RESIDENTIAL PROPERTY (AMENDMENT) BILL

Order for Second Reading read. 5.28 p.m.

The Minister for Law (Mr E.W. Barker): Mr Speaker, Sir, I beg to That the Bill be now read a Second time."

This Bill seeks to amend the Residential Property Act, 1976, to prohibit foreigners from purchasing HUDC flats without the approval of the Controller of Residential Property. The prohibition will take effect from 31st May, 1982, the date when an announcement was made in the Press regarding the introduction of such a prohibition.

HUDC flats have been sold to Singapore citizens and permanent residents under the Middle Income Housing Scheme. This is to help Singapore citizens and those with permanent ties in Singapore to own their homes.

The existing provisions of the Residential Property Act, 1976, only prohibit foreigners from purchasing flats in buildings of less than six storeys unless they have obtained the prior approval of the Controller of Residential Property. Many of the HUDC housing estates have buildings higher than six storeys and the prohibition in the Act does not apply to these high-rise buildings. Under the leases issued by the Housing and Urban Development Company (Private) Limited to the owners of the flats, the flat owners are not allowed to resell their flats within five years from the date they occupy their flats. After this 5-year period, these flat owners will be entitled to sell their flats without having to seek the prior approval of the lessor. The amendment to the Act will restrict the sale of HUDC flats by their present owners to Singapore citizens. Persons who are not Singapore citizens can only purchase these flats if they have the prior consent of the Controller of Residential Property.

The Bill also introduces amendments to the Residential Property Act, 1976, for the purpose of overcoming practical difficulties encountered by the Controller of Residential Property in the administration of the Act. Amendments are also made to section 23, which exempts certain transactions from the provisions of the Act, to clarify the intended meaning of that section.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr E.W Barker].

Bill considered in Committee.

[Mr Speaker in the Chair]

Clause 1 -

Mr Barker: Sir, I beg to move,

In page 1, line 5, to leave out "12 and 15" and insert "14 and 17".

Sir, this is merely to rectify a drafting error.

Amendment agreed to.

Clause 1, as amended, ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Clause 3 -

Mr Barker: Sir, I beg to move,

In page 3, to leave out lines 4 to 12 and insert new subsections (2) to (7) to section 3A as set out in the Order Paper Supplement.*

*The amendment, standing in the name of the Minister for Law, reads as follows:- "(2) Nothing in subsection (1) shall be construed to permit a foreign person to purchase or acquire - (a) all the flats in every building consisting of six or more levels in a development permitted to be used under Cap. 279. the Planning Act for residential purposes; or (b) all the units in a development approved by the competent authority under the Planning Act as a condominium development, without having obtained the approval of the Minister. (3) A foreign person who purchases or acquires any estate or interest in (a) all the flats in every building consisting of six or more levels in any development permitted to be used under the Planning Act for residential purposes; or (b) all the units of a development approved by the competent authority under the Planning Act as a condominium development, without having obtained the approval of the Minister shall be guilty of an offence and shall be liable on conviction to a fine not exceeding ten thousand dollars. (4) Where a foreign person is convicted of an offence under subsection (3), the Minister may direct the Controller to serve a notice on that person of six months of the date of service of the notice on that person to divest and transfer, within a period of six months of the date of service of the notice on that person or within any extension of time granted by the Minister under section (5), all his estate or interest in the development in respect of which such offence is committed to another person who is not - (a) his nominee; or cap. 185. (b) if the foreign person is a company, a related company within the meaning of the Companies Act. (5) The Minister may, on an application being made by a foreign person before the expiry of the period of six months of the date of service of the notice referred to in subsection (4), grant sch extension of time as he thinks fit for the transfer of his estate or interest in the development. (6) Any foreign person who fails to comply with the Controller's notice referred to in subsection (4) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding ten thousand dollars and to a further fine not exceeding five hundred dollarrs for every day during which the offence is continued after conviction. (7) Nothing in subsection (3) shall prevent a foreign person from acquiring any estate or interest in any development under any agreement, lease or assignment for a term not exceeding seven years, inclusive of any further term which may be granted by way of an option for renewal."

Sir, the existing section 3 of the Act prohibits a foreign person from purchas- ing or acquiring any estate or interest in any residential property save as provided in the Act. The existing provisions of the Act permit foreign persons to purchase flats in buildings of six or more levels of units in condominium developments. The new section 3A seeks to replace the existing subsection (3) of section 2 of the Act, which is being repealed. The new section 3A seeks to clarify that whilst foreign persons are allowed to purchase flats, not being HUDC flats in buildings of six or more levels of units in a condominium development, the approval of the Minister must be obtained if a single foreign person wishes to acquire all the flats in all the buildings consisting of six or more levels in a particular development or all the units in a condominium development. This policy is now spelt out in subsections (1) and (2) of the new section 3A in clause 3 of the Bill. 5.30 p.m.

Sir, in view of these amendments it is necessary to prescribe a penalty for non-compliance of these new provisions. The new subsection (3) of section 3A makes it an offence punishable with a fine not exceeding $10,000 for a foreign person to commit an offence under section 3A (3).

The new subsection (4) of section 3A empowers the Minister to direct the Controller of Residential Property to issue a notice to a foreign person who is convicted of an offence under section 3A (3) to require him to divest his interest in his residential properties in the development concerned. If no such power is given to the Minister, then a foreign person, who has paid a fine for the commission of an offence, can retain the residential properties which he was not permitted to acquire or buy in the first instance.

The new subsection (6) prescribes the penalty for non-compliance with the notice issued by the Controller at the direction of the Minister requiring a foreign person to divest his interest in the properties which he acquired in contravention of the new section 3A.

The new subsection (7) of section 3A clarifies that the prohibition in section 3A (3) does not apply to short-term leases acquired by a foreign person. In other words, a single foreign person may lease all the flats in a high-rise building or all the units of a condominium development for a term not exceeding seven years, including any farther term which may be granted by way of an option for renewal.

Amendment agreed to.

Clause 3, as amended, ordered to stand part of the Bill.

Clauses 4 to 17 inclusive ordered to stand part of the Bill.

Bill reported with amendments; read a Third time and passed.