It is checking whether money for projects has been misused, and if there were other breaches
The Controller of Housing at the Urban Redevelopment Authority (URA) is examining the project accounts of two delayed condominiums to check whether money earmarked for them has been misused, and if there have been other regulatory breaches.
Laurel Tree at Hillview Terrace and Sycamore Tree in Joo Chiat hit the news last year after it was revealed that their construction had been delayed for over two years.
The projects, developed by Lerida and Astoria Development respectively, were supposed to obtain a temporary occupation permit by December 2016, but are still under construction.
Buyers of the two developments told The Sunday Times that the projects have been taken over by a bank that is acting as a receiver.
The buyers were initially told that they would likely have to pay extra for the condominiums to be completed, but were informed on Thursday that construction could continue without extra funds.
However, this was on the condition that all of them agree to waive their rights to claim liquidated damages – compensation that developers must pay buyers for delays – from the project accounts.
The initial situation led some buyers to question why the money in the project accounts was insufficient.
A buyer, Mr Toh, 45, who declined to give his full name, said he had paid 60 per cent of the cost of his one-bedroom flat at Laurel Tree. He had planned to move into the unit – which cost around $600,000 – with his wife, but now intends to sell it. “I had been asking them why the balance amount in the project account is insufficient to cover the cost of construction. It’s mostly completed,” said Mr Toh, who works as a manager.
The URA told The Sunday Times that the Controller of Housing is examining the two projects to “ascertain if there are any breaches of the statutory rules regulating the operations of the project accounts”.
The Controller of Housing grants licences to developers and administers regulations related to developers, among other property issues.
The URA said licensed developers must open a project account for each housing project and ensure that all purchase monies collected are deposited into these accounts and used specifically for the projects.
Offenders found guilty of breaching these regulations could be jailed for up to a year and fined a maximum of $50,000.
Corporate real estate lawyer Norman Ho, a senior partner at Rajah & Tann, said the buyers’ claim for liquidated damages can be made only towards the developers, but they are unlikely to get back anything as the developers have gone “belly-up”.
URA said it has urged the receiver “to take into consideration the purchasers’ concerns”.
The two developers did not respond to The Sunday Times’ requests for comment.
“Source:[URA examining project accounts of two delayed condos] © Singapore Press Holdings Limited. Permission required for reproduction”
