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Understand the title deed when buying a property in Singapore

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Investing in property in Singapore is an attractive prospect. Choices include luxury condos, waterfront apartments, and city flats, making it an appealing market for potential investors.

However, international buyers may find it difficult to understand the Singaporean real estate market, especially when they need to confirm if the "Strata Title Deed," which is the official title deed in Singapore, is genuine and legal.

We have actually covered this specific document (among others, like the sales contract) in our property pack for Singapore.

In this article, we will give some insight to ensure a smooth and legally compliant property transaction in Singapore.

However, please do not forget that this blog post is for informational purposes only and that we are not legal experts. It's always advisable to consult with one. They can indeed thoroughly examine your specific situation and provide you with the most appropriate and tailored advice.

What is the Strata Title Deed in Singapore?

The Strata Title Deed in Singapore is a specific type of property title that's particularly relevant for properties with multiple units, like condominiums or apartments.

Essentially, it allows for individual ownership of a part of a property (like an apartment), combined with shared ownership of common areas (like gardens, gyms, or pools).

This type of deed is distinct from other property documents in Singapore, such as a Leasehold or Freehold title. A Leasehold title means you own the property for a fixed term, usually 99 or 999 years, after which ownership reverts to the state.

A Freehold, on the other hand, means you own the property indefinitely. In contrast, a Strata Title gives you permanent ownership of a specific part of the property (your unit) and a shared interest in the common property.

Legally, holding a Strata Title Deed means you own your unit and have the right to sell, lease, or transfer it. You also have voting rights in the management corporation (MCST), which manages the common property.

However, there are limits. You can't make changes to common areas or the external structure of the building without approval.

Also, you're bound by the management corporation's rules, which can govern anything from renovation guidelines to pet ownership.

The Strata Title is reliable as it's registered and legally recognized. It ensures clear ownership and rights, which is crucial for any real estate transaction.

However, it doesn't give you carte blanche. You don't have absolute control over the entire property, only your unit and a share of the common areas.

Regarding resale and inheritance, the Strata Title is straightforward. You can sell your unit just like any other property, and it passes to your heirs upon your death.

For foreign investors, the process is generally the same, but they should be aware of any additional regulations or restrictions that Singapore may impose on foreign property ownership.

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How to verify a title deed in Singapore?

The process

Verifying the authenticity of a Strata Title Deed in Singapore is crucial in any real estate transaction to ensure the legitimacy of the property ownership.

To verify a Strata Title Deed, you would primarily engage with the Singapore Land Authority (SLA). The SLA is the government body responsible for maintaining the land registry and ensuring all property transactions are properly recorded and legitimate.

To start the verification process, you can request a property title search through the SLA's online portal, INLIS (Integrated Land Information Service). This service provides detailed information about the property, including the current owner's details and any encumbrances or caveats on the title.

Cross-checking this information with the details on the Strata Title Deed you have is a reliable way to verify its authenticity.

Notaries and lawyers are also integral to this process. In Singapore, property transactions often require a lawyer to ensure that the transfer of ownership is legally binding and compliant with local laws.

A lawyer can help you interpret the information obtained from the SLA, verify the legitimacy of the title deed, and identify any potential legal issues.

Real estate agents, while helpful in finding properties and negotiating deals, may not have the expertise to authenticate legal documents. They can, however, guide you to the appropriate legal and governmental channels for verification.

When verifying a Strata Title Deed, be vigilant for red flags. These can include discrepancies in the property owner's name, mismatched property details, or encumbrances that were not disclosed. Be cautious if the seller is reluctant to provide the original deed or to facilitate a title search through the SLA.

To avoid common scams, always insist on a thorough title search through the SLA and engage a reputable lawyer for the transaction.

Be wary of deals that seem too good to be true, such as properties offered at significantly lower prices than market value. Additionally, avoid making any payments before verifying the title deed's authenticity and the legitimacy of the transaction.

Remember, in real estate transactions, due diligence is key. Taking the time to properly verify a Strata Title Deed can save you from potential legal and financial issues in the future.

What to check

Understanding a property's history, including past ownerships and transactions, is crucial in a real estate deal.

In Singapore, you can access and trace a property's history through the Singapore Land Authority's (SLA) Integrated Land Information Service (INLIS). This platform provides detailed records of property transactions, including changes in ownership and mortgage information.

Knowing the property's history helps in assessing its value and potential legal issues. For instance, frequent changes in ownership might warrant further investigation.

Checking for outstanding debts or liens is also done through INLIS. These debts or liens, known as encumbrances, are legal claims against a property by creditors.

If a property you're interested in has encumbrances, as a new owner, you might be responsible for settling these debts. This is why it's vital to be aware of them before finalizing a purchase.

Verifying a property's measurements and boundaries as stated in the title deed is another important step. Discrepancies in the property's size or boundaries can lead to legal disputes.

In Singapore, this information can be verified through a survey conducted by a licensed surveyor. If discrepancies are found, resolving them usually involves legal processes, possibly including adjustments to the title deed or negotiations with adjacent property owners.

Zoning laws and land use restrictions are critical too. They dictate what you can and can't do with a property. For example, a property might be zoned for residential use, limiting the ability to conduct commercial activities.

Information on zoning laws can be obtained from the Urban Redevelopment Authority (URA) of Singapore. They provide detailed plans and guidelines on land use for different parts of the city.

After our research and the feedback collected from our local real estate partners, we have written an article about the risks and pitfalls when buying a property in Singapore, you might want to check it out.

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How to update the title deed after the property transaction in Singapore?

After purchasing a property in Singapore, updating the Strata Title Deed is a critical step.

This process ensures that the property's official records reflect the new ownership. The update is typically handled by your solicitor or conveyancing lawyer. Once the purchase is complete, your lawyer will lodge a transfer document with the Singapore Land Authority (SLA). This document includes details of the sale and the new owner's information.

The SLA then updates the land registry, and the Strata Title Deed is officially changed to your name. This process usually takes a few weeks to a month.

Regarding insurance, once the title deed is verified and the property is purchased, it's advisable to consider several types of insurance for protection.

Firstly, home insurance is crucial. It covers damage to your property due to events like fires, natural disasters, or theft. Secondly, consider getting mortgage insurance, especially if you have a home loan.

This type of insurance helps cover your mortgage payments in case of unforeseen circumstances, like a loss of income.

Lastly, if you're living in a strata-titled property, you'll also be part of a management corporation, which typically requires a share of maintenance and other communal expenses. It's wise to understand these costs and how they're insured.

For foreign owners, understanding how the title deed intersects with inheritance laws is important. In Singapore, inheritance laws are straightforward for citizens, but for foreigners, it can get complex, especially if there are conflicting laws in their home country.

It's recommended to have a clear will that outlines your intentions for the property.

This is where consulting with a legal expert who understands both Singapore's laws and the laws of your home country becomes vital. They can help you navigate potential issues and ensure your property is passed on according to your wishes.

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This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.