Can Mum Block Sale Of Jointly Owned Home?

Source : The Sunday Times, October 7, 2007

Q. I MARRIED recently and I am trying to move out of a home that I bought with my mother. The property was purchased for $800,000 and we recently entered into an agreement to sell it for $600,000. The buyer has already exercised his option to purchase.

My mother is having second thoughts and might try to block the sale. She contributed to the initial 20 per cent down payment, while I took a loan and was solely responsible for servicing this loan. I also took care of all the related expenses for the property, such as utilities and maintenance fees.

In terms of ownership, my wife has a 1 per cent share, while my mother and I have a joint tenancy agreement.

1) If my mother refuses to sell, what can I do besides getting a court order? Now that the buyer has exercised the option, what is the next step to completion? Do I still need my mother’s signature?

2) In terms of property division, how is any profit or loss calculated? Which of the following items need to be taken into account?

- My mother’s cash contribution
- My Central Provident Fund (CPF) contribution
- Payment to the bank for the loan
- Renovations to the home
- Stamp duties
- Bank penalties for redemption of the loan

There will be no cash proceeds from the sale. The bank will take the first charge to redeem the outstanding loan. The remainder will be paid back into my CPF account.

3) What is the next thing I should do to ensure that the sale goes through?


A. ONCE the option is exercised by the buyer, the agreement becomes binding on the sellers, who are obliged to proceed with the sale.

There is probably only one other document that needs to be signed before completion can take place: the transfer document in favour of the buyer. All the three sellers - you, your wife and your mother - need to sign this document to effectively transfer ownership of the property to the buyer. If your mother refuses to sign, the right accrues to the buyer to obtain a court order directing her to do so.

The option is an agreement that governs the rights and liabilities between seller and buyer; it is not an agreement between the three sellers vis-a-vis each other. Thus, it is the buyer, not you, who will have the right to get a court order for your mother’s signature.

Your lawyers will help you to ascertain the amount that will have to be paid to the bank and to the CPF Board, and what additional sums will be payable by the sellers on completion, if any.

The sale proceeds will cover only the bank loan and the refund to the CPF Board. Your mother’s cash contribution and any money paid for stamp duties and renovations to the home are ‘monies lost’, and the three of you will have to resolve among yourselves how to settle this loss.

In my opinion, you have no recourse against each other for apportionment of the loss. The three sellers will have to prepare money for the payment of any bank penalties, which will be payable on or before completion.

You might try persuading your mother to proceed with the sale by explaining to her the possible consequences if she chooses to back out.

She needs to understand that the sale is subject to the terms laid out under the Law Society of Singapore Conditions of Sale 1999. One of the conditions of sale provides that if the sellers fail and/or refuse to proceed with the sale, then the buyer can elect to obtain either a court order to force the sellers to complete the sale, or an order against the sellers for an award of damages.

If the buyer elects to claim for damages, the measure of damages payable by the sellers to him will be assessed by the court. This will mainly be the difference between the market value of the property on the date that the buyer elects the remedy of damages and the sale price of $600,000.

It would therefore not be profitable at all for your mother to back out of the sale. In fact, she might get into an unnecessary legal entanglement that could result in losses for and damages against all three of you.

Lie Chin Chin
Managing Director
Characterist LLC (incorporating Lie Kee Pong Partnership)

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