Option to Purchase
You and the buyers must use the HDB-prescribed Option to Purchase (OTP) as the form of contract in the transaction. Any other agreements and supplementary agreements relating to the sale or purchase of the flat are not valid under the Housing and Development Act.
You can download a copy of the HDB-prescribed OTP form. Please print only 1 copy of the OTP as each form has a unique serial number. You must state the serial number of the OTP when you submit a resale application to HDB.
Steps to enter into a contract using the OTP
Do read these documents before entering into a contract:
Step 1: Negotiate and agree on the resale price
You and the buyers have to negotiate on the resale price of the flat and decide on the price willingly.
You can make use of the Resale Flat Prices e-Service to check the resale transacted prices for the past 2 years to assist you in making an informed decision. All resale transacted prices are updated daily based on HDB’s registration of the resale applications received.
When entering the OTP:
- You and the buyers must declare the true resale price of the flat to HDB
- Salespersons must also declare all relevant information relating to the resale transaction in the Salesperson Statutory Declaration.
The penalty for false declaration includes a fine and/ or up to 3 years' imprisonment.
You and the buyers must not enter into any of the following:
- Supplementary/ other agreements
- Arrangements that may cause the true resale price as declared to be inflated or understated
The penalty for false information includes a fine of up to $5,000 and/ or up to 6 months’ imprisonment.
Step 2: You grant the OTP to the buyers
If you decide to sell your flat, you may grant an Option to the buyers, to sell the resale flat at the agreed resale price.
You or the buyers must fill in these sections in the OTP:
- Option Date
- Flat address
- Purchase price (resale price of the flat)
- Option Fee (between $1 to $1,000)
- Option Expiry Date (21 calendar days from the Option Date [including Saturday, Sunday and public holidays]. E.g. If seller grants Option to you on 1 Apr, the Option will expire on 22 April at 4pm)
- Names and NRIC numbers of all the sellers and buyers
Top half of page 8
- Option Date
- Flat address
- You and all the co-owners of your flat must sign on the OTP
- A witness must sign on the OTP (your salesperson or any person who is a Singapore Citizen or Singapore Permanent Resident aged 21 years or above and not involved in the resale transaction)
You are required to sign on the OTP in exchange for an Option Fee from the buyers. The Option Fee should be a sum between $1 to a maximum of $1,000, to be negotiated between you and the buyers.
Once you have granted the Option to the buyers, you cannot grant an Option to another buyer until it expires.
- Only flat buyers or their salespersons can submit a request for valuation. The request can only be submitted after the sellers have granted the buyers an OTP
- More details in the Press Release dated 10 March 2014
Step 3a: Buyers exercise the OTP if they wish to proceed with the purchase
The Option period is 21 calendar days (including Saturday, Sunday and public holidays) from the date of granting the OTP (refer to Step 2). It expires at 4pm on the 21st calendar day.
If the flat buyers wish to purchase the flat, they have to exercise the Option within the Option Period. To exercise the Option, you or the buyers must fill in:
- Clause 6.1 (c) on page 2 of the OTP: Option Exercise Fee
- Clause 12 on page 4 of the OTP: Number of days from the date of exercising the Option that you and the buyers have agreed to submit the resale application to HDB
- Bottom half of page 8 of the OTP: All buyers must sign on the "ACCEPTANCE" section in the OTP. A witness must sign on the OTP (their salesperson or any person who is a Singapore Citizen or Singapore Permanent Resident aged 21 years or above and not involved in the resale transaction)
When the buyers exercise the OTP, the buyers will need to pay a deposit to you. The deposit, including the Option Fee previously paid in Step 2, must not exceed $5,000 in total. The amount of deposit is negotiated between you and the buyers.
Step 3b: Let the OTP expire if the buyers do not wish to proceed with the purchase
If the buyers do not wish to proceed with the purchase, that is, exercise the OTP, you need not do anything but wait for the Option Expiry Date to lapse. The buyers will forfeit the Option Fee previously paid in Step 2; you may keep the Option Fee.
Step 4: Decide when to submit the resale application
You and the buyers (or their salesperson) have to submit the respective portions of the resale application separately. A resale application is deemed complete only when the HDB receives both portions of the resale application. You and the buyers should ensure that all the prevailing eligibility conditions and resale requirements are met, on the date the second party submits his portion of the resale application.
More on submission of resale application.