RES exam question on Private Property Sale: Under the Law Society of Singapore's Conditions of Sale (as commonly incorporated into…
Under the Law Society of Singapore's Conditions of Sale (as commonly incorporated into private property OTPs and S&P Agreements), if the seller of a property fails to pay the required Seller's Stamp Duty (SSD) by the legal completion date, the buyer is entitled to:
- ARescind the S&P Agreement and recover all monies paid up to that point
- BPay the SSD on the seller's behalf and claim it as an unsecured debt from the seller after completion
- CDeduct the amount of SSD payable by the seller from the balance purchase price at completion
- DWithhold completion indefinitely until the seller produces documentary proof of full SSD payment to IRAS
Show answer & explanation
Answer
C. Deduct the amount of SSD payable by the seller from the balance purchase price at completion
Explanation
Under the Law Society's Conditions of Sale, if the seller fails to pay SSD by completion, the buyer has the right to deduct the SSD amount from the balance purchase price payable at completion. SSD is primarily the seller's liability (payable on the disposal of the property within the holding period). This provision protects buyers from being inadvertently exposed to the seller's tax default and effectively ensures the SSD is settled at the point of completion from the seller's sale proceeds.
Study the concept behind this question: OTP Singapore: Option to Purchase Fee, Period & Exercise
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