May 30, 2016

    URA kills GEM's 'specimen cheque scheme'

    OF THE many innovative features for GEM Residences that its developers came up with, one particular scheme has ruffled the feathers of the housing regulator.

    The Business Times (BT) understands that under a "specimen cheque scheme", the joint developers - Gamuda, Maxdin and Evia Real Estate - issued cheques of $7,500 or $10,000 to prospective buyers, who then submitted these for expressions of interest. The buyers could have used these cheques to offset their booking fee on balloting day.

    But the plan was scuttled after the Controller of Housing directed these developers on Thursday night not to proceed with the use of such cheques, as this circumvents the requirement of a minimum 5 per cent booking fee for a residential purchase.

    Despite the about-turn, the 99-year leasehold project in Toa Payoh still sold 51 per cent of all units in just one day - marking one of the highest launch take-up rates in recent years.

    Buyers who turned up at the showflat on Friday morning were informed that those specimen cheques can no longer be used. But they were offered two alternatives - a direct discount of the same amount or to accept a cash rebate upon the signing of the sales and purchase agreement.

    In response to BT queries, an Urban Redevelopment Authority spokesman said the offer of the "specimen cheque scheme" by the developers to offset part of the booking fee to be paid by the purchaser "is also a circumvention of the minimum 5 per cent cash downpayment requirement of the Monetary Authority of Singapore".

    Some 297 units in the 578-unit project were sold on Friday.