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Header Icon FAQ on Project Account

Allowable Project Account withdrawals
Q1: What expenses are allowed to be paid from Project Account?
Q2: Do the references to "qualified person" in the HDPAR refer to quantity surveyor?
Q3: Can a developer withdraw moneys from the Project Account for purposes not related to the building Project?
Q4: What are the documents to be submitted in an application for the release of the banker's guarantee or reduction of the guaranteed sum under the banker's guarantee provided under Rule 10 of the Housing Developers (Project Account) Rules?
 
Money to be deposited into Project Account
Q5: Are licensed housing developers required to deposit interest charged on late installment payments paid by purchasers into the Project Account?
Q6: Are the installments of purchase money received after the issue of Temporary Occupation Permit (TOP) required under Rule 3 to be deposited into the Project Account?
Q7: Do the instalments of purchase money for commercial units in a mixed development need to be deposited into the Project Account?
 
Loans to be deposited into Project Account
Q8: Does loan for working capital have to be deposited into the Project Account?
Q9: Does loan which is required to be deposited in the Project Account under Rule 4 include both bank and non-bank loans?
 
Application of money in Project Account for specified purpose
Q10: Can Project Account moneys be transferred to a fixed deposit (FD) under Rule 5(g) for use as security for the issue of a Banker's Guarantee (BG) in favour of LTA for street works?
Q11: Can sale proceeds be charged or assigned for the purpose of securing loan facility for the building project?
Q12: Do the amounts referred in Rules 5(a) to (d) have to be paid in any priority?
Q13: Does 5% of the total cost of construction of the building project referred to in Rule 5(m) include GST?
Q14: Can stamp duties, interest subsidies and rebates offered to purchasers be paid from Project Account?
Q15: Can Project Account moneys be placed in an interest-bearing / fixed deposit (FD) account?
Q16: Can the interest earned on interest-bearing account be paid direct to the developer?
 
Withdrawal of money in Project Account after TOP
Q17: What does the amount specified in Rule 7(a) to complete the building project with Certificate of Statutory Completion (CSC) issued and to complete the sale and purchase (S&P) under all the S&P Agreements, include?
Q18: How is the amount on other fees, charges or expenses incurred on the building project, under Rule 7(c) determined?


Allowable Project Account withdrawals

Q1:

What expenses are allowed to be paid from Project Account?

A:

The following are examples of expenses which can be paid from Project Account moneys under the relevant provisions of the Housing Developers (Project Account) Rules :

Rule 5(d)- Payment of insurance premiums, architect's fees, engineer's fees, quantity surveyor's fees and consultant's fees for the building project
  • Valuation fees for the building project


  • Rule 5(e)(iv)- Payment of cost of providing site inspection for the building project
  • Clerk-of-work salary paid for the building project


  • Rule 5(g) - Payment of deposits and charges, other than development charges, payable to the Commissioner of Buildings and any Government department / statutory body for the building project
  • Fee chargeable by Commissioner of Building Control for approving building plans


  • Rule 5(i)- Payment of cost of construction for the building project
  • Costs of demolition and hoarding work which are part of the construction works, provided they are supported by the requisite certificate from the architect in charge of the building project, as required under Rule 6


  • Rule 5(j)- Payment of interest and charges on loan for the building project
  • Interest payment on loan for development charges.
  • Front-end fee for extension of credit facilities.


  • Rule 5(m)- Payment of administrative expenses (including marketing and advertising expenses) incurred on the building project subject to 5% of the total cost of construction
  • Real estate agent commission for securing purchase of units in the building project
  • Expenses for cleaning show flat and the carpets of show flat of the building project
  • Expenses for purchase of fax and copier machines for show flat of the building project
  • Interior design fee for show flat of the building project



  • Q2:

    Do the references to "qualified person" in the HDPAR refer to quantity surveyor?

    A:

    No. "Qualified person" refers to a person who is registered as an architect under the Architects Act (Cap. 12) and has in force a practising certificate issued under that Act.


    Q3:

    Can a developer withdraw moneys from the Project Account for purposes not related to the building project?

    A:

    Under Rule 10 of the Housing Developers (Project Account) Rules, a developer may withdraw moneys from the Project Account for purposes not related to the project if he has furnished a Banker's Guarantee of an equivalent amount to the Controller and has obtained his written approval.


    Q4:

    What are the documents to be submitted in an application for the release of the banker's guarantee or reduction of the guaranteed sum under the banker's guarantee provided under Rule 10 of the Housing Developers (Project Account) Rules?

    A:

    The developer is required to provide the following documents in his application:

    (a) a computation of the amounts required to complete the project in accordance with rule 7 or 8 of the Housing Developers (Project Account) Rules;

    (b) for release of the banker's guarantee, the Project Account bank's confirmation that the amounts in (a) above have already been retained and the current balance in the Project Account;

    (c) for reduction of the guaranteed sum under the banker's guarantee, the reduced guaranteed sum and the Project Account bank's confirmation on the current balance in the Project Account, both of which must add up to the amounts required to complete the project as computed in (a) above;

    (d) if the land for the project is not mortgaged:

    1. a solicitor's confirmation that the project is not mortgaged;


    2. a certification by the qualified person in charge of the project that the roofing and internal plastering of all units have been completed;


    (e) if the land for the project is mortgaged, copy of the Temporary Occupation Permit(s) for the entire project.


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    Money to be deposited into Project Account

    Q5:

    Are licensed housing developers required to deposit interest charged on late installment payments paid by purchasers into the Project Account?

    A:

    No.


    Q6:

    Are the instalments of purchase money received after the issue of Temporary Occupation Permit (TOP) required under Rule 3 to be deposited into the Project Account?

    A:

    For a housing project which is still licensed, all instalments of purchase money payable up to TOP stage are required to be paid into Project Account. This applies both to units sold before and after TOP.


    Q7:

    Do the instalments of purchase money for commercial units in a mixed development need to be deposited into the Project Account?

    A:

    Yes.


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    Loans to be deposited into Project Account

    Q8:

    Does loan for working capital have to be deposited into the Project Account?

    A:

    Under Rule 4, loan for working capital to carry out the construction of the building project (eg financing administrative expenses and overhead cost) has to be deposited into the Project Account before it is utilized.


    Q9:

    Does loan which is required to be deposited in the Project Account under Rule 4 include both bank and non-bank loans?

    A:

    Yes.


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    Application of money in Project Account for specified purpose

    Q10:

    Can Project Account money be transferred to a fixed deposit (FD) under Rule 5(g) for use as security for the issue of a Banker's Guarantee (BG) in favour of LTA for street works?

    A:

    It can be allowed subject to the FD money to be used in accordance with the terms of the BG and Rule 5(g) of the HDPAR.


    Q11:

    Can sale proceeds be charged or assigned for the purpose of securing loan facility for the building project?

    A:

    A charge or assignment over sale proceeds for securing loan facility for the building project may be allowed provided they do not contravene Rule 3 of the HDPAR and supersede Rule 5.


    Q12:

    Do the amounts referred in Rules 5(a) to (d) have to be paid in any priority?

    A:

    There is no order of priority for payment.


    Q13:

    Does 5% of the total cost of construction of the building project referred to in Rule 5(m) include GST?

    A:

    No.


    Q14:

    Can stamp duties, interest subsidies and rebates offered to purchasers be paid from Project Account?

    A:

    No.


    Q15:  

    Can Project Account moneys be placed in an interest-bearing / fixed deposit (FD) account?

    A:

    Yes, subject to the following:

    a. the FD account must be with the same Project Account Bank;

    b. the money placed in the FD account remains as part of the Project Account opened with the bank and is therefore subject to the HDPAR;

    c. any document issued for the opening of FD account should be held in custody by the Project Account Bank;

    d. the developer is required to inform the Controller whenever such an account is opened; and

    e. the Project Account Bank shall, when required by the Controller, transfer the money in the FD account back to the Project Account.


    Q16:

    Can the interest earned on interest-bearing account be paid direct to the developer?

    A:

    Yes.


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    Withdrawal of money in Project Account after TOP

    Q17:

    What does the amount specified in Rule 7(a) to complete the building project with Certificate of Statutory Completion (CSC) issued and to complete the sale and purchase (S&P) under all the S&P Agreements, include?

    A:

    The amount includes outstanding payments to contractors, material suppliers, building professionals, etc, for obtaining CSC, as well as legal costs and incidental expenses for the completion of S&P (eg fees for application and issue of separate titles, lodgement of title plans) of all units sold prior to the withdrawal of surplus money in the Project Account.


    Q18:

    How is the amount on other fees, charges or expenses incurred on the building project, under Rule 7(c) determined?

    A:

    The amount referred to in Rule 7(c) may be certified by the qualified person (ie. an architect registered under the Architects Act) in charge of the building project or they may be supported by the creditors' estimation of such expenses, eg auditor's fee, engineer's fee, advertising expenses, commission to sales agent for the building project.


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