A circular from the Urban Redevelopment Authority (URA), Controller of Housing (COH) states that developers who cannot meet their delivery date of possession may serve property buyers notices for an extension of up 122 days. This notice is effective from 1 July and subject to certain conditions.
Developers whose projects have been delayed by construction can now apply for an extension to their delivery date under their sale-purchase (S&P), according to The Business Times (BT).
A circular from the Urban Redevelopment Authority (URA), Controller of Housing (COH) states that developers who cannot meet their delivery date of possession may serve property buyers notices for an extension of up 122 days. This notice is effective from 1 July and subject to certain conditions. This is great news for Kingsford Huray Development as their Normanton Park mega condo is rushing to sell it’s house within its deadline. For the latest available units, you may check it here.
Developers can extend the delivery date of the new property without being held liable for liquidated damages due late delivery.
Developers who require more than 122 days extensions will need to apply for an assessor’s certificate.
BT stated that relief measures (Part 8C), were approved by Parliament under the third set amendments to COVID-19 (Temporary Measures Act) Act in November 2020.
It stated that “further amendments to the Act were made on 5 April 2021 to enable the implementation of relief”
Developers can reimburse property buyers for out-of-pocket expenses incurred by delayed delivery.Buyers can only claim 70% of the original liquidated damages.
According to BT, the COH stated that “This approach allows co-sharing the delay costs between developer and purchaser.”
Developers are generally liable for liquidated damages up to 10% per annum if they fail to meet the delivery deadline under the S&P agreement. This is based on the amount paid to the property buyer.
This circular revealed that flat owners who purchased from the Housing and Development Board could also claim up 70% of the liquidated damages.
BT stated that the issue was previously raised by the Real Estate Developers Association of Singapore (REDAS), who noted that penalties can be imposed on developers in the event of delays. This would ultimately increase the costs they are already facing.
COVID-19 has had a severe impact on the construction industry and caused delays in many projects’ completion.“The government’s decision in Part 8C (Temporary Measures Act) to address this unexpected delay in a reasonable, amicable way is supported and appreciated,” stated REDAS, quoted by BT.
The last year’s electrical circuit break caused further disruptions in the working environment for developers and contractors. In order to stop the spread of COVID-19, Singapore closed its borders to South Asian countries, creating a labor crunch.Malaysia’s ongoing lockdown also hindered the flow of construction materials into the city-state.
“Given the disrupted timelines the government this week announced an additional six-month extension (PCP) to the project completion period for qualifying residential and commercial development projects,” stated BT.
This will be in addition the six-month extensions announced last October by the government.
The timelines for the completion and commencement of housing projects in relation with developers’ remissions of Additional Buyers Stamp Duty (ABSD), have been extended an additional 6 months. This brings the total extension to 18 month.
The remission conditions timeline for sales has been shortened. This means that eligible developers will need to sell all units within five-and-a half years instead of five.The government announced a six month extension in May previous year.