URA Impose Stricter Rules on Private Home Purchase Procedures
Starting 28 September 2020, developers are not allowed to re-issue options to purchase (OTPs) to the same buyer of the same unit within 12 months after the expiry of the earlier OTP according to the Urban Redevelopment Agency (URA). Additionally, they are also barred from providing upfront agreements to buyers to re-issue OTPs. Both moves by the URA are targeted at controlling a property market practice believed to be inflating private home sales figures, while pushing for careful spending in the middle of a pandemic caused recession and foggy employment climate.
The re-issuing of OTPs refers to an arrangement some private home buyers make with a developer via a property agent to constantly re-issue OTPs upon expiry without any booking fee forfeit. In the past, this can be done for up to a year or in some cases, 18 months, from the date of the first OTP. This gives the buyer time to sell his existing home, for instance.
While the current validity period in the standard OTP is generally sufficient for most purchasers to exercise it, the Controller recognizes that there may be some buyers who require more time to finalize necessary arrangements before exercising the OTP.
Buyers who want to extend the OTP’s validity period will need to write in to email@example.com, with the following details:
- a copy of the OTP;
- expiry date of the OTP; and
- reasons for requiring more time to exercise the OTP
Upon application by such purchasers or developers, the Controller is prepared to extend the expiry date for up to 12 weeks provided that all parties are in consensus.