The simple answer is that of course you can. . . But you must bear the legal consequences of breaching the contract. As we know the Sale and Purchase Agreement is actually an effective legal document that regulates and govern the duties of both parties. If either party does not want to carry on with the contract because of his own will or negligence, he must terminate the contract in accordance with the terms in the contract.
The Sale and Purchase Agreement does not equal to a title deed transfer document.
Many friends will mistakenly believe that after signing the Sale and Purchase Agreement, the transfer of property ownership procedure is complete. The answer is definitely not. The Sale and Purchase Agreement is only a legal document between the buyer and the seller that privately binds both parties. The Sale and Purchase Agreement will regulate and clearly state the purchase price, the amount of deposit, the sale price, and when will the keys be handed over. Strictly speaking, the transfer of property ownership can be completed without the need of a sale and purchase agreement. When we want to transfer the name of title of the property to the buyer, the most important document is actually Memorandum of Transfer (MOT).
If you breach the contract, you need to compensate the other party.
Having said that, if one day after signing the Sale and Purchase Agreement, you find that you don’t want to buy the house for some reasons, for example, you are going back hometown or being fired by your boss and losing your source of income; what should be done? As mentioned above, unless you meet a kind hearted seller and the seller is willing to unconditionally return your deposit. Otherwise, you have entered into a legally binding contract with the seller, and you will have to bear the consequences if you go against and terminate the agreement. Generally, the Sale and Purchase Agreement will indicate that if either party breach the agreement, one must compensate the other party with 10% of the purchase price, which means that your deposit will be forfeited by the seller.
You might say that the seller is very profitable and is able to forfeit 10% of the purchase price. In fact, you should read clearly before entering the Sale and Purchase Agreement, that both parties must work hard to fulfill their responsibilities. After signing the contract, the seller cannot sell to a third party within a period of time, even if he meets a third party who is willing to pay him a higher price. Moreover, if the seller breaches the agreement, the buyer is also entitled to recover 10% of the sale price from the seller. Therefore, before entering into the Sale and Purchase Agreement, please consider carefully before signing it!
BY WINSON TAN
Note: This article is for reference only and does not constitute legal advice. Therefore, if readers have any legal questions or needs, they should seek professional legal advice. If the reader suffers any loss by relying on this article, the author will not be held responsible.