Can Flat Buyer Force Us To Sell After We Quit Deal?

Source : The Straits Times, Sunday, 19 Aug 2007

Q. MY BROTHER and mother jointly sold their four-room Housing Board (HDB) flat. But my brother, who has a low IQ, backed out and refused to proceed with the HDB sale procedure on the first appointment. The HDB then postponed the appointment date by a month.

But my brother is still refusing to sell the flat. The buyer has engaged a lawyer and a summons has been issued to my brother, with a copy sent to me.

Could you please advise me on the following:

a) What are the consequences if we do not sell the flat?

b) Can a lawyer be engaged to protect my brother’s interests?

c) Can the buyer ‘force sell’ the flat?

Here is a brief history of my brother. He was admitted to Singapore General Hospital for depression in January this year after he was cheated of all his POSB savings by a close colleague last year. He has not worked since then. My mother has no savings.

A I ASSUME that your mother and brother (’the sellers’) had granted an Option to Purchase to the buyer who has duly exercised the Option. Once the Option is exercised by the buyer, it becomes an agreement that is binding on both the sellers and the buyer. Your brother will not be able to back out of the terms of the Option on the account of his low IQ unless the following factors can be shown:

Your brother was of unsound mind at the time of signing the Option to Purchase, to such an extent that he was incapable of understanding what he was doing when he signed the Option; and

The buyer knew or ought reasonably to have known of his disability.

If these two factors can be proved, then your brother may avoid the agreement. Otherwise, the sellers are legally obliged to proceed with the sale according to the terms of the Option.

The Option would contain a term that subjects the sale to the conditions of the Law Society Conditions of Sale 1999.

One of the conditions provides that if the sellers fail and/or refuse to proceed with the sale, then the buyer can elect either to obtain a court order to force the sellers to complete the sale or to obtain an order against the sellers for an award of damages in favour of the buyer.

If the buyer elects to claim damages, the measure of damages payable by the sellers to him will be assessed by the court. This will comprise mainly the difference between the market value of the flat and the sale price as agreed in the Option, usually calculated at the date when the buyer elects to seek the remedy of damages.
Hence, the sellers are well advised to attend the appointment at HDB. They should immediately inform the buyer of their intention to do so. This will render the writ of summons issued by the buyer premature and redundant. The sellers should certainly engage a lawyer to protect their interests.

In view of their lack of income and savings, they may wish to apply for legal aid at the Legal Aid Bureau at 45 Maxwell Road, #08-12, The URA Centre, East Wing, Singapore 069118. If they qualify for legal aid, the Legal Aid Bureau will assign lawyers to represent them. You may wish to visit their website at http://app.minlaw.gov.sg/lab

Lie Chin ChinManaging DirectorCharacterist LLC(incorporating Lie Kee Pong Partnership)

Advice provided in this column is not meant as a substitute for comprehensive professional advice.