"BUILT-IN AREA" AND "BUILT-UP AREA'

Mr Chuang Shaw Peng asked the Minister for National Development whether the Government will give an official definition of "Built-in Area" and "Built-up Area" so as to remove any ambiguities in future property transactions.

Mr Lim Hng Kiang: Mr Speaker, Sir, arising from the recent court case, a High Court judge has determined that there is no consensus in the meaning of the term "built-in area", and since it is imprecise, suggested that the property industry come up with an acceptable definition.

The relevant professional bodies such as the Singapore Institute of Surveyors and Valuers (SISV) and the Real Estate Developers' Association (REDAS) have indicated that they will work together over the next two to three months to come up with an acceptable definition. The Government welcomes the property industry taking the initiative to define the terms so that properties can be marketed in an unambiguous manner.

Mr Chuang Shaw Peng (Nominated Member): Sir, in the property market, there is a standard sales and purchase agreement. Why does the Government not come up with a definition rather than leave it to the industry to come up with the definition of "built-in" or "built-up" area?

Mr Lim Hng Kiang: The sales and purchase agreement covers a wide range of parameters, including the obligations of both the developer and the purchaser. Definitions regarding the quality and fixtures are very difficult to pin down. In the official submissions of developments, URA uses the term "gross floor area (GFA)". That does not convey the same meaning to the purchaser. It is more technical. So some developers have tended to use more market friendly terms, like "built-in" or "built-up". Therefore, we think we should leave it to the market to try and define these terms so that the properties can be marketed in as unambiguous a manner as possible. If the Government were to step in, then the Government is more likely to use the more technical terms which have been established, like GFA. But since the industry is prepared to come up with an acceptable definition and everybody else will follow the definition, we will let that surface first.

Mr Chuang Shaw Peng: If the industry is to come up with the definition, would the Government officially endorse the definition so that there will be credibility in the enforcement of it?

Mr Lim Hng Kiang: We will see what the definition is and what it will cover. We do not want to constrain the way properties are being marketed. There are so many things that go into the advertisement brochure. The sales and purchase agreement has enough technical parameters, in terms of schedule of payments, etc, without us complicating it further. So let us wait and see how the market defines it. And if it is acceptable and people understand what it is, we will let the matter rest.