United Overseas Bank (UOB) has reaffirmed its offer to bear the additional costs to complete the construction of two unfinished residential projects in Singapore which have been put under receivership.
The bank, which is the mortgagee in two incomplete projects - Sycamore Tree and Laurel Tree - told local newspapers that its offer remains conditional on the home buyers waiving their rights to claim liquidated damages, or compensation that developers must pay buyers for delays.
«UOB's offer will save homebuyers from having to make additional fund top-ups beyond their agreed unit purchase price. This is subject to all the homebuyers agreeing not to deduct any claims for liquidated damages against their remaining scheduled payments to be made into the project accounts,» said a UOB spokesman who was quoted in «Business Times» (Behind paywall).
Tender Process Started
The receivers for both Sycamore Tree and Laurel Tree have started a tender process to identify financially sound and quality contractors to determine the cost to complete the construction. «Given the complexities and after evaluating the various possible courses of action with new contractors assessing and taking over the completion of the delayed projects, we have offered to cover the additional costs expected to be incurred,» the spokesman added.
Based on the sale and purchase agreement, the developer will have to pay liquidated damages of 10 per cent per annum of what buyers have to pay. The waiver is necessary to protect future progress payments from potential liquidated damages, which could result in insufficient funds to complete the projects.
Examining Project Accounts
About 183 people were affected when construction of the 70-unit freehold condominium at Laurel Tree in Hillview Terrace and the 96 residential units and 17 shops at Sycamore Tree in Joo Chiat, stopped after the project accounts were found to have insufficient funds for the next phases of construction.
The two freehold projects were supposed to have received their Temporary Occupancy Permit in 2016. Astoria Development was the developer behind Sycamore Tree, while Lerida was the developer of Laurel Tree. Both developers are linked to Tan Hock Keng, a former property player. The Controller of Housing at the Urban Redevelopment Authority is studying the project accounts of the two projects to check whether money earmarked for them has been misused.
