Developers (General) : Project Account

Q1: What is a Project Account?
Q2: What is the purpose of a project account?
Q3: Do I need to open a Project Account if I don't need to sell any of the units in my development?
Q4: How would I know if I have surplus money in my Project Account?
Q5: Are there any exemptions for opening a Project Account?
Q1: What is a Project Account?

It is an account opened by a developer with a bank or finance company before the issue of a sale license for each project undertaken. The developer must deposit all progress payments received prior to obtaining the Temporary Occupation Permit, and any construction loan into this account.
Q2: What is the purpose of a project account?

It is to protect the buyers, so that all payments received and loans granted for the building project are channelled into the construction of the building and not into other investments held by the developer.
Q3: Do I need to open a Project Account if I don't need to sell any of the units in my development?

No. You will be exempted from opening a Project Account in this case.
Q4: How would I know if I have surplus money in my Project Account?
The surplus money from your Project Account is the balance after deducting:
1) money to complete the building project;
2) the amount required to repay all outstanding loans construction loan;
3) other fees incurred on the building project; and
4) 20% of the balance amount for contingencies.
Q5: Are there any exemptions for opening a Project Account?
Yes. The Housing Developers (Control and licensing) Act provides exemptions for the following :
1) when the building is not for sale;
2) when the developer furnishes a banker's guarantee for an amount equivalent to not less than 140% of the total cost of construction of the building project as certified by the architect;        
3) if the building project is carried out under any building agreement with the URA
 
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