mr funny
10-07-11, 06:17
http://www.straitstimes.com/Singapore/Story/STIStory_688291.html
Jul 8, 2011
$2.85M deal cancelled
Land subject to road redevelopment, court orders deposit refund
By K.C. Vijayan, Law Correspondent
http://www.straitstimes.com/STI/STIMEDIA/image/20110707/ST_IMAGES_VIPHANG08-TLZ.jpg
The road reserve means that some 40 per cent of the land, on which the corner shophouse in Sims Avenue stands, will eventually have to be surrendered to the authorities. -- ST PHOTO: RAJ NADARAJAN
THE buyer of a $2.85 million shophouse in Sims Avenue was allowed to cancel the deal and get his deposit back after it emerged that part of the land was subject to road development.
In a judgment released yesterday, the High Court ruled that businessman Soo Nam Thoong was justified in pulling out as the clauses in the contract did not provide for road works.
The case upheld the concept of 'buyer's bargain' where a purchaser is entitled to get what he bargained for, and if it turns out to be substantially different, he is entitled to abort the transaction.
Industry players said the case was also a wake-up call to ensure that the clauses in conveyancing documents were adequately drafted.
'The devil is in the details. This case illustrates the danger of using standard option-to-purchase documents without careful attention to the additional details needed to provide for specific outcomes,' said lawyer Amolat Singh.
'Some may see a good buy at first sight, but subsequently could use the clauses to pull out when they realise its value is limited by the restrictions.'
He pointed out that the Law Society's Conditions of Sale also provided a reference point which can affect how the clauses in the sale documents are interpreted.
Lawyer Mark Goh noted that part of the problem was that most of the option- to-purchase documents are handled by estate agents who use a standard template. 'It is only after the sale is clinched and the document signed that the lawyer comes into the picture and follows up to complete the deal,' he added.
This entails checking with agencies, such as the sewerage, environmental health or public works, for any conditions imposed on the property that may impede its sale or render it unsatisfactory.
But he pointed out the relevant authorities' right to the conditions did not necessarily mean it would be invoked any time soon.
Conveyancing lawyer Evelyn Phang said: 'I have come across clauses in dispute and in this case, the court is giving examples that it is not prepared to accept clauses that are interpreted too widely.'
Mr Soo, in his 50s, had paid $285,000 in April for the 217.5 sq m two-storey shophouse in Geylang to settle the
option-to-purchase fee and additional deposit to make up 10 per cent of the purchase price.
The sale was subject to getting satisfactory results from the relevant agencies, including the Land Transport Authority, on any conditions imposed on the property.
He found out through LTA that part of the land was to be set aside for redevelopment or road construction or improvement, whichever was earlier.
His lawyer, Mr Tan Lam Siong argued that this LTA condition was unsatisfactory for the sale to go through.
The road reserve takes up some 40 per cent of the land which will have to be surrendered to LTA, and the existing building will have to be reconstructed, if and when the road works are done.
He added that this would 'substantially diminish the property's value'.
He pointed out that there was a right to cancel the sale which the contract clause allowed for, as the LTA's reply was not satisfactory.
But seller Phang Song Hua's lawyer Aqbal Singh countered that a further clause in the same document had provided that any road or drainage schemes affecting the property shall be deemed as satisfactory for the sale to go through.
Justice Chan Seng Onn held that Mr Singh's interpretation was 'draconian' and said if any road or drainage scheme was to be taken as satisfactory for the purposes of the sale even if it affected 99 per cent of the land, then it should have been spelt out clearly in the document.
He said that to interpret the clause in such a manner would give it a very wide scope which did not put a limit on what would be acceptable or satisfactory.
Justice Chan, in his judgment grounds, held that the buyer's interpretation of the contract clause in dispute was to be preferred.
[email protected]
Jul 8, 2011
$2.85M deal cancelled
Land subject to road redevelopment, court orders deposit refund
By K.C. Vijayan, Law Correspondent
http://www.straitstimes.com/STI/STIMEDIA/image/20110707/ST_IMAGES_VIPHANG08-TLZ.jpg
The road reserve means that some 40 per cent of the land, on which the corner shophouse in Sims Avenue stands, will eventually have to be surrendered to the authorities. -- ST PHOTO: RAJ NADARAJAN
THE buyer of a $2.85 million shophouse in Sims Avenue was allowed to cancel the deal and get his deposit back after it emerged that part of the land was subject to road development.
In a judgment released yesterday, the High Court ruled that businessman Soo Nam Thoong was justified in pulling out as the clauses in the contract did not provide for road works.
The case upheld the concept of 'buyer's bargain' where a purchaser is entitled to get what he bargained for, and if it turns out to be substantially different, he is entitled to abort the transaction.
Industry players said the case was also a wake-up call to ensure that the clauses in conveyancing documents were adequately drafted.
'The devil is in the details. This case illustrates the danger of using standard option-to-purchase documents without careful attention to the additional details needed to provide for specific outcomes,' said lawyer Amolat Singh.
'Some may see a good buy at first sight, but subsequently could use the clauses to pull out when they realise its value is limited by the restrictions.'
He pointed out that the Law Society's Conditions of Sale also provided a reference point which can affect how the clauses in the sale documents are interpreted.
Lawyer Mark Goh noted that part of the problem was that most of the option- to-purchase documents are handled by estate agents who use a standard template. 'It is only after the sale is clinched and the document signed that the lawyer comes into the picture and follows up to complete the deal,' he added.
This entails checking with agencies, such as the sewerage, environmental health or public works, for any conditions imposed on the property that may impede its sale or render it unsatisfactory.
But he pointed out the relevant authorities' right to the conditions did not necessarily mean it would be invoked any time soon.
Conveyancing lawyer Evelyn Phang said: 'I have come across clauses in dispute and in this case, the court is giving examples that it is not prepared to accept clauses that are interpreted too widely.'
Mr Soo, in his 50s, had paid $285,000 in April for the 217.5 sq m two-storey shophouse in Geylang to settle the
option-to-purchase fee and additional deposit to make up 10 per cent of the purchase price.
The sale was subject to getting satisfactory results from the relevant agencies, including the Land Transport Authority, on any conditions imposed on the property.
He found out through LTA that part of the land was to be set aside for redevelopment or road construction or improvement, whichever was earlier.
His lawyer, Mr Tan Lam Siong argued that this LTA condition was unsatisfactory for the sale to go through.
The road reserve takes up some 40 per cent of the land which will have to be surrendered to LTA, and the existing building will have to be reconstructed, if and when the road works are done.
He added that this would 'substantially diminish the property's value'.
He pointed out that there was a right to cancel the sale which the contract clause allowed for, as the LTA's reply was not satisfactory.
But seller Phang Song Hua's lawyer Aqbal Singh countered that a further clause in the same document had provided that any road or drainage schemes affecting the property shall be deemed as satisfactory for the sale to go through.
Justice Chan Seng Onn held that Mr Singh's interpretation was 'draconian' and said if any road or drainage scheme was to be taken as satisfactory for the purposes of the sale even if it affected 99 per cent of the land, then it should have been spelt out clearly in the document.
He said that to interpret the clause in such a manner would give it a very wide scope which did not put a limit on what would be acceptable or satisfactory.
Justice Chan, in his judgment grounds, held that the buyer's interpretation of the contract clause in dispute was to be preferred.
[email protected]