Are there any penalties for aborting a transaction?

In Singapore, buyers who abort a property transaction after having entered into a Sale and Purchase Agreement (SPA) with the developer are subject to significant penalties. If a buyer fails to complete the purchase—for example, by not paying the required instalments on time—the developer can issue a written notice of at least 21 days. If the buyer does not remedy the default within this period, the SPA can be annulled, and the developer is entitled to forfeit up to 20% of the purchase price from the instalments already paid. The developer is not allowed to claim more than this, even if their actual losses from reselling the unit are greater. Additionally, the developer may recover other amounts owed, such as interest, property tax, maintenance charges, and costs incurred due to the buyer’s default.

This applies specifically to private residential property transactions under standard SPA terms. The consequences for public housing (HDB flats) are different and depend on the stage of the transaction and specific HDB rules, which are not covered here. Always refer to the specific terms of your agreement and consider seeking legal advice, as each case may have unique circumstances.