URA issues circular on pre-approved amendments to OTP to comply with anti-money laundering and terrorism financing requirements

28 July 2023

The Urban Development Authority (“URA”) has issued a circular on pre-approved amendments to the option to purchase (“OTP”) to comply with anti-money laundering and terrorism financing requirements (“Circular”). The Circular took effect on 28 June 2023.

Developers are required to use the standard OTP under the Housing Developers Rules and Sale of Commercial Properties Rules for the sale of uncompleted properties. The approval of the Controller of Housing (“Controller”) is required for any amendments to the standard OTP.

Under the Housing Developers (Anti-Money Laundering and Terrorism Financing) Rules 2023 (“HD(AMLTF) Rules”) and Sale of Commercial Properties (Anti-Money Laundering and Terrorism Financing) Rules 2023 (“SCP(AMLTF) Rules”), developers are required to perform customer due diligence (“CDD”) measures in under certain circumstances, including before granting an OTP.

A developer may choose not to perform or complete performing any of the CDD measures it is required to perform in relation to a purchaser if the developer has reason to (a) suspect that the transaction with or intended with the purchaser involves money laundering or terrorism financing, and (b) believe that performing the measure will tip off the purchaser or any other person associated with the purchaser.

In such situations, rule 4(3) of the HD(AMLTF) Rules and SCP(AMLTF) Rules provide that the developer must not:

  • grant to the purchaser an OTP for a housing unit or a commercial property; or
  • accept any sum of money (including any booking fee) from the purchaser in relation to the intended purchase of any such housing unit or commercial property; or
  • enter into a sale and purchase agreement with the purchaser for the housing unit or commercial property.

To facilitate developers in complying with rule 4(3) of the HD(AMLTF) Rules and SCP(AMLTF) Rules, the Controller has pre-approved amendments to the standard OTP as set out in Annex A to the Circular. Developers may adopt the pre-approved amendments for all OTPs to be issued without having to seek further approval from the Controller.

For OTPs that have been issued, the OTP may also be amended to incorporate the pre-approved amendments if both developers and purchasers agree, e.g. by way of a side letter or supplemental agreement. If the side letter or supplemental agreement is solely to effect the pre-approved amendments, without any other changes, written approval of the Controller for the side letter or supplemental agreement is not required.

Reference materials

The following materials are available on the URA website www.ura.gov.sg: