When a TOP (Temporary Occupation Permits) is released, it simply means that the buyer can occupy or start earning from it by renting it out.
TOP projects are incomplete projects but who’s TOP has already been issued.
How do TOP projects work?
When a structure is still being built, the BCA (Building and Construction Authority) evaluates the property at different phases of construction and decides if it is in accordance with occupation standards.
Meantime, buyers who purchase the property before it is ready to be occupied, usually pay according to the phase of completion it is in.
After the TOP’s release, the buyers are informed that they can claim their keys, check / furnish / modify their unit and occupy it.
A TOP, however, does not necessarily mean the development is officially finished. It usually takes a couple of months or years before the structure is declared by the BCA as “completed”.
Once the building is confirmed as “completed”, only then will the Authority for Building and Construction or the BCA issue a Statutory Completion Certificate or CSC
What makes a TOP project stand out?
If placed in a completion timeline, a TOP project is in the middle of “under construction” and “resale” properties.
An advantage which a TOP project enjoys is that it allows buyers to occupy the property without having to wait for its completion. In addition, it also allows investors to enjoy rental income immediately.
When a purchaser buys TOP property, he is most likely to possess that unit even if it had been purchased from a preceding purchaser. This frees them from the hassle of fixing up older properties.
**Like Belgravia Villas, this cluster landed will be obtaining their TOP and hence selling very well the past few months. You may find how spacious this development is by visiting Belgravia Villas floor plans.
Buying at Launch vs Buying at TOP Issuance
Payment schedules for TOP properties are different when compared to those of buyers who purchase at launching.
Buyers at launching pay according to stages of completion. Each payment falls due when a phase of construction is reached. For example, X pays 5% to 10% booking fee if he wants to be granted a purchase option. X pays another 20% less the booking cost and less the stamp duty upon signing the sales and purchase agreement.
Upon signing, X pays 10% to 15% of the price every time progress milestones are met. Once the TOP is finally issued, X pays 25% of the selling amount.
By this stage, X has already paid 85% of the total purchase price. The balance of 15% is paid upon full completion.
On the other hand, TOP project buyers need to prove financial capability. There is more time constraints when it comes to raising the cash aspect. Plus, they have to process bank loans in less time.
TOP project prices are usually higher because the property is ready for occupancy and infrastructure (such as roads and transport points) are usually up.
Despite the austere set up of a TOP project, one-advantage investors can look forward to be immediate rental income. TOP projects are also more reasonably priced compared to resale property. It is easier to maintain since the property is new. If there are unsold units, the potential buyer can choose among different units.
All in all, TOP projects are more flexible – a great reason why this project is an attractive option for both home and investment purchases.
** Another Freehold development, City Suites @ Balestier has just obtained their TOP. This development is city fringe.