Reissue Option |Danny Teo | URA

URA announced on 28/09/2020 a tighter restrictions regarding the new launches. They have issued a circular that puts a restriction on the reissue of options for the same unit for the same purchaser so this new restriction takes effect today of all option to purchase issue from today 28/09/2020 onwards. Some of the key points in this circular , under developers option to purchase when the sales and purchase agreement reaches the purchaser and developers have two weeks from the date of booking to send the sales and purchase agreement to the purchaser ,the purchaser has three weeks to exercise the OTP by signing the sales and purchase agreement so once the sales and purchase agreement has been signed it becomes a binding agreement however in recent times right there has been many instances of the OTP being reissued multiple times to the same buyer to of the same unit and this has lengthened the OTP or the option period significantly so the rationale for this new restriction is that in deal of the challenging times ahead of some circumstances may change down the road and therefore if buyers are not ready to actually buy the unit they may lose their money , the key point of putting a restriction is that the monthly figures being reported currently may have been distorted by the multiple issues of OTP so to ensure transparency in the market URA has come up with this new restriction , all new OTP that is issue wef today , the developers cannot enter into any upfront agreement with the purchaser to reissue the otp that means once the OTP is issued if you book a unit from today onwards .OTP is issued the normal timeline will run that means developers have up to two weeks to deliver the s&p to you to the purchaser purchaser then have three weeks to sign the s&p so the normal timeline will run, there will be no more upfront agreement that is signed between the purchaser and the developer okay so if the purchaser for whatever reason failed to sign the smp and request for any otp to be reissued the the current the new circular places a restriction on the developer the developer is not allowed to issue otp to the same purchaser of the same unit within 12 months from the expiry of the first otp that means no more reissuing of otp and even if you want to do it after the first otp expire they cannot issue the same the otp to the same purchaser for within 12 months of the expiry however there may be instances that purchaser requires a extension of time due to genuine reasons for example he just saw his unique he needs to complete the sale before he can have the funds to purchase the unit and he need a slightly longer time to to exercise the otp if that is a genuine case then the new process allows for an application for approval and this application will go to the controller of housing which will then assess it on the case-by-case merit so you will have to support and you will have to enclose supporting documents like a copy of the otp what is the expiry date of the otp and the reasons for requiring more time to exercise the otp all right so if approved the extension of time it is only a very short extension the normal it will be extended up to 12 weeks from the date of the otp that means the otp that was issued by the developer the date to exercise the otp can only be extended up to maximum of 12 weeks from the otp date so it’s not a fault it’s not a very long extension it’s just a extension for genuine extension of time to in order to exercise otp . So this affects all otp that is issued from today onwards so what happened to otp or arrangements that have been made in the past? . Good question that I’m not able to answer you. LOL. purchaser to grant him a longer time uh to secure his finances by reissuing otp so this this commitment happened before today that means uh the otps that were issued uh in the last couple of weeks all right before the 28th of september so is the developer allowed to honor the commitment to allow him to uh secure his finances and exercise otp so will will he be allowed so the short answer to that is that for commitments that have been made prior to today all right developer um will be a lot all right to honor uh the agreement okay however all right however for otps issued from today onwards developers are not allowed to grant any extension of not allowed to reissue the otp to the same buyer okay so whatever uh prior arrangements all right uh that have been made before today 28 of september a developer is allowed to honor them all right so but for all options to purchase re issued from today onwards there is no extension of time unless for genuine cases which you then have to support apply for extension of time from the controller of housing which will evaluate each case by its own merits and if extension is given is only a maximum of 12 weeks from the date of the otp so it’s not a very long extension all right so this circular i believe is being sent out to all era teammates and you can read the details so this briefing is just for for your easier understanding so that is all thank you very much you

2 thoughts on “Reissue Option |Danny Teo | URA”

  1. James

    December 21, 2020

    Awesome

    Reply
  2. Danny Teo

    December 21, 2020

    Thanks!

    Reply

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