Completed Properties & En Bloc: RES exam practice questions

A defect that a buyer exercising ordinary care would discover on inspecting the property, such as water stains on a ceiling, is a __________.

1. Apatent defect of quality
2. Blatent defect of quality
3. Clatent defect in title
4. Dpatent defect in title

Despite caveat emptor, the seller of a completed property must disclose to the buyer __________.

1. Alatent defects in his title, such as a third party’s right over the land that inspection would not reveal
2. Bevery physical defect he knows about, including patent defects that the buyer could easily see for himself
3. Cany defect of quality that would reduce the market value of the property by more than 5% of the price
4. Dnothing at all, as an “as is where is” clause in the OTP excludes every duty of disclosure by a seller

The sale of a completed private residential, commercial or industrial property generally passes through which three stages?

1. APre-contract (option), contract, and legal completion
2. BBooking, progressive instalment payments, and vacant possession
3. COffer, valuation, and registration of the buyer’s caveat
4. DMarketing, public tender, and Strata Titles Board approval

Under the Conveyancing and Law of Property (Conveyancing) Rules 2011, money in the seller’s solicitor’s conveyancing account can generally be paid out to the seller only on a pay-out form __________.

1. Asigned by the seller’s solicitor and countersigned by the buyer’s solicitor
2. Bsigned by the seller alone, as the money in the account belongs to him
3. Csigned by the seller’s solicitor alone, as he is holding it as stakeholder
4. Dsigned jointly by the seller and by the estate agent or salesperson who handled the sale

Which Work Permit holders may rent a whole HDB flat?

1. AMalaysians, and Work Permit holders of any nationality in the services sector
2. BAny Work Permit holder whose permit has at least 6 months of validity left
3. COnly Work Permit holders employed in the construction or marine shipyard sectors
4. DNone, as Work Permit holders may rent only bedrooms in HDB flats, never whole flats

Before completion, the buyer’s solicitor makes a bankruptcy search against the seller mainly because __________.

1. Aa bankrupt’s private property vests in the Official Assignee, so he cannot give good title himself
2. Ba seller with unpaid debts must pay the buyer’s stamp duty out of the sale proceeds before the sale can be completed
3. Ca bankrupt seller must pay seller’s stamp duty at double the normal rate on completion
4. Dthe buyer cannot obtain a housing loan from a bank if the seller has ever been made a bankrupt in the past

Ms Chia Hui Ling, a 38-year-old Singapore citizen and secondary school teacher, bought a 30-year-old freehold intermediate terrace house in Serangoon Gardens from Mr Rajendran Pillay for $3,280,000. She viewed it three times, once with her father, a retired contractor, who pointed out only some chipped tiles and a rusty gate. The OTP stated that the house was sold “as is where is”. Mr Rajendran had inherited the house from his mother and never lived in it; he did not know of any structural problem and said nothing about the structure either way. Three months after completion, while removing a built-in wardrobe, Ms Chia’s contractor finds hairline cracks in a beam hidden behind it. Her cousin, a law student, tells her that every seller must pay for defects found within a year of completion.

Which of the following BEST describes Ms Chia’s position against Mr Rajendran?

1. AShe has no claim, as the cracks are a latent defect of quality that Mr Rajendran neither concealed nor misrepresented, so caveat emptor leaves the risk with her.
2. BShe has a claim, as a seller must disclose every latent defect in the property that ordinary inspection would not reveal, whether or not he knew of it himself.
3. CShe has a claim, but only for the part of the repair cost above 1% of the price, as the “as is where is” clause limits the seller’s liability to that extent.
4. DShe has no claim, but only because the cracks came to light more than three months after completion, when the period for claims against a seller had ended.

Mr Lim Chee Wah, 61, bought a freehold semi-detached house in Upper Thomson in 1995 and is now selling it to Ms Goh Pei Shan, a 45-year-old permanent resident who plans to rebuild. His neighbour has a legal right of way over a 2 m strip along the side of Mr Lim’s land, but the strip is overgrown and nothing on the ground shows the right. Mr Lim knows of it but says nothing, and the OTP is “as is where is”. Ms Goh’s bank has approved her loan, and her solicitor will make the usual searches and send requisitions after she exercises the option. Mr Lim asks his salesperson, Kenneth, what the law expects of him as the seller.

Which of the following statements that Kenneth might make is NOT correct?

1. ACaveat emptor does not excuse your silence, as the law requires a seller to disclose latent defects in his title that inspection with reasonable care would not reveal.
2. BThe right of way is a defect in title and not a defect of quality, because it is a third party’s right over your land rather than a physical fault in the house.
3. CThe searches and requisitions by Ms Goh’s solicitor will help her, but they do not remove your own duty as seller to disclose the right of way to her.
4. DYou may stay silent unless Ms Goh asks you about it, as a seller generally has no duty to volunteer latent defects in his title that she could not see.

Mr Tay Kok Leong, 44, is buying a 3-bedroom unit in a 15-year-old condominium in Pasir Ris for $1,120,000 from Mr Suresh Menon, who has been his friend since secondary school. To save costs, they ask Mr Suresh’s cousin’s law firm to act for both of them, and a partner there offers to handle Mr Suresh’s file herself while a senior associate handles Mr Tay’s. Mr Tay’s deposit and the balance of the price are to be paid through the firm’s conveyancing account. Mr Tay, who is also refinancing his existing HDB loan with a bank, tells the salesperson that any firm can act for both sides “as long as we both sign a consent letter”.

Which of the following BEST describes whether the firm may act for both of them in the sale?

1. AIt may not, as where money for the sale passes through its conveyancing account, no lawyer of the firm may act for the other party in the same transaction.
2. BIt may, as long as Mr Tay and Mr Suresh each give their informed consent in writing to the firm acting for both of them before the option is exercised.
3. CIt may, as long as a different lawyer in the firm handles each party’s file and signs the conveyancing account pay-out forms on that party’s behalf.
4. DIt may not, as a law firm may never act for more than one party in any kind of property transaction, including the refinancing of an existing loan.

Mr Soh Kian Huat, a 47-year-old trader, exercised an OTP to buy a two-storey freehold shophouse for $4,600,000, intending to lease the ground floor to a café. The OTP makes the sale subject to satisfactory replies to legal requisitions, but deems road schemes satisfactory if they affect the property “only upon redevelopment”. LTA’s reply shows that 40% of the land is a road reserve, to be surrendered on redevelopment or when road works are carried out, whichever is earlier. URA’s reply on zoning is favourable and his bank’s valuation matched the price. The seller’s salesperson tells Mr Soh that road schemes are always deemed satisfactory under this kind of OTP.

Which of the following BEST describes Mr Soh’s position?

1. AHe may rescind, as the reserve can be taken when road works are carried out without any redevelopment, so the reply falls outside the OTP’s proviso.
2. BHe cannot rescind, as the OTP deems road schemes satisfactory, whatever LTA’s reply says about when the affected land is to be surrendered.
3. CHe cannot rescind, as he should have checked the Master Plan and road line plans himself before he decided to exercise the option.
4. DHe may rescind, but the seller may keep the option fee and the deposit as compensation, as the sale was aborted on the buyer’s side.