Here is the situation: You buy a condominium which is under construction and make payments progressively, as stipulated.

Before the Temporary Occupation Permit is granted, the developer wants to make changes to the common areas.

However, you do not like the proposed changes and object.

The developer then annuls the sales and purchase agreement with you so that it can proceed with the changes.

In doing so, it will refund all payments made without interest.

Here are the financial implications for the buyer when the agreement is annulled by the developer before completion.

The buyer will:

•incur legal fees (typically $4,000 to $5,000);

•incur the bank's housing loan cancellation fees (typically 1.5 per cent of the loan amount);

•bear the opportunity cost of initial payments made;

•have to have enough funds to repay the bank loan first, as the developer has 21 days to pay him back, that is, the buyer cannot use the funds refunded by the developer to repay the bank loan.

If a buyer is unable to bear any of these consequences , then he must take action to avoid the annulment.

The only way is to withdraw his objection to the developer's proposed changes, regardless of whether he agrees with them or not.

Let us contrast this situation with what happens when it is the buyer who wants to cancel the sales agreement.

The developer has the right to forfeit and keep 20 per cent of the purchase price without interest, and recover all costs and expenses, legal or otherwise, incurred by the developer in relation to the recovery of possession of the housing unit.

Comparing the two situations, it is clear that the transaction terms favour developers over individual buyers.

The contract in question is the standard document used by the industry, which all developers must use in the sale of housing units in Singapore.

The Government should review some of the clauses in the document to make it more equitable for the average home buyer.

Tang Hwee Jiun (Ms)