"The property is still under a master title. What exactly am I buying?"

Daniel finds a condominium in a mature development. The current owner has lived there for almost ten years, and the bank is prepared to finance his purchase.

However, when Daniel asks for the strata title, the seller tells him that it has not yet been issued.

“The unit is still under the master title. Everyone here buys and sells the same way.”

Daniel becomes concerned.

If the seller’s name is not registered on a separate strata title, how can the seller transfer the property to him? What will Daniel actually own after paying the purchase price?

A property without an individual or strata title can still be sold. The transaction, however, is structured differently from a conventional transfer of registered title.

1. The master title does not identify the buyer as the registered owner of the individual unit

Before separate titles are issued, the entire development may remain registered under one master title in the name of the developer or landowner.

The purchaser’s rights to a particular unit are usually evidenced by documents such as:-

• the original Sale and Purchase Agreement with the developer;

• previous deeds of assignment;

• loan and security documents;

• receipts and statements of account;

• the developer’s records; and

• documents identifying the particular parcel and its accessory parcels.

This means the seller may have contractual and beneficial rights to the unit even though the land register does not yet display the seller’s name as the registered proprietor of that particular parcel.

The proposed sale usually involves an assignment of those rights to the new purchaser.

2. The Sale and Purchase Agreement alone may not show the complete chain

Suppose the developer first sold the unit to Owner A.

Owner A later sold it to Owner B by executing a deed of assignment. Owner B is now selling it to Daniel.

Daniel must examine the chain from the developer to Owner A, from Owner A to Owner B and, finally, from Owner B to him.

A missing deed, an incomplete assignment or an inconsistency in the unit description can affect the transaction.

The documents should consistently identify:-

• the unit or parcel;

• the car park or other accessory parcel;

• the original purchase price;

• the parties to each transaction;

• the rights assigned;

• any existing financing; and

• the status of payment to the developer.

The fact that the seller has occupied the unit for years does not replace the documentary chain.

3. What is a deed of assignment?

A deed of assignment transfers the seller’s rights and interests under the earlier SPA and related documents to the purchaser.

Where no separate title is available, the bank may also take security through an assignment rather than a registered charge over an individual title.

That is why a transaction under a master title may involve documents such as:-

• a deed of assignment between the seller and purchaser;

• a deed of receipt and reassignment from the seller’s bank;

• a new assignment by way of security to the purchaser’s bank;

• notices of assignment; and

• undertakings relating to the original documents and redemption sum.

Each document performs a different function.

A deed of receipt and reassignment, for example, is generally used to release the rights previously assigned to the seller’s financier after the existing financing is redeemed.

The purchaser’s bank will want to ensure that the seller’s bank releases its security before or as the purchaser’s bank takes new security.

4. Is the developer’s consent required?

The answer depends on the type of property, the documents and the law applicable to the transaction.

For housing accommodation governed by the Housing Development (Control and Licensing) Act 1966, statutory provisions may permit an assignment to take effect through the prescribed notice process without requiring the developer’s consent, subject to the applicable requirements.

For other properties - particularly commercial properties or transactions outside that statutory framework - the principal SPA may contain contractual conditions requiring consent or confirmation from the developer or landowner.

Even where formal consent is not legally required, the developer may still need to update its records or provide information and confirmation needed to complete the transaction.

The parties should not assume either that consent is always necessary or that the developer has no role at all.

The position must be determined from the original SPA, the type of development and the applicable legislation.

5. Why does the purchaser need the developer’s confirmation?

The developer’s records may help verify:-

• the identity of the recognised purchaser;

• the unit and accessory parcels;

• whether the original purchase price has been paid;

• whether money remains due to the developer;

• whether previous assignments were notified;

• whether the strata title has been issued;

• whether perfection documents have been signed; and

• whether there are administrative charges or required documents.

A transaction can be delayed if the developer’s records still show a previous owner or if notices of earlier assignments were never properly delivered.

For an older development, the developer may have changed its name, been wound up or become difficult to contact. This makes preservation of the original documents even more important.

6. The original documents become especially important

When a separate title exists, ownership can be verified principally through the land register and the title.

Under a master title, the purchaser relies more heavily on the documentary chain. Missing originals may need to be explained, reconstructed or supported by statutory declarations, indemnities or replacement documents.

Before paying a substantial deposit, the purchaser should confirm who holds:-

• the original principal SPA;

• previous deeds of assignment;

• the original loan documents;

• the deed of receipt and reassignment;

• receipts from the developer; and

• any notices or acknowledgements of assignment.

The documents may be held by the seller, the seller’s bank, a former solicitor or another stakeholder.

Locating them only after the SPA has been signed can cause serious delay.

7. What if the strata title has already been issued?

Sometimes the seller says the property is under a master title because the strata title has not been transferred into the seller’s name. However, a separate title may already have been issued.

That changes the analysis.

The transaction may require:-

• perfection of transfer from the developer to the seller;

• perfection or registration of the seller’s financier’s charge;

• a direct transfer to the new purchaser, if the relevant parties and authorities permit it; or

• a sequence combining perfection, redemption and the new sale.

The most suitable structure depends on the status of the title, the developer’s cooperation, the existing security and the Land Office’s requirements.

A purchaser should not assume that another deed of assignment is sufficient merely because earlier transactions used assignments.

A current title search and written confirmation of the title status are required.

8. What happens when the title is issued after Daniel buys the unit?

The purchaser who then owns the contractual and beneficial rights will generally need to complete the transfer of the separate title through a process commonly called perfection of transfer.

If the property is financed, a registered charge in favour of the purchaser’s bank may also need to be completed through perfection of charge.

This involves additional documentation, stamping, registration and costs.

The purchaser should retain all transaction documents and keep his contact details updated with the developer, management body and bank so that notices concerning the title are not missed.

Purchasing under a master title does not mean the purchaser can ignore the title indefinitely once it is issued.

9. What other matters must be checked?

The absence of a separate title is only one part of the due diligence.

The purchaser should also examine:-

• the master title and its restrictions;

• the remaining tenure;

• the approved use of the land;

• the seller’s financing;

• management charges and sinking-fund contributions;

• the status of the developer;

• the approved parcel and car park;

• occupation or tenancy;

• outstanding taxes and utilities; and

• any dispute affecting the unit or development.

The purchaser’s financier may impose additional conditions before releasing the loan.

10. A master-title transaction is not necessarily defective, but its documents matter more.

Many properties are lawfully occupied, financed and sold before separate titles are issued.

The risk does not arise simply because there is a master title. It arises when the parties do not verify the chain of rights, the security documents and the current status of the separate title.

Daniel may still proceed with the purchase.

Before doing so, he needs to understand that he is initially acquiring the seller’s documented rights to the unit - not receiving immediate registration of his name on a separate title that does not yet exist.