1 Answer

askguru expert
Hi there, thanks for writing to us on AskGuru.

Any other agreements and/or supplementary agreements relating to the sale or purchase of the flat are not valid under the Housing and Development Act.

The seller can't back out of the agreement once he or she collects the option fee and issues the Option to Purchase (OTP).

When a property buyer has an Option (the right), he has the right to demand for the seller's title and to demand that the seller goes for legal completion. Whoever the Option is assigned or transferred to (if assignment is allowed) will enjoy the same right.

In order for the right to arise, the buyer must do the following two steps:

1. Pay the property seller the Option Money which is equivalent to $1,000.
2. Within the stipulated Option Period (usually within 21 days of the Option), exercise the right by signing the 'acceptance copy' of the Option form, and paying another $4,000.

The law of contract states that there must be the following elements for a contract to be binding:
1. Intention to create legal relations
2. Offer (such as issuing of option to purchase to the buyer)
3. Acceptance (buyer has exercised option to purchase by signing the 'Acceptance Form')
4. Consideration ($5,000 deposit as a promise to purchase the HDB flat)

If all the above requirements are satisfied and buyer has signed the option to purchase, the contract is legally binding. Neither parties can retract without facing any legal consequences.

If the seller does not honour his contract, there is a breach of contract where you can sue for damages, specific performance and injunction. The damages will be ascertained by the court. The court may also compel the seller to complete the performance of the contract and to go to the completion stage. The court may also issue an injunction to refrain or prohibit the seller from doing certain things.

Hope this answers your question.

Best Regards,

Team PropertyGuru Read More

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