Proposal for Projects with Four or Fewer Units to be Covered by Housing Developers (Control and Licensing) Act

31 Mr Leon Perera asked the Minister for National Development (a) what is the basis for the statutory requirement of more than four units in the definition of "housing development" in the Housing Developers (Control and Licensing) Act; and (b) whether the Government will consider revising this to ensure projects with four units or lesser are also covered by the Act.

Mr Desmond Lee: Under the Housing Developers (Control & Licensing) Act (or HDCLA), a "housing development" is defined as a housing project with more than four units. Developers undertaking such a development are required to obtain a housing developer’s licence before carrying out the housing development. Licensed housing developers are required to comply with HDCLA regulations, including opening and maintaining a Project Account for the housing project, submitting an auditor’s certification on the project account annually, and using the standard Option to Purchase and Sale and Purchase Agreement in the sale of the units.

Housing projects with four units or less are mostly developed by individual owners or small developer companies. Subjecting individual owners to the regulatory requirements under the HDCLA is not necessary, as they are building the units for their own use, and not for sale. For small developer companies, they are subject to the terms of the contract agreed upon with the purchaser. Purchasers can negotiate, and seek their own legal advice, on the terms of the contract instead of using the standard Sale and Purchase Agreement.

Currently, housing projects with four units or less comprise only about 0.5% of pipeline supply. In addition, we have not received adverse feedback from purchasers of housing projects with four units or less in the past three years. Nevertheless, the Government will periodically review the HDCLA, and explore necessary regulations, to ensure that purchasers’ interests are safeguarded.