from the buyer by his or her lawyer and placed in a conveyancing account that is used to pay the seller. This account can be:
- An account, called a conveyancing account (CVY), opened by the lawyer’s law firm to receive such monies;
- The Singapore Academy of Law’s Conveyancing Money Service; or
- An escrow account jointly owned by the buyer and seller’s lawyers.
The lawyer will also proceed to send out formal enquiries to the Public Utilities Board, the Land Transport Authority, IRAS, and National Environment Agency, among others, to ensure that the property is not affected by the latest planning decisions by the government or any other outstanding issues that would affect the property’s title from being transferred successfully. Only when all requisitions have come back with no problems should the sale proceed to completion.
4. Payments
Your lawyer will handle payments, including the remaining down payment and subsequent stamp duties.
As for the payments you’ll make to your lawyer: Conveyancing fees vary depending on the property type (HDB or private), purchase price, and complexity of the transaction.
HDB Conveyancing Fees
| Flat Type | Legal Fees (Approx.) |
|---|---|
| 2-Room/ 3-Room | $1,600 – $2,000 |
| 4-Room/ 5-Room | $1,800 – $2,200 |
| Executive/ Multi-Gen | $2,000 – $2,500 |
Note: These are approximate fees and may vary depending on the law firm and specific circumstances.
5. Legal Checks
Your lawyer will conduct various legal checks and inquiries to ensure the property’s compliance with regulations and absence of outstanding issues.
6. Taking Possession and Transfer of Title
When the property is ready to be transferred, the seller will give vacant possession – a state that’s fit for occupation – to the buyer.
Once everything is in order, the seller will hand over the keys of the property to the buyer in exchange for the remaining 95% of the agreed price. The 4% deposit will also be released by the intermediary to the sellers.
The seller’s lawyer will also hand over the transfer documents to the buyer’s lawyer to allow the latter to apply for the Certificate of Title with the SLA.
7. Completion
Once all checks are satisfactory, the property is transferred to your name, and you’ll receive the keys to your new home.
This completes the entire transaction.
According to a recent survey, 95% of buyers who engaged a lawyer for conveyancing reported feeling more confident and secure throughout the process.
Understanding conveyancing empowers you to navigate your property purchase with confidence. By partnering with a qualified lawyer and adhering to the legal process, you can ensure a smooth and successful transaction, marking the beginning of your exciting journey as a homeowner in Singapore.
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Frequently asked questions about legal conveyancing
Do I need a lawyer for conveyancing?
While not mandatory, engaging a lawyer is highly recommended to navigate the legal complexities and protect your interests.
When do I pay conveyancing fees?
Typically, a portion of the fees is paid upon engaging the lawyer, and the remaining balance is settled upon completion.
How long does the conveyancing process take?
The process usually takes about 10-12 weeks, but it can vary depending on the complexity of the transaction.
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