Developer Sales: RES exam practice questions

Under the Housing Developers (Control and Licensing) Act, “housing development” is the business of developing, or providing money for, __________.

1. Amore than 4 units of housing accommodation
2. Bmore than 2 units of housing accommodation
3. C10 or more units of housing accommodation
4. Dany residential building of more than 4 storeys

A developer holding a sale licence may start selling units only after __________.

1. Aits building plans have been approved by the Commissioner of Building Control
2. Bthe Temporary Occupation Permit (TOP) has been issued for the project
3. Cthe foundation works of the project have been completed
4. DURA has granted Provisional Permission for the project under the Planning Act

Administrative, marketing and advertising expenses may be paid out of the project account only up to __________.

1. A5% of the total construction cost of the project
2. B10% of the total construction cost of the project
3. C5% of the total sales proceeds of all units sold in the project
4. D20% of the money held in the project account at any time

Under the Housing Developers Rules, the booking fee a purchaser pays for an option to purchase must be __________ of the purchase price.

1. Anot less than 5% and not more than 10%
2. Bexactly 5%
3. Cnot more than 1%
4. Dnot less than 10% and not more than 20%

Before accepting a booking fee, the developer must give the intending purchaser a drawn-to-scale location plan showing the streets, buildings and facilities within a radius of __________ of the project.

1. A500 metres
2. B200 metres
3. C1 kilometre
4. D2 kilometres

A developer’s Option to Purchase expires __________.

1. A3 weeks after the S&P Agreement and title deeds are delivered to the purchaser or his solicitor
2. B3 weeks after the date of the option
3. C14 days after the S&P Agreement is delivered to the purchaser, unless the developer agrees in writing to a longer period
4. D8 weeks after the date of the option

Mr Tay Boon Kiat, a 58-year-old Singapore citizen, owns a large freehold plot in Bukit Timah on which his family bungalow has stood for over 30 years. With his two children now married and living in their own condominium units in Bishan, he plans to demolish the bungalow, build 4 terrace houses on the land in his own name and sell all of them while construction is still under way. His bank has offered him a construction loan, and his nephew, an architect, will prepare the building plans for approval. Mr Tay’s golf partner, a property agent, tells him that anyone who builds homes for sale as an individual rather than through a company must hold at least a no-sale licence from the Controller of Housing.

Which of the following BEST describes Mr Tay’s position under the Housing Developers (Control and Licensing) Act?

1. AHe needs no housing developer’s licence, as the Act covers only developments of more than 4 units, though planning permission and plan approval are still needed
2. BHe needs a sale licence before selling, as the Act covers developments of 4 or more units of housing accommodation and he intends to sell before completion
3. CHe needs only a no-sale licence, as an individual developer is treated differently from a company and may not sell houses before they are completed
4. DHe needs no housing developer’s licence, but only because landed houses on their own titles, unlike strata units, fall outside the Act altogether

Evergreen Residences is a 480-unit condominium in Jurong East being built by Westmark Homes Pte Ltd, a licensed housing developer. The project’s architect has certified the total construction cost at $64 million, while the land cost the developer a further $180 million and the units are expected to fetch about $410 million in total. So far the developer has withdrawn $2.9 million from the project account for administrative, marketing and advertising expenses. Its marketing director now wants $600,000 more from the account for a relaunch campaign, including a new show flat interior and online advertising, and argues that the cap on such spending should be measured against the project’s sales proceeds, which are far larger than its construction cost.

How much of the $600,000 may the developer withdraw from the project account for the relaunch campaign?

1. A$300,000, as administrative, marketing and advertising costs are capped at 5% of the certified total construction cost of $64 million
2. B$600,000, as the 5% cap is measured against the expected sales proceeds of about $410 million rather than the construction cost
3. CNil, as marketing and advertising costs may never be paid out of the project account and must come from the developer’s own funds
4. D$600,000, provided the bank first receives a certificate from the project’s qualified person that the payment is due

Mrs Goh Siew Lan, a 52-year-old Singapore citizen, took an option for a $1,260,000 unit at a new condominium in Tampines, paying a 5% booking fee. The developer’s solicitors delivered the title deeds and the S&P Agreement to her on a Monday. Two days later, her husband learned that his company was posting him to Jakarta for three years, so she decided not to go ahead and wrote to the developer that she would not exercise the option. The salesperson who helped her book the unit now tells her, “Because you pulled out early, you will get the whole booking fee back, but only after the full 3-week option period has run out.” Her sister, who once bought an office unit off the plan, says she will get only half of it back.

What refund is Mrs Goh entitled to, and when?

1. A$47,250, which is 75% of her booking fee, payable within 4 weeks after the developer receives her written notice
2. B$63,000, the whole of her booking fee, as she withdrew in writing well within the 3-week option period
3. C$47,250, which is 75% of her booking fee, payable only within 4 weeks after the 3-week option period ends
4. D$31,500, which is 50% of her booking fee, payable within 4 weeks after the developer receives her written notice

Mr Ong Kah Seng, a 45-year-old sales director, is buying a unit at a condominium under construction in Yishun jointly with his wife. On 1 March 2027 he receives the developer’s notice, with the qualified person’s certificate, that the reinforced concrete framework of his unit has been completed, together with a request for the 10% instalment. He is then away in Shanghai on business for most of March, and his wife assumes the payment can wait until he returns. A friend who bought in another project tells them that purchasers always get a 21-day grace period before any interest is charged. Mr Ong finally pays the 10% instalment on 5 April 2027, and the developer has not sent him any other notice in the meantime.

Which of the following is correct?

1. AHe owes interest from 16 March 2027 until he pays, calculated daily at 2% a year above the Base Rate on the unpaid instalment
2. BHe owes interest from 2 March 2027, the day after he received the notice, calculated daily at 10% a year on the instalment
3. CHe owes no interest, as he paid within 21 days after the instalment fell due and the developer sent him no further notice
4. DThe developer may treat the agreement as annulled from 30 March 2027 without further notice, resell the unit and forfeit 20% of the price