RES exam question on Private Property Sale: A buyer exercises an Option to Purchase and proceeds towards completion
Case study — A buyer exercises an Option to Purchase and proceeds towards completion. The OTP has been validly exercised. Lawyers are instructed. Evaluate the statements: (i) Exercising the OTP brings the parties into a binding sale (the S&P stage) (ii) Completion involves paying the balance and transferring title (iii) Conveyancing is typically handled by the parties' lawyers (iv) Title transfers the moment the OTP is first granted Which statements are CORRECT?
- A(i), (ii) and (iii) only
- B(i), (iii) and (iv) only
- C(i), (ii), (iii) and (iv)
- D(ii), (iii) and (iv) only
Show answer & explanation
Answer
A. (i), (ii) and (iii) only
Explanation
(i) is correct: validly exercising the OTP brings the parties into a binding sale at the S&P stage. (ii) is correct: completion involves paying the balance of the price and transferring title. (iii) is correct: conveyancing is typically handled by the parties' lawyers. Hence (i), (ii) and (iii) only.
Why the other options are wrong
- (iv) is wrong: title does not transfer the moment the OTP is granted, as transfer occurs at completion.
Study the concept behind this question: OTP Singapore: Option to Purchase Fee, Period & Exercise
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