New rules post challenges for developers

The majority of developers are ready to comply with the new rules set to begin this Friday requiring them to be more transparent when marketing projects.

However, some are finding it hard to prepare given the limited time after the change was announced a month ago. Media reports noted that while developers are not likely to face major challenges, the transition could complicate the sales process.

Developers will have more paperwork to settle, particularly for projects where units are left unsold when the change is implemented. They will require two versions of the sales and purchase agreements and options to purchase; one will be for sales before 18 May and the other is for after the period. Both also have different contractual obligations.

Even if only a few units remain unsold in a project, developers will still need new documents for all sales beginning Friday.

The Urban Redevelopment Authority (URA) amended the Housing Developers Rules last month requiring developers to provide buyers with complete written information on their projects and units before issuing the option to purchase.

According to a spokesman for CapitaLand Residential Singapore, the developer has adopted best practices in the past, hence it would not see any major challenges complying with the new rules.

“We will work with our various project consultants to compile and present the required information in the clearest and most concise manner possible, whether in the form of text or diagrams, so as to help our home buyers make better informed decisions,” he said.

But another developer said that the tight deadline could pose a challenge. “We have quite a number of projects that are affected and many of these projects are handled by the same consultants, so it means they have to work extra hard to meet the deadline.”

Others said that certain rules are ambiguous and might create confusion.

Source : PropertyGuru – 16 May 2012


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