This Is Why You Should Consider A TOP Condo

New home buyers and property investors in Singapore looking to purchase a property either for owner-occupation or investment no doubt have plenty of choices – from new launches, newly completed developments to resale properties.

Being able to take possession of a TOP property at the point of purchase is an attractive feature that has made TOP projects quite popular amongst homebuyers and investors alike.

But first, what exactly is a TOP project?

“The TOP is issued when the BCA is satisfied that the property or part thereof can be safely occupied.”

TOP projects are properties whose temporary occupation permit (TOP) has been issued, but which have not yet been fully completed.

When a development is under construction, the Building and Construction Authority (BCA) vets the property at various stages to determine which stage of construction it is at and, eventually, whether it is fit for occupation.

The TOP is issued when, upon completing an inspection, the BCA is satisfied that the property or part thereof can be safely occupied.

Buyers of new developments typically commit to the purchase years before the property is ready for occupation. They usually pay for the property in stages, according to which stage of construction has been completed.

It is only after the release of the TOP that buyers are notified that they may collect their keys, inspect the unit and move in.

That means their units are ready for habitation and can now be furnished and modified within the limits allowed by the building’s administration.

However, that does not mean the building is officially completed. As is often the case, certain common areas may not be accessible at the TOP stage.

It often takes a few years before the building is declared completed by the BCA, who will then issue a Certificate of Statutory Completion (CSC).

For those considering TOP projects, here are some enticing attributes about them that will likely win you over.

Available right away

One of the main reasons why buyers pick TOP projects over new launches is the fact that the development and facilities are already completed, and buyers can move in almost immediately, which is great for those who are planning to get married and set up a home as compared to a new launch, which will take a few years to build.

In addition, a TOP project also presents the opportunity of purchasing a unit at a sold-out development, by buying over from another buyer who no longer wishes to own the unit – this is called a sub-sale.

Home buyers are also saved from having to source for other types of accommodation in the interim, which is particularly pertinent to local couples who would otherwise have to live with their parents or pay rent.

The only other alternative for purchasers who wish to take possession immediately is resale property, which can be administratively more onerous, since home inspections must be arranged and renovations are likely to be needed.

What you see is what you get

Truth be told, often what home buyers see in a showflat may not be an actual representation of what the completed project will be like. We’ve heard countless stories from home buyers who were disappointed that the actual completed project pales in comparison to what they saw in the showflat. As such, it might be a better idea to shop for TOP projects, as you can be assured that what you see is exactly what you’ll get.

This means buyers will not have to use their imagination and will be able to assess first hand if they like the fixtures and fittings or the different views from the units. They will also be able to appreciate the orientation of the unit.

“What you see is what you get, and there are no surprises here. With ready-to-move-in homes, there’s no possibility of discrepancies in layouts, features, or amenities, since everything is available for inspection beforehand,” Dr. Tan Tee Khoon, Country Manager, PropertyGuru Singapore, said.

“For those buying for rental yield, TOP homes can be let out instantaneously.”

Immediate returns on investment

Investing in a TOP project also presents one of the faster ways to generate rental yield. As soon as you get the keys, you can immediately rent out your unit and use the rental payments to offset the cost of the purchase or the monthly mortgage payments. This way, you’re already getting a return on investment ahead of the development’s official launch.

“For those buying for rental yield, TOP homes can be let out instantaneously and given the current red hot leasing market it would mean quicker realisation of rental gains,” noted Dr. Tan.

Dr Tan also shared that usually at TOP, developers would likely give a discount on remaining inventory to expedite sales in order to meet their 5 year ABSD deadline. This means buyers may be able to snag enticing deals.

One-year defects liability period

Finally, another draw of TOP projects is the 12-month defects liability period offered by developers, which ensures that they are legally required to fix any genuine defects in the property at their own expense. This gives investors peace of mind from knowing their property is in good working order.

Common defects checklist

Uneven layering of floor tiles: Check for hollow tiles, hairline cracks, chips or discolouring.
Water flow: Be sure to check the shower areas to ensure that the drainage is working properly and water ponding does not occur. For the kitchen basin and other sinks, make sure there is no chokage.
Carpentry: Check for any defects in the carpentry. Make sure the doors are properly aligned, and check for rust.
Windows/Doors: One of the first things to do when you enter your new home is to open and close all the windows and doors to make sure it is working smoothly. Make sure to test the locks and if the keys can open them easily.
Toilets: Ensure that the toilet can flush well. Also, check for any cracks on the toilet bowl.
Walls: Check for cracks or water seepage.

What else to look out for?

As with any other type of new property, the fundamental rules of investment remain the same when it comes to TOP projects.

Location, location, location. To maximize ROI, invest in TOP developments in areas with existing infrastructure and transport links. These properties will generate more interest among would-be tenants.
Choose a great developer. Great developers have the needed industry experience, relationships with engineers and architects, and access to quality materials to deliver outstanding projects to their customers.
Freehold vs. Leasehold. A leasehold means that you own the property for a fixed number of years. After the lease expires, the property is relinquished to the state. A freehold grants indefinite ownership of the property. Each setup has its pros and cons. For example, a freehold unit is generally more expensive than its leasehold counterpart in the same building or area.

While the decision of whether to buy a new launch or TOP project will mainly be influenced by your needs, such as whether you need the house urgently, or whether you can afford to wait.

However, keep in mind that you’ll need to pay the full condo price when buying a TOP property, which unlike a newly-launched property that hasn’t received its TOP, there is no Progressive Payment Scheme.

TOP projects offer buyers more flexibility and choice than both new launch and resale property, thus making them very attractive as home or investment purchases.