May 26, 2011. 4.30 am
10 hours after sitting for the Real Estate Agency (REA) May 2011 Examination
lst Paper Legal Framework of Real Estate
Around 20 candidates sat for this exam. I estimated that at least 10 of my classmates did not attempt. CEA had mandated that all 3 papers must be passed at one sitting. I had paid $1,400 for the course of over 70 hours and spent countless hours studying. I had to choose 5 out of 8 questions at 20 marks/question. It was more like an examination for law students rather than real estate salespersons and key executive officers.
I knew I would fail 3/8 questions as they were not fully covered during lectures. So, I had no choice. Of the 5, I had difficulty in answering at least 1 regarding noise nuisance scenarios (Question 1).
Question 1 - one section. Cats, rodents, smoke in the open-air restaurant affected the neighbourhood. What are the legal remedies? It is a real life scenario encountered in Singapore.
My answer briefly - I forgot to mention that the cats were stray cats. Legal remedies? Take out civil suit - law of tort - personal health affected. Public health. Call in the regulatory authorities to enforce regulations? What regulations I could not say. Call in the AVA (Agri-Food Veterinary Authority for rodent control - I forgot to write about the control of stray cats which is under some AVA's regulation - is rodent control under the AVA or NEA?), the NEA (National Environmental Agency - smoke pollution). Public likely to be health affected (rodents) but what is the legal remedy?
In the same question, the other section asked about legal remedies for a condo's floodlights and noise affect a resident's sleep. One resident had a nervous breakdown. Another question asked about cafe with noisy customers and music. I think I would fail this question as I could not state the laws properly. Mainly civil suit and injunction. Not good enough.
A sale of a condo vacated since 1 January 2009 has been concluded. I represented Seller who works in Shanghai. What are my 2 duties as her housing agent? What 2 advices to her about her tax liabilities? What 2 concessions she would get? What would I advise the Buyer?
Answer: Briefly agent's two duty of care are:
1. Ensure that the contract is valid (offer and acceptance). I would go to Shanghai or send by Fedex/UPS registered letter for Seller to sign the Sales and Purchase Agreement if she had not signed, since she was not in Singapore. I had earlier met a realtor friend who just did that for a China Buyer who had paid for the Singapore property and he flew to Guangzhou to get him to sign the Sales & Purchase Agreement and then gave back to the Singapore lawyer. But is this answer acceptable since the "sales was concluded". This is the tricky part of the question.
2. 2nd duty. To act honestly in the interest of the Seller. That meant not receiving secret commissions from the Buyer by telling the Seller that she had got a purchase price which was lower due to my being corrupted. This does not seem to be a good answer. To account for monies received? But her lawyers are handling her case and all payments. Should have mentioned Approved banks now receive the conveyance money, not lawyers. No time to think.
3. Two tax liabilities of Seller.
Property tax of 10% for non-owner occupied condo. Had she paid? Her lawyers would take care of that. IRAS would have imposed penalties or put a charge on her condo or sold it off if she had not paid property tax. I forgot to mention IRAS putting an encumbrance of a charge on property tax on the title for owners not paying property tax. This might give me some marks.
Sellers' Stamp Duty (16,12,8,4% of transaction price for the respective 1, 2, 3 and 4 years after purchase). But her SSD depended on which year she had purchased the condo. Since the condo was vacated in 1 Jan 2009, it would be 3rd-4th year assuming she bought in 1 Jan 2009 and it is May 2011 now. So, SSD should be 8%. If she bought in 1 Jan 2006 (i.e. at least 5 years earlier), I said the SSD would be the normal 3% of sales price + $5,400. Quite a tricky question. Fortunately I remember my 16, 12, 8 and 4% figures). My classmate wrote about Goods and Service Tax as being one of the tax liabilities after striking out his SSD answer. But I told him that sales of residential properties are not subject to GST. Or is it if the Seller is a GST taxable person as he assumed her to be one?
Her two concessions. I could only think of one. Get a refund of property tax since her condo was vacant for 2 years. If she had tried to get a tenant but failed to do so while asking for reasonable rentals. Lodge an application with the IRAS within 30 days of the sales and purchase agreement being completed? No. It should be after one year of vacancy.
Annual value concession? No rental for 2 years. Therefore annual value should be lower. Apply to the IRAS for review. I doubt this is the correct answer for the 2nd concession. Income tax?
Question 3. Land Acquisition Act. What was the main legal issue and had it been resolved? This was the question I had no choice but to pick it up since this was the 5th question I could answer. However I had not studied the 4 occasions (years when new amendments were introduced, according to my classmate when the government introduced measures to resolve the unhappiness of the acquired property owners being paid below market value for their properties. I could remember reading in the newspapers about the unhappiness some 20 years ago and so I said the main legal issue was being paid below market value. Was it resolved? Well, I could not specify the year (1970?) when the government agreed to pay market rates for properties acquired since I did not read the notes and my lecturer did not go show in his lecture slides this historical aspect. But all facts are in his notes and I just did not read this part!
Who were the 4 "interested persons" as regards the Land Acquisition Act? My classmate said they were the owner, landlord and tenant. Well, I wrote they were the HDB, JTC, National Heritage Board and SLA. How about NEA, AVA (fish farms)? The real person who set the question of "interested person" was not kind. I believed that my lecturer did not lecture on "interested persons".
Two sisters inherited a bungalow. Built a 3-storey dwelling (what is a dwelling - strata-titled apartment which I forgot to assume). Both got married. The Singapore Citizen sister died in a car accident. The other sister in the USA who had renounced her citizenship claimed that the house now belongs to her. The dead sister's husband said that his wife had said everything she owned would be his.
So, what are 2 legal claims and what are 2 legal defences? One could go crazy trying to answer this question just to pass.
Was the new dwelling registered with the Land Titles Deed? Only a registered title can be produced in court as evidence of an interest in property. Was there a will? Did the Singaporean sister died testate or intestate (you need to use such legal terms to score a mark or two)?
Would her will over-ride the joint-tenancy (assuming the two sisters are joint-tenants with the survivor taking all shares)? I said it would not as I had read somewhere.
Was the ownership of the new 3-storey dwelling a tenant-in-common with both sisters owning shares? 50:50? Or unequal shares. I had no time to ruminate on legal aspects of unequal shares.
In any case, the "foreigner" sister (she had given up Singapore citizen and recent laws made her on the same status as foreigner) would inherit her shares only. She had to dispose of her shares in 2 years (it could be 5 years) or face harsh penalties since foreigners are not allowed to own landed properties (Residential Property Act).
What is an "indefeasible" of title and what 2 occasions when the Registrar of Titles would not permit registration of a title as being indefeasible or some closely related question.
I could answer this question and did explain the "mirror" and "curtain" aspect. Also there is the state guarantee but forgot to mention that the plaintiff would be compensated from an insurance fund if the Registrar of Titles made an error during registration causing him losses.
What is certificate of title? More questions. It would be tough to pass this examination. I hope to get 50% but passing does not mean one gets licensed and so, much depends on Paper 2 and 3 scores.
"Did anyone take the examination question paper?" one young man asked my group of 5 candidates who were smoking. We did not. Life is getting harder and harder for housing agents who are now supposed to be giving legal advice when they are supposed to refer clients to the lawyers to do so to avoid misrepresentations and estoppels (topic of estoppels studied hard but no luck).