In this article, we will share with everyone the   various important issues to take note of when  dealing with Sentosa Cove Villas as well as some of the common mistakes made in such transactions.

SLA Approval

Sentosa Cove Villas are still very popular amongst foreign buyers. However, foreign buyers will need approval from Land Dealings (Approval) Unit (LDAU), SLA, before they can complete the purchase.

As such, the Option to Purchase must contain the necessary clause to make the purchase subject to LDAU approval.

The problem with some of the LDAU clauses found in some Option to Purchase is that they do not clearly spell out whether the Vendor is to give a full refund or a partial refund of the monies paid in case LDAU approval is not obtained.

Thus, it is important to address this issue upfront with both the buyer and the vendor before this   important clause is clearly spelt out in the Option to Purchase.

At the same time, it is also important to know that it is difficult to get approval for foreign buyers to buy in a company’s name. We always advise our clients it is preferable to buy the property in their individual name to minimize unnecessary delays for approval.

Another important pointer to take note of is that the foreign buyer will only be allowed to buy one unit under their name. In the case of a married couple, they are considered as one entity, and the authorities will not allow the husband and wife to buy a unit each.

A lot of agents also do not realize that the foreign buyer will also not be allowed to buy 2 units built on one amalgamated plot of land (comprising 2   separate lots).

There is also a marked difference in the LDAU  application process between Sentosa Cove Villas and landed properties on the mainland.

Firstly, for Sentosa Cove properties, the foreign buyer need not prove economic contribution.

Secondly, the processing time is also shorter for Sentosa Cove property as the LDAU need not   assess whether there is economic contribution.

Thirdly, you will need to submit a copy of the Temporary Occupation Permit (TOP) certificate or Certificate of Statutory Completion (CSC) when you submit LDAU application for Sentosa Cove properties. This is not a requirement for mainland properties.

Fourthly, unlike LDAU approval for mainland properties that restrict the purchaser from selling the property within 3 years, there is no such restriction for Sentosa Cove properties.

Sentosa Development Corporation Approval

 A lot of agents also do not realize that the Sentosa Cove authorities will need to come in and inspect the Villa prior to completion to check for unauthorized works. We have encountered many cases where there were unauthorized works carried out by the vendor, thus causing unnecessary complications to the completion. As such, we always provide for a special clause in the Option to Purchase to cater for this, whenever we act for either the purchaser or the vendor.

Long Term Visit Pass

One of the best kept secrets around is that the  foreign owner of a Sentosa Cove Villa can actually apply for a Long Term Visit Pass (LTVP) for himself and his immediate family members (conditions apply) that will allow them to reside in Singapore.

This is particularly attractive to someone like a  Chinese buyer, who may otherwise need a visa to come to Singapore.

Although a LTVP has restrictions against the holder working or starting a business in Singapore, it is still the next best thing to getting a permanent residence in Singapore.

Conclusion

 Although foreigners who buy Sentosa Cove Villas are prevented by law from renting out their properties, we notice that this restriction does not serve to discourage them from investing in Sentosa Cove.

As such, it remains a lucrative market for agents who specialize in this very unique development that comes with its own special regulations. It is thus important for Sentosa Cove specialists to take note of the various issues as discussed above so that it will be a smooth transaction for all parties concerned.