URA: Restriction on Re-Issue of Option to Purchase for the Same Unit to Same Purchaser

THE Urban Redevelopment Authority (URA) has restricted the re-issuing of options to purchase (OTPs) to buyers of the same unit. This latest move by the URA is aimed at curbing a property market practice believed to be inflating private home sales figures, while encouraging financial prudence in home buying amid a weak economy and uncertain employment climate.

The re-issuing of OTPs refers to an arrangement some private home buyers make with a developer, via a property agent, to continually re-issue OTPs upon expiry – without any forfeiture of the booking fee. In the past, this can be done for up to a year – or even as long as up to 18 months – from the date of the first OTP. The idea is to give the buyer time, for instance, to sell his existing home.

Market researcher said that URA’s latest move may have more of an impact on Housing Development Board (HDB) upgraders and could cause spillover demand to the resale market.