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RES exam question on Private Property Sale: Mr Chen is buying a unit off plan in a 120-unit private condominium

HardSale of Private Properties (New, Resale & En Bloc) · Paper 2

Mr Chen is buying a unit off plan in a 120-unit private condominium. The developer grants him an option to purchase on 3 March against a booking fee of $180,000 on a price of $1.8 million. His salesperson checks four points under the Housing Developers (Control and Licensing) Act 1965 and its rules. (i) The developer needs a licence from the Controller of Housing to carry on this housing development. (ii) If Mr Chen lets the option lapse, the developer may keep the whole of the $180,000. (iii) A company building three terrace houses for sale needs the same licence as this developer. (iv) A booking fee of 10% of the price is within the range the Housing Developers Rules allow. Which of the statements are correct?

  1. A(i), (iii) and (iv) only
  2. B(ii) and (iii) only
  3. C(i), (ii) and (iv) only
  4. D(i) and (iv) only
Show answer & explanation

Answer

D. (i) and (iv) only

Explanation

Answer: (i) and (iv) only. The developer needs a licence for more than 4 units, and a 10% booking fee is within the allowed range.(i) True. Housing development means developing more than 4 units of housing accommodation. At 120 units, the developer needs a licence from the Controller of Housing.(iv) True. The booking fee must be not less than 5% and not more than 10% of the price. $180,000 is exactly 10% of $1.8 million.Rule: Developing more than four units of housing for sale needs a developer's licence. The booking fee is 5% to 10% of the price, and a buyer who lets the option lapse forfeits a quarter of it.Source: Housing Developers (Control and Licensing) Act 1965, ss 2 and 4(1), as at 1 October 2026 (sso.agc.gov.sg); Housing Developers Rules, rule 8; prescribed option form; /learn/sale-of-uncompleted-new-launch

Why the other options are wrong

  • (ii) False. If the option lapses, the developer may forfeit only 25% of the booking fee, $45,000, and must refund the other 75%.
  • (iii) False. Three houses do not exceed the four-unit threshold, so this is not a housing development.

Study the concept behind this question: Sale of Uncompleted Private Property (New Launches)

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