New Rules to Bar Errant Developers from GLS Bids and Home Sales for Up to 5 Years

Under the new Land Sales Disqualification Framework, developers that deliver projects with severe regulatory non-compliances affecting safety, or repeatedly deliver projects with major defects, may be disqualified from participating in all state land tenders for sites with residential components for up to five years. This includes participation through joint ventures with other developers. The affected sites cover land zoned as residential, residential with commercial on the first storey, commercial, commercial and residential, hotel and white sites.

Separately, a new Sales Suspension Framework allows the authorities to place errant developers on a sales suspension list for up to five years. A no-sale licence condition may also be imposed on their future unlaunched projects for the same period. This means they can start construction but cannot sell the homes.

However, disqualified developers would still be able to take part in private land sales, such as collective sales of residential projects between existing property owners and developers.

Major defects include cracked, chipped or broken windowpanes, shower screens, mirrors and tiles that are not promptly rectified after sufficient notice has been given to developers. Examples of severe regulatory non-compliances include wall collapses, serious fire hazards or flooding that result in major damage or accidents.

The new frameworks will apply not only to errant developers, but also to relevant parties, including directors and substantial shareholders who may exercise oversight and control over developers’ business decisions.

In assessing the penalties to be meted out to errant developers, the authority said it would look at various factors. These include the number and severity of regulatory breaches and major defects in a housing project that are attributable to the developer, in relation to the scale of the project. However, this will be limited to defects that developers have been given reasonable notice to rectify. Other factors include the time taken for the developer to rectify the instances of non-compliance and defects, the extent of their impact on home buyers, and whether safety and liveability are affected.

The authorities said that the new measures will not affect the majority of developers, who have delivered “quality private housing projects to homebuyers”. They added that existing safeguards have “largely been effective” in maintaining construction quality standards. Still, the authorities noted that there remained “scope to strengthen deterrence against severe errant developer behaviour”.

The enhanced safeguards include more comprehensive workmanship quality checks for all government land sales sites and enhanced construction inspections of all homes built by developers with track records of poor construction quality. Errant developers will also have their Construction Quality Assessment System scores and suspension-of-sales privileges made public so that homebuyers can make informed decisions.

URA will also publish a list of disqualified and/or suspended developers and individuals on its website, so that all prospective land bidders, including joint ventures, can check their eligibility to take part in tenders. Errant developers and relevant parties will be given early warnings and opportunities to make representations or rectifications before penalties are imposed.

The Real Estate Developers’ Association of Singapore (Redas) welcomed the new measures, saying that it would help protect consumer confidence and the “long-term integrity of the industry”. Redas pointed out that there had been no instances of such non-compliance among its members, and that it would look into “suitable actions” against any members who are disqualified or suspended.

Melvin Yong, president of the Consumers Association of Singapore, added that the frameworks give buyers greater assurance that developers are held accountable for the timely rectification of defects.

Professor Sing Tien Foo, provost’s chair professor of real estate at NUS Business School, noted that it would be hard to fully eliminate errant developers, “as more new and inexperienced developers are entering the market, and some are short-term developers with the intention of making short-term profits in the heating property market”. He added that the new measures would “further weed out these short-term developers” but would not affect most developers who are in the business for the long term.

In 2022, The Straits Times reported that MCC Land (TMK), the developer of Sceneca Residence, a 268-unit leasehold condominium in Tanah Merah, was hit by a no-sale licence. That meant MCC could start construction but could not sell units off-plan without approval from the Controller of Housing. Representatives for MCC declined to say at the time why the no-sale licence was issued. Sceneca Residence was built on a GLS site awarded to MCC Land (Singapore) in November 2020 at S$248.99 million.

In January 2019, a ban on sales had also been applied against Kingsford Huray Development’s 1,862-unit Normanton Park condo. It came after a raft of complaints from owners about shoddy workmanship and poor amenities at the developer’s other projects, including Kingsford Waterbay. But the ban was lifted on Nov 30, 2020, and a sales licence for Normanton Park was issued to Kingsford Huray after it completed Kingsford Waterbay with a certificate of statutory completion and titles issued.