HDB investigating 'vacant' BTO listings, may compulsorily acquire them & sell to new owners

Errant property agents and agencies may also be penalised.

Ilyda Chua | December 22, 2022, 08:42 PM

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The Housing Development Board (HDB) is investigating reports of "vacant" Build-to-Order flats, it said in a statement on Dec. 22.

One such case, a 5-room Yishun flat, was reportedly left vacant for eight years as the couple moved into their family's landed property.

Errant owners may have flats compulsorily acquired

Owners of HDB flats are required to physically occupy their units during the five-year Minimum Occupancy Period (MOP).

If the rule requiring owner occupation is violated, HDB may compulsorily acquire the flat, impose financial penalties of up to S$50,000, or issue written warnings, the board said in response to Mothership's queries.

Acquired flats will subsequently be put up for sale as Sale of Balance flats.

Owners whose flats are compulsorily acquired will also be debarred from purchasing subsidised flats, taking over such flats as a result of change in ownership, or renting public rental flats.

During the debarment period, they also cannot be included as listed occupiers in applications for such flats.

For those who failed to meet the requirement of occupying their HDB flat, the debarment period will last five years.

HDB said its flats are meant to meet the needs of Singaporeans, and are intended primarily for owner-occupation — hence rules such as the MOP, during which flat owners are not allowed to sell or rent out the whole flat or invest in a private residential property.

The MOP rule applies to both flats bought from HDB and on the resale market.

HDB aware of property listings of "vacant" BTO flats

"As part of HDB’s resale process, an inspection of the flat will be arranged when owners submit a resale application to HDB," said the statement.

"If there are signs that the flat has not been lived in, HDB will withhold the resale application and commence investigations to ascertain if the flat owners had failed to fulfil the MOP. The investigation will include physical flat inspection, review of other supporting evidence or records indicating flat occupation, and interviews with flat owners as well as property agents, buyers and neighbours, as required."

HDB said it also investigates flats referred to HDB’s panel of valuers, if there are tell-tale signs from the valuation reports of non-occupation of the flat within the MOP.

Referring to cases of “vacant” BTO flats being sold on the open market mentioned in "recent media reports", HDB said it was aware of such property listings, and said some of the listings were already under investigation at the time of reporting.

HDB further said that licensed property agencies are required to ensure that all ads 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)," said HDB, adding that disciplinary action may be taken against errant property agents and agencies.

"Under the CEPCC, property agents must comply with the relevant laws that apply to property transactions, including HDB’s regulations, and should advise their clients not to infringe these laws," said HDB.

21 flats compulsorily acquired since 2017

Between 2017 and November 2022, HDB said it has taken enforcement action in 53 cases where the owners did not occupy their flats during the MOP.

Of these, 21 flats were compulsorily acquired.

The rest were issued financial penalties or warnings.

According to HDB, around 500 inspections are carried out on a monthly basis to detect violations of housing rules.

Mothership understands that both the Yishun flat and a second flat in Sembawang — tagged with the advertising spiels "as good as being a new owner" and "brand new unit"— are currently under investigation by HDB.

Image via Property Guru

Image via Property Guru

Special circumstances

HDB said in certain circumstances, owners who have not fulfilled the MOP may be allowed to sell their flat.

Reasons include financial hardship, divorce, or death of one or more of the owners.

Such exceptions are granted on a case-by-case basis and require special approval from the HDB.

Photos via Property Guru