Singapore Government Media Release
Media Division, Ministry of Information and The Arts,
140 Hill Street #02-02 MITA Building, Singapore 179369.
Tel: 837 9666

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The Government has accepted the recommendations of a Committee to abolish the conveyancing scale fees over the next 2 years. With the abolition of conveyancing scale fees, legal fees charged by lawyers for handling property transactions will be freely negotiable.

Currently, these legal fees are fixed according to a mandatory sliding scale set out in the Legal Profession (Solicitors’ Remuneration) Order. The scale presently applies to all property transactions valued below $5 million.

With effect from 1 March this year, the scale will only apply to property transactions of up to $2.5 million, leaving the legal fees for properties valued above $2.5 million free for negotiation. The complete abolition of the scale fees will take effect on 1 February 2003. Thereafter, buyers and sellers of all types of property will be able to freely negotiate legal fees with their lawyers.

These changes were proposed by the Conveyancing Fees Review Committee chaired by retired Supreme Court Judge Mr Goh Joon Seng. The Committee was appointed by the Minister for Law in May last year to consider whether the conveyancing scale fees should be modified or abolished. The Committee included representatives from the Law Society, the Consumer Association of Singapore (CASE), the Real Estate Developers Association of Singapore (REDAS), the Association of Banks in Singapore, the Finance Houses Association of Singapore and the Ministry of Law.

This round of changes is a follow up to the last round of revision which took place in 1995. Then, a Committee led by Justice Chao Hick Tin recommended that the conveyancing scale fees be retained but be reduced across the board by between 14% and 31%. Justice Chao's Committee felt at that time that there was still justification for retaining the conveyancing scale fees but also recognised that this would have to be reviewed in future in light of changing circumstances. In accepting the gradual approach recommended by the 1995 Committee, Minister for Law Prof S Jayakumar said in Parliament that "the complete abolition of the scale fees is a matter of time, and ... the legal profession should use this time to prepare itself for the free market."

Since then, several developments have made it necessary for the scale fees to be abolished. There has been an increasing trend both in Singapore and internationally towards the liberalisation of the economy. The conveyancing scale fees are now the only set of professional fees in Singapore which are fixed by law. Singapore is one of the very few countries which still retain a fixed scale for conveyancing fees. Increasing computerisation of government agencies, the simplification of the conveyancing processes, the expected complete conversion of all land in Singapore to registered title, are all developments which make it now timely for the conveyancing scale fees to be abolished.

Mr Liew Heng San, the Permanent Secretary of the Ministry of Law said: "The scale fees is an anachronism in a free market economy. The proposed changes will allow free market forces to determine the level of conveyancing fees, giving buyers and sellers of property the freedom to negotiate legal fees and greater freedom of choice. At the same time, the decision to phase-in the abolition over the next 2 years will give all concerned sufficient time to adjust to the changes, ensuring a smoother and more orderly transition."

For media enquiries, please contact Mr Pang Khang Chau, Deputy Director (Legal Policy) at DID: 332-8823 or e-mail: pang_khang_chau@mlaw.gov.sg