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More regulations for showrooms in amended Housing Developers Act

SINGAPORE — Showrooms for future private residential properties will no longer be able to use glass panels in place of a solid brick wall to make the unit seem bigger than the actual product. Instead, developers will be required to have structural and external walls which are of the same thickness in actual units, with labelled furnishings, interior fittings and finishes that are made known to buyers, while the authorities will have the right to enter and close showrooms which breach these rules.

SINGAPORE — Showrooms for future private residential properties will no longer be able to use glass panels in place of a solid brick wall to make the unit seem bigger than the actual product. Instead, developers will be required to have structural and external walls which are of the same thickness in actual units, with labelled furnishings, interior fittings and finishes that are made known to buyers, while the authorities will have the right to enter and close showrooms which breach these rules.

These are some examples of the new Housing Developers Rules which the Government will be empowered to make, after Parliament approved changes to the Housing Developers (Control and Licensing) Act yesterday.

Under the amendments, developers will be required to make public their audited financial positions, while their advertising and promotional activities of developments will also be regulated. The maximum fine if developers fail to comply has been raised five times to S$100,000.

Senior Minister of State (National Development) Lee Yi Shyan said yesterday that the changes will ensure that the Act remains “relevant and effective in safeguarding the interests of home buyers”, while taking into consideration developments in the private property market.

“A home is, in most cases, the single largest investment in one’s lifetime. It is only right that home buyers are provided with the appropriate tools and legal safeguards to make informed decisions,” he added.

The minister will also be given new powers requiring developers to disclose and publish all rebates, discounts and other benefits offered to home buyers. Mr Lee noted that some developers have started to mark their units at a higher price, while offering “significant discounts” through rebates and other benefits, such as furniture vouchers.

“Such inflated sale prices mask the real transacted prices and undermine transparency in the property market,” he added.

Members of Parliament (MPs) supported the amendments, even though they called for more to be done as they cited several examples of how home buyers were misled by marketing tactics and inaccurately-depicted showrooms, such as higher ceilings and mirrored surfaces to create an illusion of bigger living spaces.

Citing an example of residents who “could not open their door to the toilet without it banging against the toilet seat”, Mr Ang Hin Kee (Ang Mo Kio GRC) called for doors to be installed in showrooms.

Mr Ang also suggested that developers must reflect the land-use plans and “to-be-constructed buildings” within a 2km-radius of a development in their promotional materials.

Mr Lim Biow Chuan (Mountbatten) called for a ban against agents queuing at property launches “to create the hype that there are many buyers wanting to purchase limited units”, adding that this creates a lack of market transparency.

The practice of collecting blank cheques from potential home buyers as a form of advance booking was also brought up by various MPs, with Mr Lim noting that such “practice will result in market manipulation”.

In response, Mr Lee said that the Council for Estate Agencies is working with the “relevant government agencies” and the industry to set guidelines on the collection and proper use of cheques.

On Nominated MP Eugene Tan and Mr Lim’s views that the enhanced fines were not hefty enough as a deterrent, Mr Lee said that the measures are “multi-levelled”.

Besides jail terms and suspension of licences, the authorities can also prohibit the sale of a development and future developments until all units are fully completed.

Said Mr Lee: “Developers’ revenue inflow will be severely constricted as they cannot rely on payments received during the construction process to fund the development of the project. There’s also the negative impact of the developer’s reputation among would-be buyers.

“A developer also risks affecting his track record, which is a key assessment criteria for future licence applications. We believe that all these taken together constitutes sufficiently strong deterrence against offences.”

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