Artist’s impression of Lloyd Sixtyfive in River Valley.
The Urban Redevelopment Authority (URA) has reminded property developers to comply with the rules when offering buyers incentives, reported The Straits Times.
This comes as developers get more creative with their incentives to move units.
To underscore the message, the Controller of Housing recently rejected a scheme that would have enabled potential buyers to effectively rent a unit at Lloyd Sixtyfive in River Valley for about two years prior to deciding whether to buy it or not.
To live in the apartment project, a potential buyer would have to pay 10 percent of the unit’s total value and a 2.5 percent security deposit. By the end of the second year, the buyer could decide to purchase the unit, or leave and take back the security deposit.
“This scheme is akin to giving the tenant an option of up to 20 months from the commencement of the lease to decide if he wishes to purchase the unit,” said a URA spokesman.
Under the Housing Developers Rules, a standard option to purchase has a validity period of three to five weeks from the option date. This could, however, vary if the property developer applied to the URA beforehand.
Meanwhile, TG Developments, Lloyd Sixtyfive’s developer, said it is considering the URA’s comments while “thinking of other solutions which will work for the Controller of Housing and for us”.
PropNex Realty’s Key Executive Officer Lim Yong Hock shared that while developers should comply with the rules, they could also be provided more leeway.
“Many of these schemes deal with a grey area – developers don’t know if these are allowed or not until the authorities later say so,” he said.
Although this could be resolved if developers had every scheme approved beforehand by the URA, that may take up too much time and complicate matters if they wish to be creative, noted Lim.
“For many schemes, the developers are assuming additional risks. And if these do not hurt the consumer, or do not involve going against the cooling measures or rules, the URA could afford to be more flexible,” he added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
