Buying a Resale Condo in Singapore: A Complete Legal Checklist
Buying a resale condominium in Singapore involves considerably more than agreeing on a price and signing an Option to Purchase.
Before completing the purchase, a buyer should consider the property's title, financing, CPF usage, stamp duties, ownership structure, existing tenancies, completion timeline and the terms of the sale contract.
Once an Option to Purchase has been exercised, you are generally contractually committed to the purchase. It is therefore important to understand the legal and financial implications before exercising the Option.
This guide provides a practical legal checklist for buyers purchasing a resale condominium in Singapore.
1. Check Your Budget Before Making an Offer
Before committing to a resale condo, work out the total amount required for the purchase.
The purchase price is only one component.
Depending on your circumstances, you may need to budget for:
the option fee;
the balance deposit when exercising the Option to Purchase;
Buyer's Stamp Duty ("BSD");
Additional Buyer's Stamp Duty ("ABSD"), if applicable;
legal fees and disbursements;
bank valuation fees;
mortgage-related expenses;
CPF requirements;
renovation costs; and
maintenance contributions and other property-related expenses.
You should also determine how much cash, CPF and bank financing will be available for the transaction.
2. Obtain In-Principle Approval for Your Housing Loan
If you require financing, consider obtaining an In-Principle Approval ("IPA") from a bank before committing to the purchase.
An IPA gives you an indication of how much the bank may be prepared to lend, although it is not necessarily a final or unconditional loan approval.
Your eventual loan amount may depend on matters including:
your income;
existing debts;
applicable financing rules;
your age and loan tenure;
the bank's valuation of the property; and
the bank's credit assessment.
A common mistake is to assume that because you can afford the deposit, the bank will necessarily finance the remaining purchase price.
That should not be assumed.
3. Check the Property's Tenure
Determine whether the condominium is:
freehold;
999-year leasehold; or
99-year leasehold or another leasehold tenure.
For leasehold properties, check the commencement date of the lease and the remaining lease term.
The remaining lease may affect matters such as financing, CPF usage, future marketability and resale value.
4. Decide How the Property Will Be Owned
If two or more people are purchasing the condominium together, decide how you intend to hold the property.
The two common forms of co-ownership are:
Joint Tenancy
Under a joint tenancy, the owners hold the property jointly.
A significant feature is the right of survivorship. If one joint tenant passes away, his or her interest generally passes to the surviving joint tenant or joint tenants.
Tenancy-in-Common
Under a tenancy-in-common, each owner holds a distinct share in the property.
For example:
Buyer A – 50%
Buyer B – 50%
or:
Buyer A – 99%
Buyer B – 1%
A tenant-in-common's share does not pass automatically to the other co-owner through the right of survivorship.
The choice between joint tenancy and tenancy-in-common can have important estate-planning and succession consequences.
Discuss the manner of holding with your conveyancing lawyer before completion.
5. Understand the Option to Purchase
Most resale private property transactions in Singapore involve an Option to Purchase ("OTP").
The seller grants the buyer an option to purchase the property at an agreed price.
The OTP should specify important terms including:
the purchase price;
option fee;
deadline for exercising the Option;
amount payable upon exercise;
completion date or completion period; and
any special conditions agreed between the parties.
Do not treat the OTP as a mere administrative document.
It is a legally significant document that determines the terms on which you may become contractually bound to purchase the property.
6. Check the Option Exercise Deadline Carefully
An OTP is generally valid only for the period stated in the document.
If you wish to proceed, you must exercise it in accordance with its terms before the deadline.
Do not leave this until the last minute.
You will usually need sufficient time to:
appoint a conveyancing lawyer;
arrange financing;
arrange the exercise monies;
consider the contractual terms; and
sign the required documents.
Missing the deadline can have serious consequences, including the loss of the opportunity to purchase the property and potentially the option fee, depending on the contractual terms.
7. Have a Conveyancing Lawyer Review the Transaction
Once you have received the OTP, you should appoint a conveyancing lawyer promptly.
Your lawyer will handle the legal aspects of the transaction, which may include:
reviewing the OTP;
conducting property searches;
investigating title;
liaising with the seller's solicitors;
advising on the manner of holding;
dealing with CPF requirements;
dealing with the bank's mortgage documentation;
arranging stamp duty;
preparing or reviewing conveyancing documents;
conducting completion searches; and
completing the transfer of ownership.
Where possible, obtain legal advice before exercising the OTP, particularly if there are unusual or specially negotiated terms.
8. Conduct a Title Search
Your conveyancing lawyer will generally conduct a title search to verify the legal ownership and title particulars of the property.
The title search may reveal information such as:
the registered proprietor or proprietors;
the manner in which the property is held;
registered mortgages;
caveats;
restrictions; and
other registered interests affecting the property.
You should ensure that the person selling the property has the legal capacity and authority to do so.
9. Check for Existing Mortgages and Encumbrances
The seller may still have an outstanding housing loan secured against the condominium.
This is common and does not, by itself, prevent the sale.
The seller's existing mortgage will ordinarily need to be redeemed and discharged as part of completion so that the buyer receives the property in accordance with the contractual terms.
Your lawyer's title investigation and conveyancing work will address the relevant registered interests.
10. Check Whether the Property Is Sold With Vacant Possession
This is particularly important for resale condominiums.
Ask whether the property is:
owner-occupied;
vacant; or
tenanted.
If you are buying the property for your own occupation, the OTP should provide for the property to be delivered with vacant possession, where that is the agreed arrangement.
If the property is currently tenanted, check whether the tenancy will end before completion.
Do not simply rely on an oral statement that "the tenant will move out".
The contractual position should be clear.
11. If Buying With an Existing Tenancy, Review the Tenancy Agreement
Some buyers intentionally purchase a condo with an existing tenant.
If the purchase is subject to an existing tenancy, obtain and review the tenancy agreement.
Check matters including:
the tenant's identity;
monthly rent;
commencement and expiry dates;
security deposit;
renewal provisions;
termination provisions;
inventory;
outstanding obligations; and
whether there are any disputes with the tenant.
The OTP should clearly address how the existing tenancy is to be dealt with upon completion, including the transfer or accounting of the security deposit where applicable.
12. Check Your Buyer's Stamp Duty
A buyer acquiring residential property in Singapore will generally have to pay Buyer's Stamp Duty ("BSD").
BSD is calculated based on the higher of the purchase price or the property's market value, applying the prevailing rates.
Stamp duty rates can change.
You should therefore check the applicable rates at the time of your transaction rather than relying on an old online example.
Your conveyancing lawyer can advise you on the stamp duty payable for your purchase.
13. Check Whether Additional Buyer's Stamp Duty Applies
Depending on your profile and existing property ownership, Additional Buyer's Stamp Duty ("ABSD") may also apply.
Whether ABSD is payable and the applicable rate may depend on factors such as:
your citizenship or residency status;
the number of residential properties you already own;
whether you are purchasing jointly with another person; and
any applicable remission or exemption.
ABSD can be a substantial amount.
You should establish your ABSD position before committing to the purchase, rather than discovering the liability after exercising the OTP.
14. Check Whether You Can Use CPF
Eligible buyers may be able to use CPF Ordinary Account monies towards the purchase of a private residential property, subject to CPF rules.
CPF may potentially be used towards permitted payments such as:
part of the purchase price;
housing loan instalments; and
certain other approved housing-related payments.
However, CPF usage is subject to applicable limits and requirements.
Do not assume that your entire CPF Ordinary Account balance can necessarily be used for the purchase.
If your purchase depends heavily on CPF monies, establish the amount available for use early.
15. Understand the Cash Required
Even if you are using CPF and taking a housing loan, part of the purchase may need to be funded in cash.
The amount depends on the financing structure and applicable regulatory requirements.
Before exercising the OTP, work out:
Purchase Price
Less: Available Housing Loan
Less: CPF Available for Use
Plus: Stamp Duties and Transaction Costs
= Estimated Cash Requirement
You should maintain an additional buffer rather than budgeting to the last dollar.
16. Ensure Your Bank Loan Is Properly Arranged
An IPA is not necessarily the same as final loan approval.
After you decide to purchase a particular property, the bank may require additional documents and a valuation before issuing the formal loan documentation.
Your bank and conveyancing lawyer will need sufficient time to process the financing and mortgage documents before completion.
Respond promptly to requests for:
income documents;
identification documents;
CPF information;
signed facility documents;
insurance documentation, if applicable; and
other documents requested by the bank.
Delays in financing can jeopardise completion.
17. Check the Completion Date
The OTP will specify when completion is to take place or how the completion date is calculated.
On completion, the balance purchase price must generally be paid in accordance with the contract and the legal transfer of the property is completed.
Before agreeing to the completion timeline, consider whether you need to coordinate the purchase with:
the sale of your existing property;
redemption of an existing housing loan;
receipt of sale proceeds;
CPF refunds from another property;
your new housing loan;
renovation arrangements; or
moving dates.
Where a sale and purchase are interconnected, inform your lawyer as early as possible.
18. Check Maintenance Fees and Property Tax Adjustments
A condominium owner will generally be responsible for maintenance contributions to the Management Corporation Strata Title ("MCST").
As part of the conveyancing process, certain outgoings may have to be apportioned between the seller and buyer as at the completion date.
These may include matters such as:
property tax; and
maintenance contributions.
The exact adjustments depend on the transaction and relevant documentation.
19. Check for Unauthorised Renovations or Alterations
Before purchasing, inspect the property carefully.
If substantial alterations have been carried out, consider whether the necessary approvals were obtained.
This can be particularly relevant where the unit has:
altered internal layouts;
enclosed areas;
major structural modifications;
substantial additions; or
changes affecting common property.
Do not assume that every renovation carried out by a previous owner was necessarily approved.
Where there is a concern, raise it before exercising the OTP.
20. Inspect the Physical Condition of the Unit
Your conveyancing lawyer deals primarily with the legal aspects of the purchase.
Your lawyer does not ordinarily certify the physical condition of the property for you.
Buyers should therefore inspect the unit carefully before committing.
Consider checking:
water leakage;
ceiling stains;
plumbing;
air-conditioning systems;
windows and doors;
flooring;
built-in appliances;
electrical systems;
fixtures and fittings; and
signs of defects.
For older or high-value properties, you may wish to engage an appropriate professional to inspect the property.
21. Be Clear About What Is Included in the Sale
If you expect furniture, appliances or other items to remain in the property, ensure that this is properly documented.
Items might include:
refrigerators;
washing machines;
ovens;
lighting fixtures;
curtains;
built-in cabinetry;
air-conditioning units; and
loose furniture.
Disputes can arise when buyers assume that an item seen during the viewing is included but the seller removes it before completion.
Where an item is important to you, have it recorded in the contractual documentation or an agreed inventory.
22. Conduct a Final Inspection Before Completion
Where the contractual arrangements permit, buyers commonly inspect the property shortly before completion.
The purpose is to check matters such as whether:
vacant possession has been provided where required;
the property remains in the expected condition;
agreed fixtures and fittings remain;
the seller has removed belongings where required; and
any agreed rectification works have been completed.
Raise any issue promptly with your lawyer rather than waiting until after completion.
23. Understand What Happens on Completion Day
On completion, your conveyancing lawyer will coordinate the legal and financial completion of the transaction.
This generally involves:
payment of the balance purchase monies;
completion of the transfer;
dealing with the seller's existing mortgage where applicable;
completion of your bank mortgage, if you are financing the purchase;
release of the relevant completion documents; and
arrangements for possession or keys in accordance with the contract.
Your lawyer will thereafter deal with the necessary registration procedures.
24. Keep Your Conveyancing Documents
After completion, retain the important documents relating to your purchase.
These may become relevant when you:
refinance the property;
sell the property;
undertake estate planning;
change the manner of holding;
transfer an ownership share; or
deal with the property following divorce or death.
Resale Condo Legal Checklist
Before exercising the Option to Purchase, ask yourself:
☐ Have I calculated the total cost of the purchase?
☐ Do I have sufficient cash and CPF?
☐ Have I obtained an IPA or confirmed my financing?
☐ Have I checked the property's tenure?
☐ Have I decided between joint tenancy and tenancy-in-common?
☐ Have I appointed a conveyancing lawyer?
☐ Has the OTP been reviewed?
☐ Do I know the deadline for exercising the OTP?
☐ Have I checked my BSD liability?
☐ Have I checked whether ABSD applies?
☐ Have I confirmed my CPF usage?
☐ Do I know whether the property is tenanted?
☐ If tenanted, have I reviewed the tenancy agreement?
☐ Have I checked what fixtures and fittings are included?
☐ Have I inspected the condition of the property?
☐ Do I understand the completion timeline?
☐ Have I budgeted for legal fees and other transaction costs?
If the answer to any important question is "no", deal with it before becoming contractually committed where possible.
Common Mistakes When Buying a Resale Condo
Exercising the OTP Before Confirming Financing
Do not assume that a bank will lend the amount you require simply because you have sufficient funds for the initial deposit.
Failing to Check ABSD Before Buying
ABSD can significantly alter the economics of a property purchase.
Establish your liability before committing.
Assuming All CPF Savings Can Be Used
CPF housing usage is subject to applicable rules and limits.
Ignoring an Existing Tenancy
If you require vacant possession, ensure the contractual arrangements properly provide for it.
Not Checking the Completion Timeline
This is especially important if your purchase depends on the proceeds of another property sale.
Focusing Only on the Purchase Price
The true acquisition cost includes stamp duties, financing costs, legal expenses and other transaction costs.
Frequently Asked Questions About Buying a Resale Condo
Do I Need a Lawyer to Buy a Resale Condo in Singapore?
A conveyancing lawyer handles the legal transfer of the property and, where applicable, the mortgage, CPF and registration aspects of the transaction.
You should appoint your lawyer early, preferably before exercising the OTP where legal advice on its terms is required.
When Should I Appoint a Conveyancing Lawyer?
Ideally, once you are seriously considering exercising the OTP.
Do not wait until immediately before the exercise deadline.
Can I Use CPF to Buy a Resale Condo?
CPF Ordinary Account savings may be used for eligible private residential property purchases, subject to the prevailing CPF rules and limits.
Do I Have to Pay ABSD?
It depends on your circumstances, including your citizenship or residency status, existing residential property ownership and the identity of any joint purchaser.
What Is the Difference Between Joint Tenancy and Tenancy-in-Common?
Joint tenancy generally carries the right of survivorship.
Tenancy-in-common gives each owner a distinct ownership share which can form part of that owner's estate upon death.
Can I Buy a Condo That Already Has a Tenant?
Yes. However, you should understand whether you are purchasing the property subject to the existing tenancy or whether the seller is required to deliver vacant possession.
If the tenancy is continuing after completion, review the tenancy documentation carefully.
How Long Does a Resale Condo Purchase Take?
The timeline depends primarily on the terms of the OTP and the agreed completion period. Financing, CPF arrangements and other transaction-specific matters should be dealt with sufficiently early to meet the contractual completion date.
Buying a Resale Condo in Singapore?
A resale condominium purchase is a significant financial commitment.
Before exercising an Option to Purchase, buyers should understand not only the purchase price but also the legal, financing, CPF, stamp duty and completion implications of the transaction.
At YY Lee & Associates LLC, our conveyancing lawyers can assist with your resale condominium purchase from the review and exercise of the Option to Purchase through to completion and registration of your ownership.
We can assist with:
reviewing the Option to Purchase;
property title searches;
CPF usage;
bank financing and mortgage documentation;
Buyer's Stamp Duty and Additional Buyer's Stamp Duty;
joint tenancy and tenancy-in-common arrangements;
conveyancing documentation; and
completion of the purchase.