SINGAPORE — The Housing and Development Board (HDB) has said that it is investigating cases of Build-to-Order (BTO) flats being put up for sale after they were left vacant for years.
HDB, in response to media queries on the recent stories about property listings of “vacant” BTO flats, said on Thursday (22 Dec) that some of the cases, including those reported by media have already been under investigation at the time of media’s reporting.
According to the Housing and Development Board (HDB) website, flat buyers have to physically occupy their flats during the Minimum Occupancy Period (MOP), which is five years for BTO flats.
During the MOP, owners are not allowed to sell or rent out the whole flat or buy a private home. This applies to flats bought from HDB or on the resale market.
However, a 5-room BTO flat at Block 505A Yishun Street 51 was reported to have its whole unit remain in its original condition for eight years before being listed at S$690,000 on the Property Guru website for sale.
The local media also reported other similar flats listed on the property website.
Mr Desmond Lee, Minister of National Development wrote in a Facebook post on Monday (19 Dec), stressing that a BTO flat must be owner-occupied for the full MOP period.
“I was asked whether a family can buy an HDB BTO flat, not live in it or move into it for 5 years, and then sell it as “almost brand new” on the resale market.”
“The answer is no, “he wrote. He explained that If the owners are unable to fulfil the MOP, then the flat needs to be returned to HDB. HDB will then put up as a balance flat for other home buyers to apply for.
HDB said it has taken enforcement action in 53 cases where flat owners did not occupy their units during the MOP between 2017 and November this year. Of these, 21 cases involved HDB taking back the flats, with the rest being issued fines or warnings.
It said it carries out about 500 inspections per month to detect violations of housing rules, such as illegal flat rentals.
Should it receive feedback on suspected cases of violations, such as flats being listed for sale without being occupied by their owners, investigations will be carried out.
If investigations show that the flat was not owner-occupied during the MOP, HDB may “compulsorily acquire” the flat, impose a financial penalty of up to S$50,000 or issue written warnings.
Flats that are compulsorily acquired by HDB under these circumstances will also be put up as sale of balance flats.
Under the Housing and Development Act, owners whose flats are compulsorily acquired by HDB will be debarred from buying a subsidised flat.
They will also not be allowed to take over a flat by changing the flat’s ownership and they cannot rent a public rental flat from HDB.
These individuals also cannot be included as occupiers in the application of such flats.
Any application in the HDB queue for a subsidised flat made prior to the debarment will also be cancelled. For failure to occupy an HDB flat, the debarment period is five years.
As part of the resale process, a flat inspection will be arranged when the owners submit a resale application to HDB.
If there are signs that the flat has not been lived in, HDB will withhold the resale application and start investigations to check if the flat owners had failed to fulfil the MOP.
The investigation will include a physical inspection of the flat, a review of other supporting evidence or records indicating flat occupation, and interviews with owners as well as property agents, buyers and neighbours, as required.
It will also investigate if there are “tell-tale signs” from the valuation reports of non-occupation of the flat within the MOP when referred to HDB’s panel of valuers.
HDB said it may grant approval for households whose flats have not met the MOP to sell their unit, on a case-by-case basis.
It will take into account the circumstances of the flat owners and their families, and the reasons for such exceptions include financial hardship, divorce, or the demise of the owner or owners.
HDB notes that licensed property agencies are required to ensure that all advertisements put up by their agents are accurate and truthful.
“Publishing false or misleading advertisements is a breach of the Council for Estate Agencies’ (CEA) Code of Ethics and Professional Client Care (CEPCC), and disciplinary action can be taken against errant property agencies and agents,” said HDB.
Property agents are also responsible to ensure that the sales of HDB flats are proper and legitimate, said HDB.
Under the CEPCC, housing agents must comply with the laws that apply to property transactions, including HDB’s regulations and to advise their clients not to infringe these laws.