Extension of COVID-19 (Temporary Measures) Act: Legal Protection for Buyers and Home Developers



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Written by: Syasya Nur

Due to the economic impact of the COVID-19 pandemic, many property buyers have been unable to fulfil payments due to financial constraints. As a result, the Ministry of Law has been receiving feedback from buyers at risk of defaulting on booking fees and deposits.

Here’s some good news amid the crisis.

With the extension of the COVID-19 (Temporary Measures) Act, buyers with home purchase contracts from private developers or the Housing and Development Board (HDB) can now apply for temporary legal protection if they face difficulties in making payments. All they need to do is apply for a Notification for Relief (NFR).

What are the benefits of the Notification for Relief (NFR) Under the Temporary Measures Act extension?

After an NFR is served, developers cannot increase any charges or the interest rate unless changes were specified in the contract or were a result of a formula or reference rate. Developers are also not allowed to impose new charges under the contract or demand a security deposit from the non-performing party without their consent.

What are the 3 agreements covered by the Temporary Measures Act extension?

It covers persons who have entered three types of agreements:

  • Option to purchase (OTP) agreements
  • Sale and purchase agreements
  • Agreements for the lease of residential properties

Relief for OTP agreements

An OTP agreement is granted either by a private developer or the HDB. This covers a portion of the purchase price when the agreement is exercised. If the act was exercised for OTP agreements, the developer will be prohibited from withholding or forfeiting any part of the booking fee paid during the relief period.

Relief for sales and purchase agreements and agreements for lease

These agreements are granted by a housing developer to a buyer for the sale and purchase of residential property. If the act is exercised, the developer cannot terminate the agreement simply because the buyer or tenant is unable to make payments during the period covered.

How can you apply for the NFR?

Visit the Ministry of Law website for more details on applying for the NFR online.

Buyers should first consult their developers to seek an extension for payment. If both parties are unable to agree on the terms of extension, buyers should then apply for NFR under the extension.

In case both parties are unable to compromise even after the NFR is served, either one can make an application for an Assessor’s Determination. The assessor will then consider the situation of both parties and will achieve an outcome that is fair for everyone.

Can housing developers also apply for the NFR?

Housing developers may also face challenges in meeting contractual obligations due to COVID-19. In such circumstances, a housing developer may also serven an NFR on the other party serve a notification. Similar to the benefits that home buyers attain, developers would get contractual relief for 6 months. For this duration, they would be temporarily protected from being sued lest they are unable to meet the contract agreements. The NFR will be sent to the Ministry of Law for review.

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Find out how to transact your home during this period

Buying or selling your property during COVID-19?

Find out how to transact your home during this period

Buying or selling your property during COVID-19?


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