Property Conveyancing in Singapore: What You Need to Know

Conveyancing is the transfer of legal ownership of property from one person to another. While buying a property is an exciting — and expensive — decision, home buyers in Singapore must ensure that they devote sufficient attention to what’s no doubt the drier aspects of it: maintenance fees (for condos), property tax, stamp duty, and the conveyancing process.

Once you have decided on the location, price, and type of property you wish to purchase, the immediate next step is to find a good, responsible, and reliable lawyer (i.e. one you can easily approach and contact in case of any doubts or queries).  Considering that most private properties in Singapore are now above $1,000,000, it would be wise to pay a little above average in legal cost for a reliable and responsible lawyer. Otherwise, you may end up talking to the answering machine most of the time, as the lawyer or his secretary would be too swamped with many conveyancing files to answer your queries. As mastermind investor Warren Buffett pointed out: ‘’Price is what you pay. Value is what you get”.

So, what are the basic steps of conveyancing?

They are:

1. With an Approval-in-Principle (AIP) for a bank loan in hand and a property lawyer engaged, the buyer makes an offer to the seller for the property (see FAQ below on ‘When does a purchasing homeowner (i.e. the buyer) start the conveyancing process?’)
2. The seller, on accepting the offer, grants the buyer a contract called the Option to Purchase (OTP) in exchange for 1% option monies (option fee/deposit) from the buyer. From the OTP, the buyer is given a period of consideration of (usually two weeks, sometimes longer). During this period, the buyer may pay the balance of the deposit (i.e. 5% or 10% of the purchase price) if he/she wishes to proceed with the purchase. Should the buyer cannot exercise the option (i.e. make an offer) by the end of the time limit given by the seller, he/she stands to lose the 1% option fee.
3. During the period of consideration following the signing of the OTP, the buyer’s chosen lawyer will conduct some preliminary searches and checks on the property and seller. Meanwhile, the buyer will complete the home loan for the property with the chosen bank. If he/she cannot get a loan, it is would be advisable not to proceed with the purchase of the property as doing so would make the buyer liable for legal action for not being able to complete the purchase of the property on the stipulated completion date.
4. Besides the bank loan, the buyer can use his CPF monies and cash towards the purchase price. The mortgage banker will assist him in calculating his CPF usage, cash usage, and loan quantum. [Recommended article: Loan-to-value (LTV) limit: a Quick Guide for Property Buyers]
5. Once the home loan is approved, the buyer can now instruct his lawyer to exercise the OTP by submitting the duly signed option to purchase form and paying the deposit to the conveyancing account of the seller’s lawyer. This will cause a contract. The buyer’s lawyer will lodge a caveat (i.e. a caution) on the property with the Singapore Land Authority (SLA) to inform anyone of your interest in the property.
6. Throughout the process, the buyer and seller’s lawyers will do all that is necessary to protect their respective clients’ interests and also prepare all necessary documents for their respective clients to sign, such as the Sale & Purchase Agreement.
7. On completion date, all the duly executed legal documents and keys to property etc. will be handed over for the balance amount of the purchase price.
8. Thereafter, the buyer’s lawyer will register the change in ownership of the property with the SLA.
9. The buyer is now the proud owner of the new property.

Frequently Asked Questions about the property conveyancing process in Singapore:

Q1: When does a purchasing homeowner (i.e. the buyer) start the conveyancing process?

The conveyancing process starts from the time the buyer receives the OTP, or even before.  It is advisable and preferable for the buyer’s lawyer to vet the OTP before paying the 1% option monies so that the terms of the contract can be negotiated and agreed upon before the exchange of 1% option monies and OTP.

However, the current practice is for the buyer to make an “Offer to Purchase” together with the 1% option monies to the seller to consider if he will grant an option to purchase to the potential buyer at the price showed. If the seller is agreeable, he will then grant an Option to Purchase to the buyer.

Q2: What research should a potential homeowner and his/her lawyer do before purchasing a property?

The buyer’s lawyer will do his due diligence by conducting the relevant searches on the property and seller.

Q3: How long does conveyancing take?

It usually takes about 10 to 12 weeks to complete the sale and purchase of the property. However, it varies from case to case, subject to the agreement of both the seller and buyer.

Q4: Do you need a lawyer to do conveyancing in Singapore?

Yes. For the legal documents to be registered with the Singapore Land Authority (SLA), they have to be signed in the presence of a lawyer and also duly certified by the buyer’s and seller’s lawyers.

Q5: How does a conveyancing lawyer help make the process easier?

He takes on the stress and burden of ensuring that everything goes smoothly from the Option to Purchase stage to the completion date.

Q6: How much does conveyancing cost?

It varies from case to case and from firm to firm. It also depends on the depth of client’s pocket and his/her choice of firms/lawyers.

With a purchase of property, it can range from $2,500 to $5,000.  Additional charges will be incurred if additional documents are to be drafted by the lawyers, for example, if the terms and conditions deviate from the standard agent’s printed Option to Purchase forms.

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This article is written by Daisy Tay from Crossbows LLP with editing by Asia Law Network. 

If you are looking for a conveyancing lawyer or have a legal question, you can request a quotation with Daisy. Alternatively, you can also get a Quick Consult with one of our practicing lawyers. With quick consult, you can check out in minutes and for a transparent, flat fee from S$49, the lawyers will call you back on the phone within 1-2 days to answer your questions and give you legal advice.