Forum: Address issue of developers continually reissuing option to purchase

Buildings around Chinatown.
Buildings around Chinatown.ST PHOTO: LIM YAOHUI

I read with apprehension media reports about the tactic used by some private property developers of continually reissuing options to purchase to buyers upon expiry, without the buyer forfeiting part of the booking fee. This pushes sales figures up. Though it may be a smart business move, it is unethical.

A false impression of a hot property market may be created, leading to anxious buyers making rash decisions.

It may encourage home buyers to take a gamble on a big-ticket item, which may result in bankruptcy for some speculative investors.

With the coronavirus pandemic not ending any time soon, buyers must manage their financial obligations carefully before taking on huge commitments.

The authorities must address this loophole before buyers are led into making a big financial commitment, only to regret it later.

Perhaps one way is to reduce the number of times a developer can reissue an option to purchase to two, which is reasonable.

A genuine buyer would have done his homework before making a big financial commitment. There is no reason for him to keep requesting an extension of the option deadline.

Foo Sing Kheng

A version of this article appeared in the print edition of The Straits Times on June 30, 2020, with the headline 'Address issue of developers continually reissuing option to purchase'. Print Edition | Subscribe