SALE AND PURCHASE
Sale and purchase process
The purchaser's solicitors will carry out a title search at the land-register
The following is a summary of the legal due diligence process that is undertaken when acquiring commercial real estate in Singapore:
(a) The purchaser's solicitors will carry out a title search at the land-register. Search fees at the land-register are nominal and results can be obtained almost instantly;
(b) The purchaser's solicitors will also usually send legal requisitions to the following Government agencies as follows:
- National Environment Agency - Environmental Health Department;
- National Environment Agency - Central Building Plan Department;
- Public Utilities Board - Water Reclamation (Network);
- Inland Revenue Authority of Singapore;
- Land Transport Authority (S&L Department) - Rapid Transit System;
- Land Transport Authority (S&L Department) - Street Works;
- Building and Construction Authority; and
- Urban Redevelopment Authority.
If any of the replies from the relevant Government agencies to the legal requisitions on the property is unsatisfactory, and the vendor is unable to regularise the unsatisfactory matters disclosed in the replies, the purchaser will usually have the right to annul the transaction under the sale contract terms;
(c) The purchaser's solicitors may conduct further due diligence by requesting additional information from the vendor's solicitors (e.g. whether there are any unregistered documents affecting the property such as tenancy agreements or trust arrangements);
(d) If there are defects in title, such as missing documents or suspected unauthorised building works or other encumbrances, the vendor will need to respond to, or rectify those deficiencies in order to prove good title;
(e) As part of technical due diligence, the purchaser may also engage a surveyor to inspect the physical condition of the property, conduct a survey of the title boundaries, identify whether there are any encroachments affecting the property and ascertain if the fixtures and equipment expressed to be sold are in fact existing and functional as these matters may also affect the valuation of the property;
(f) In respect of strata sub-divided properties, the purchaser's solicitors will also seek confirmation from the relevant management corporation that there are no outstanding management fees or breach of the existing by-laws by the vendor;
(g) Completed properties are typically sold on an "as-is where-is" basis with very limited warranties given on the property; and
(h) If the property transaction is to be effected via a share sale, then corporate due diligence may be necessary as the company may have other existing liabilities not contemplated by the purchaser.
The purchaser may also engage a surveyor to inspect the physical condition of the property
- Legal due diligence may not reveal any unauthorised building works, which may expose the purchaser to further liability.
- It is also important to pay attention to unregistered interests such as tenancies, uncrystallised floating charges and other interests arising from resulting or constructive trusts that may not be found from the land search records obtained from the land-register and which might not have been disclosed by the vendor.
- The Master Plan in Singapore sets out the designated uses of land.
- Some uses need permission of the Urban Redevelopment Authority and/or the Building and Construction Authority before building works can commence. Certain approvals are given on a temporary basis and may not be renewed.
- Development works must not commence without first submitting the outline applications and obtaining the planning approval from the Urban Redevelopment Authority.
- A new building cannot be occupied unless a temporary occupation permit has been issued by the Building and Construction Authority.