Ban on land sales, new launches for developers that deliver ‘defect-ridden’ projects

[SINGAPORE] Developers that deliver “defect-ridden” housing projects or commit serious safety breaches may now be barred from participating in future residential land tenders or selling new homes for up to five years.

According to a circular issued by the Ministry of National Development, Urban Redevelopment Authority (URA) and Building and Construction Authority on Friday (May 22), these tougher measures were introduced to provide greater protection for homebuyers and deter “severe errant developer behaviour”. 

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. 

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. 

These measures will take effect from Friday, following extensive consultations with industry stakeholders and a review of existing policies. 

The authorities said 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. These 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.

There is also public disclosure of their Construction Quality Assessment System scores and suspension of sales privileges for errant developers.

Still, the authorities noted that there remained “scope to strengthen deterrence against severe errant developer behaviour”. 

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

In determining whether penalties should be imposed, the authorities will consider factors such as the number and severity of defects and regulatory breaches, the time taken to rectify them, the impact on buyers’ safety and liveability, as well as any aggravating or mitigating circumstances. 

Major defects include cracked, chipped or broken windowpanes, shower screens, mirrors and tiles that affect the liveability and functionality of homes, and are not promptly rectified after sufficient notice has been given to the developers.

Meanwhile, examples of severe regulatory non-compliances include wall collapses, serious fire hazards or flooding that result in major damages or accidents.

The government said potential errant developers and relevant parties will first be given early warnings and opportunities to make representations or rectifications before any penalties are imposed. 

URA will also publish a list of disqualified and/or suspended developers and individuals on its website.