COMPLIANCE WITH LEGAL FORMALITIES IN REAL ESTATE TRANSACTIONS

Abstract

Formalities provide an evidential function to a contract. It brings certainty to the terms and intentions of the agreement. For important and valuable transactions such as real estate, formalities play a key part in protecting the rights and interests arising from the ownership of the asset. Section 6(d) of the Civil Law Act (“CLA”) stipulates that no action shall be brought on any contract involving the sale of interest in immovable property unless it is evidenced in writing and signed. In this day and age, electronic correspondences are widely used as a means of communication between parties. It is not inconceivable for property buyers and sellers to conduct their negotiations through electronic mail (“email”). Given that section 6(d) of the CLA was enacted at the time when the use of electronic records was not as prevalent as it is today, the question then arises whether the law has kept up with the advancement of technology. This paper seeks to examine the Singapore court’s position on the use of electronic records to satisfy the legal formalities under section 6(d) of the CLA. With the aid of professional insights from three real estate lawyers, the paper attempts to comprehensively analyse two local cases and investigate the legal disputes arising from the requirement of formalities. The findings revealed that electronic records are not conclusive evidence of a real estate contract under the eyes of Singapore law. Nonetheless, they are still capable of complying with the legal formalities subject to the facts and circumstances of the case. However such forms of contracts are strongly discouraged by legal practitioners.