Important rules of Option to Purchase – Property for rent in Singapore
(1) It is a right granted to the buyer to buy. It stops the seller from offering the same property to another prospective buyer up to and including the expiry date of the option. When the Option provides for ‘and/or nominee(s)’, the seller has to accept the contract with the eventual option holder. Property for rent in Singapore.
(2) It does not compel the buyer to buy. If the buyer decides not to go ahead with the purchase, he is free to walk away from the deal, losing only the option money.
(3) It compels the seller to sell. The OTP compels the seller to enter into a contract with the option holder, whoever the holder may be, unless there is a provision prohibiting the assignment of the Option. Once a binding contract is formed, neither party could retract from the contract without facing the legal consequences.
(4) The seller has the right to forfeit the option money. In the event that the buyer decides not to go ahead with the purchase, the seller has the right to forfeit the option money and thereafter no party can take any further action or claim against the other.
(5) Where a vendor gives an OTP to a prospective purchaser, he is making an offer to sell his property at a specified price and upon the terms and conditions stipulated in the OTP.
(6) In consideration of the ‘option money’ paid by the prospective purchaser, the vendor thereby agrees to keep the offer open for the purchaser’s acceptance, until the expiry of the appointed day and time specified in the OTP.
(7) Without payment of the ‘option money’, the vendor is free to revoke his offer, at any time before acceptance by the prospective purchaser.
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