Question 1
An investor buys an uncompleted commercial shop unit and assumes the defects-liability and forfeiture arrangements mirror a residential purchase. Her lawyer highlights several differences that flow from commercial sales sitting outside the Housing Developers regime.
Consider the following statements.
- (i) A developer building commercial premises solely for lease of up to seven years is not covered by the Act.
- (ii) The commercial defects retention is typically held by the developer's own lawyer, not the Singapore Academy of Law.
- (iii) A commercial development of more than four separate units engages the Sale of Commercial Properties regime.
- (iv) A commercial developer's booking fee may not exceed 10% of the purchase price.
Show the answer and full explanation
Answer: D
The rule. Commercial developer sales sit outside the Housing Developers regime. A development built solely for a lease of up to seven years is not caught; the defects retention is typically held by the developer's own lawyer, not the SAL; a development of more than four separate units engages the Sale of Commercial Properties regime; and the booking fee is capped at 10% of the purchase price.
Why D is correct. All four describe the commercial position correctly.
The other options.
- A drops (ii), the developer's-lawyer retention.
- B drops (i), the seven-year lease exemption.
- C drops (iii), the more-than-four-units threshold.
Exam note. Commercial ≠ residential: a seven-year lease-only exemption, lawyer-held retention, its own more-than-four-units threshold, and a booking fee capped at 10%.
Commercial developer sales sit outside the Housing Developers regime →