FAILING to sign the option-to-purchase form may not be enough to let one pull out of a property deal.
This is especially so if the buyer’s deposit has been banked in and there are e-mail exchanges to show that a deal had been agreed upon, the Court of Appeal has ruled.
The case in point – the sale of an apartment in an Upper Serangoon condominium in May 2007.
E-mail messages were exchanged indicating that a price of $506,000 had been agreed upon and later, the 1 per cent option fee was paid and banked in.
About a week later, the seller tried to back out.
His lawyer, Mr Leslie Netto, argued that the seller was obliged to go ahead with the deal only after the seller had signed and issued the option to purchase. But the Appeals Court held that this was a ‘mere formality’ as all the conditions needed for a binding written contract had already been fulfilled in this case.
The buyer’s deposit had been banked in and the exchange of e-mail messages between both parties identified them and the property clearly. They showed that the parties had agreed on the price and the terms to close the deal.
Legally, all three Ps – parties, property and price – and the T – terms of the option to purchase – had been met and the Appeals Court said this was enough to satisfy the criteria for a binding written contract.
In law, such property deals have to be made in writing.
The judgment released last week also showed the court was prepared to recognise e-mail messages to transact a property deal.
‘The requirement of a signature had also been satisfied on the facts of the present case,’ said Justice Andrew Phang, who wrote the apex court’s 23-page grounds of judgment.
Another reason cited for enforcing the contract, or recognising the deal, in this case was the exchange of money that had taken place.
The judgment is a timely one, said lawyers and property dealers, as it makes clear that one party cannot pull out at the last minute should a better offer arise. Signing the option letter is not the point of no return in such deals.
Said Drew & Napier’s Mr Adrian Tan: ‘This is a problem that has surfaced in the last few years ever since the property boom started.’
Money has changed hands and then the parties try to get out of the deal by not signing the option forms when they see prices rise. This will not work any more, he said.
‘The Court of Appeal has conclusively established the law in this area. All home owners and property agents should take note.’
Mr Chris Koh, director of Dennis Wee Properties, said banking in the option fee of $5,060 in this case amounted to acceptance of the deal.
His advice: ‘If you are not sure of wanting to sell, then don’t accept the cheque. You cannot accept the cheque and then say you don’t want to sell.’
About the case
WHEN a couple who had been renting a unit in Rio Vista condominium in Upper Serangoon learnt that a fourth-floor unit was being sold in 2007, they offered to pay $506,000 for it.
Mr Chiranjeev Singh and his wife then gave property agent Helene Ong a cheque for 1 per cent of the purchase price, which she banked into seller Joseph Mathew’s bank account here, as instructed.
Mr Mathew was then working in India.
Four key e-mail exchanges ensued – three from Ms Ong to Mr Mathew, and one from him indicating acceptance of the deal.
But about a week later, he e-mailed Ms Ong, rejecting the offer and declining to sign the option-to-purchase form she had sent him.
Mr Mathew returned here on May 26, 2007, and went into talks with Mr Singh about the deal.
The talks failed and lawyer Boo Moh Cheh took the case to court for Mr Singh.
High Court Judge Andrew Ang ordered Mr Mathew to sign the option-to-purchase form, failing which the Supreme Court Registrar would exercise its power to sign it on his behalf.
Mr Mathew appealed to the Court of Appeal, which dismissed his suit and ordered him to pay costs.
His unit, which eventually went at the $506,000 price first agreed upon, was understood to be worth $670,000 some 15 months later.
Source : Straits Times – 10 Nov 2009
Yes, set a property quota for citizens
Posted by luxuryasiahome on November 10, 2009
I AGREE with last Saturday’s letter by Mr Joshua Selvakumar, ‘Buying private property: Set quota to help citizens’.
If nothing is done to keep property prices sane, many Singaporeans hoping to own private property will go insane. The prices for an apartment or a house at certain locations have gone up by as much as a million dollars. It is madness.
My husband and I have been saving for years to buy our dream house. We are now nearing retirement and looking at today’s prices, we can simply forget it.
Sellers raise their prices every month believing that with the influx of foreigners and permanent residents, prices will continue to escalate. Now a million dollars seems not enough when buying a property.
I wonder how the next generation will be able to own property with skyrocketing prices. Will they migrate if they cannot afford a place in Singapore they can call home? My friends and I have discussed this topic and that is our fear.
Life will be very competitive and our children may not even start a family if a basic need is not within reach.
I hope something will be done to control property prices and make them go back to the good old days when we need not bid or ballot for a home.
Wong Mei Keng (Miss)
Source : Straits Times – 10 Nov 2009
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