Earlier this year, a couple was left in a difficult situation after the owner of a three-bedroom condominium unit they had purchased with a 1% option fee suddenly decided not to sell.
The couple had just sold their HDB flat and would be without a home by September 2022. However, the condo owner had a different version of events.
So, what exactly happened?
Timeline of Events
Around February or March 2022, the couple sold their HDB flat and asked their real estate agent to find a condominium in the western part of Singapore. They estimated they could buy a three-bedroom unit for about S$1 million.
On March 8, they came across this condominium unit at Choa Chu Kang Loop and made an offer of S$1.058 million through the owner’s property agent.
On March 10, the owner, who was living in Myanmar at the time, confirmed through his property agent that he agreed to sell for S$1.058 million. The agent then sent him an Option to Purchase (OTP) via a WhatsApp message.
On March 18, the owner sent a duly signed OTP to his agent via WhatsApp, who then forwarded it to the buyers’ agent. In fact, the owner signed the document twice because the initial first copy was not clear.
On March 19, the couple transferred the 1% deposit of S$10,580 to the owner via PayNow.
On March 22, the seller’s agent informed the buyers’ agent that his client had sent the original OTP (we assume this refers to the physical document). Since the couple had not yet received the original OTP, they proceeded to exercise the option (as they had received the electronic copy via WhatsApp on March 18).
On April 6, the couple’s lawyer proceeded to exercise the option and sent a cheque for 5% of the sale price (minus the deposit) to the owner’s lawyer. However, the law firm refused to execute it because the owner had not appointed them to act on his behalf for this sale.
On April 11, the couple’s lawyer sent a letter of demand to this lawyer, requesting them to proceed with accepting the option and completing the sale and purchase of the property. The dispute could not be resolved, and the matter eventually went to court.
Conflicting Accounts
According to the couple, since they had already sold their HDB flat, they had to move out by September 2022. The condo owner’s refusal to accept the option left them without a place to live.
However, the condo owner had a different story. He told the court that he had initially asked his agent to market the apartment with an initial asking price of S$1.2 million. The couple’s offer of S$1.058 million was below his expected price, so when he received the offer via WhatsApp, he told his agent he needed some time to consider the price.
He also asked the agent to get a valuation before he decided whether to sell.
He claimed that his agent did not inform him that the buyers would transfer the deposit via PayNow, and he did not instruct his agent to receive the option fee via PayNow. Instead, he wanted payment by cheque.
He also alleged that he signed the OTP (for the sale price of S$1.058 million) in the presence of his brother because his agent had been pestering him. When he sent the signed OTP to his agent, he told his agent that he could not sell at that price because he felt the price was “very unfair to him”.
The condo owner also did his own research and found that a similar unit in a nearby block in the same area was sold for S$1.24 million in December 2021. He believed his agent had not done his due diligence and had misled him on the price.
This was why he cancelled the deal on March 31 and did not instruct his lawyer to proceed.
The condo owner also said he had a son with autism who was slowly adapting to the house and its surroundings. If he were to sell his condo now, it would be difficult for his family to readjust.
He even offered to return the deposit to the couple. When he tried to transfer the fee to them, he was unable to do so. He then claimed the couple tried to block his attempt to refund the option fee.
The Judge’s Verdict
The judge stated in the ruling that the OTP document—although signed digitally and transmitted via WhatsApp between the buyers, agents, and seller—already contained all the essential details of the transaction, including their names, the property, the amount to be paid, and so on. In other words, it was a valid document.
Regarding the condo owner’s claim of being coerced (while in Myanmar) into signing the OTP and being reluctant to sell the property at the agreed price, the judge found insufficient evidence to support it. The WhatsApp messages did not show that the owner was unwilling to sell the property for S$1.058 million. The act of signing the OTP in the presence of a witness already contradicted his claimed intentions.
If the owner did not want to sell the property at that price, he should have refused to sign the OTP. In fact, the owner signed the OTP twice.
As for wanting to receive payment by cheque instead of PayNow, there was no evidence in their WhatsApp communication that the condo owner had informed his agent that he did not want a PayNow transfer and preferred payment by cheque. The OTP document even explicitly stated that the deposit would be paid via “Paynow transfer,” and the condo owner had in fact linked his national identity card details to his savings bank account to facilitate the buyers’ transfer of the option fee via PayNow.
“The only reason the defendant (condo owner) decided not to complete the transaction was because he subsequently discovered that another property in the same area had completed a transaction at a higher price,” the judge ruled.
“If the defendant believed that (his agent) had not conducted due diligence before advising the defendant on whether he had received a fair offer (as he claimed), then it is up to the defendant to pursue this matter with (his agent).
“As for his son’s condition, it is irrelevant to whether the option is valid.”
The judge ruled that the condo owner never considered his son’s condition as an issue when discussing the timing of the condo sale with his agent. A WhatsApp message excerpt from March 1 presented in court indicated that the condo seller was eager to sell, regardless of his son’s condition:
Defendant: Bro, how’s the house sale coming along? It’s been a few months we didn’t get good offer right bro?
Agent: The best offer was 1.07m. Most prospects feel that the whole house needs reno and it’s a huge cost.
Defendant: 1.07m is not bad I see.
Agent: Yes but that offer is gone. I will work towards that.
Defendant: OK bro. Hope to close the deal soon.
The judge therefore ruled that the condo owner had breached his obligations under the OTP.
The judge ordered the owner to proceed with the sale and purchase agreement and complete the transaction by September 2022. Accordingly, the new buyers could take possession of the property as planned.
Meanwhile, the condo owner and his family could continue to live in the property.
What is clear here is that once an Option to Purchase (OTP) is signed, it is usually very difficult to change one’s mind. For buyers, if they want to back out after signing the OTP, their deposit will be forfeited to the seller.
Confirming an Option to Purchase requires a non-refundable deposit, and it is a legally binding document.
For the seller (in this case, the condo owner), if they back out, they must return the option fee. Most importantly, the buyer may sue the seller for “specific performance,” which is typically a court order requiring the defaulting party to fulfill their contractual obligations.
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