RES exam question on Private Property Sale: order of applying the sale proceeds

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

A seller is selling his private property for $900,000. He has an outstanding bank mortgage of $400,000 and has withdrawn $200,000 from his CPF Ordinary Account (principal and accrued interest). Which correctly describes the order of applying the sale proceeds?

ACPF refund is made first, then the outstanding mortgage is discharged, and the seller receives the balance
BThe seller receives the net balance first, and he then pays CPF and the bank out of those funds
CThe mortgage is discharged first, then the CPF refund is made, and the seller receives the balance
DCPF and the bank are paid at the same time, in equal proportions, out of the sale proceeds

Show answer & explanation

Answer

C. The mortgage is discharged first, then the CPF refund is made, and the seller receives the balance

Explanation

At completion, the bank mortgage is discharged first (the bank holds a registered charge over the title). The CPF Board then receives the refund of principal withdrawn plus accrued interest. The remaining balance goes to the seller. This order is determined by the bank's priority as a registered chargee and the CPF charge lodged against the property.

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

Practise more Sale of Private Properties (New, Resale & En Bloc) questions

Drill the full Sale of Private Properties (New, Resale & En Bloc) bank with instant answers and explanations — free to start, no card needed.

Practise Sale of Private Properties (New, Resale & En Bloc) →More sample questions

Related Sale of Private Properties (New, Resale & En Bloc) questions

Get each day's lesson free — one RES topic + the trap, every day on Telegram.

Join @resprepsg →

Original study material mapped to the public CEA RES syllabus. Verify any rate-based figures against current IRAS/CPF/MAS rules before relying on them.