Introduction
Landed residential properties are regarded as prized assets and many people aspire to own a piece of land in land-scarce Singapore. Indeed, the ownership of a landed residential property is often synonymous with exclusivity, privacy and prestige.

Of particular relevance in the purchase of landed residential properties is the land area of the property. This issue is more often than not resolved with a land title search on the address of the property, which would reveal the land area of the property in question.

However, this newsletter highlights that the pertinent point to take note by prospective purchasers should actually be the boundary of the land area and not just the land area per se.

We analyze the concluded High Court case of [2017] SGHC 51 (“the Case”) to highlight the importance of being able to identify the land area with respect to its corresponding boundary. In other words, it is necessary to know what the land area does or does not
include.

Facts
The Purchasers found a landed residential property (“the Property”) where the advertisement described the Property’s land area as “2,775 sqft” and priced at $2,800,000. The Purchasers visited the Property on a few occasions and were shown the Property from the entrance to the back of the house, i.e., to the back boundary wall by the Vendors. There was a drain outside the back boundary wall. On one occasion, the Vendors told the Purchasers that they could build over the drain as one of the neighbours had done. The Purchasers did not think much of the Vendors’ comment at that time. Subsequently, the Purchasers exercised the option to purchase the Property.

After completion of the sale, the Purchasers decided to renovate the Property and engaged a surveyor who drew a topographical survey plan from which the Purchasers discovered for the first time that the total land area of the Property included a drain outside the back boundary wall. The area of the drain was approximately 272 sqft.

The Purchasers then sued the Vendors for damages comprising the price difference between 2,775 sqft and 2,503 sqft (that is, 272 sqft) and the difference in stamp duty payable.

The Purchasers relied on two main causes of action:
1）misrepresentation under the Misrepresentation Act (Cap 390, 1994 Rev Ed) and at common law; and
2）breach of contract.

Issues & Findings
Misrepresentation
In order for the Purchasers’ claim to succeed on misrepresentation, they had to prove that the Vendors or their property agent represented to them that the Property’s land area of 2,775 sqft being sold did not include the drain area.
The Purchasers were unable to prove that the Vendors or their property agent had expressly stated that the Property within the back boundary wall was 2,775 sqft or that the drain was not part of the stated area of 2,775 sqft of land.

The court found that it was insufficient merely to say that the advertisement stated that the Property had a land area of 2,775 sqft because this was not a representation as to what the area does or does not include. Similarly, the court also found that it was insufficient to state that just because the drain had not been specifically pointed out to the Purchasers during their viewings, the Vendors (or their property agent) had thereby represented by their conduct that the drain did not constitute part of the Property.

It should be noted that even assuming that the Vendors were aware that the drain was part of the Property, there was no evidence that they knew that the Purchasers were laboring under the mistaken area of the Property. As the Purchasers were unable to prove that there was willful suppression of material facts beyond mere silence, the misrepresentation claim failed.

Breach of contract
In relation to the claim for breach of contract, the court examined the terms of the option to purchase (“the Option”) and found that there was nothing in the Option that expressly indicated that the Property did not include the drain area. On the Purchasers’ argument that a term as to “land area” should be implied, the court held that even if it were minded to find that there was an implied term as to “land area”, that would not account for whether or not the drain was part of the land area of 2,775 sqft. The Purchasers had not proven that an implied term that the land area of 2,775 sqft only extended up to the back boundary wall and excluded the drain area.

Furthermore, the Option had expressly stipulated that the Property was sold subject to satisfactory replies to the usual requisitions. All the relevant requisitions had been properly made, and the results were duly brought to the Purchasers’ attention and explained to them. The Purchasers had not claimed that the replies were unsatisfactory.

The Vendors had advertised that the Property for sale had a land area of 2,775 sqft and when the sale was completed, they conveyed the Property with the full 2,775 sqft to the Purchasers.

In addition, there was a reply to a requisition from the Public Utilities Board which stated that there was a common drain within the Property. While the Purchasers should have clarified this with the Vendors, they did not raise this issue and went ahead to complete the purchase.

Significantly, the court held that the Purchasers would not have succeeded in rescinding the contract because it was not a term of the contract that the land area of 2,775 sqft excluded the area of the drain.

The court further held that the “as is where is” clause in the Option was applicable in the circumstances. It was incumbent upon the Purchasers to inspect the Property before deciding whether to exercise the Option, or at least ensured that any uncertainty was resolved in the terms of the Option before exercising it.

Ultimately, the court ruled that there was no breach of contract by the Vendors.

Conclusion
The decision of the Case emphasises and underscores the gravity that purchasers of landed residential properties must be certain of what the land area does or does not include. The unfortunate consequence flowing from the purchaser’s assumption as to the land area of the property and its corresponding boundary, without seeking clarification from the vendor, could lead to costly mistakes.

At Sim Mong Teck & Partners, our conveyancing team prides ourselves as being alert and updated on the latest property-related matters and has a wealth of experience and knowledge on such topics. This allows us to provide you with sound and bespoke advice on your queries.
Should you have any questions pertaining to your property or other conveyancing matters, please reach out to our lawyers or Business Development team.