6 BTO, 15 resale flats compulsorily acquired by HDB in last 5 years after owners flout minimum occupation rules

SINGAPORE — Over a period of about five years, enforcement action was taken against 25 property buyers who bought a flat directly from the Housing and Development Board (HDB) and violated the required minimum occupation period needed before they can sell the flat.

Of the 25 cases dealt with by the public housing authority between 2017 and November 2022, six had their flats compulsorily acquired, HDB said in response to TODAY’s queries on Friday (Feb 10).

After a flat has been compulsorily acquired, it will be offered for sale under the HDB’s Sale of Balance Flats exercise.

The numbers were released weeks after HDB said that it will investigate cases of Build-to-Order (BTO) flats that were left vacant during the minimum occupation period and listed for sale after that.

During this mandated period — which ranges from five to 20 years and applies to both BTO flats bought directly from HDB and those bought on the resale market — homeowners are not allowed to sell or lease the whole flat or invest in a private residential property.

HDB last said in December 2022 that it had taken enforcement action for 53 cases between 2017 and November 2022, where homeowners did not fulfil the required occupation period and their flats were sold on the open market.

Of these cases, 21 involved compulsory acquisition by HDB, while the rest were issued financial penalties or warnings.

TODAY then asked for a breakdown of the flat types from HDB.

In its response on Friday, it said that it also handled 28 cases where it had to take enforcement action against buyers who had gotten their flats from the open market and had not lived in the units during the occupation period. 

Of the 28 cases, 15 had their flats compulsorily acquired.

In pricing these acquired units, HDB said that it takes into account the prices of comparable resale flats nearby and the individual attributes of the flats such as their location, storey height, accessibility to amenities and facilities, remaining lease, as well as the prevailing market conditions at the time of sale.

“A significant subsidy is then applied to keep these flats affordable,” it added.

The required minimum occupation period is five years for most HDB flats and 10 years for those under the Prime Location Public Housing model.

It is 20 years for flats bought under the Fresh Start Housing Scheme, which helps families with young children living in public rental flats buy their HDB flat on leases shorter than the usual 99-year lease.

HDB’s earlier statement in December came at a time when segments of the population took issue with some BTO flat owners who were not living in their homes during the stipulated occupation period and flipping the property for a profit later.

This eventually led National Development Minister Desmond Lee to state in December that the authorities would “investigate accordingly” if they discover that a homeowner has breached HDB's rules.

On Friday, HDB stressed that it takes the violation of regulations seriously and “will not hesitate to take enforcement action against errant owners”.

Depending on the severity of the infringement, it may issue a written warning, impose a fine of up to S$50,000 or compulsorily acquire the flat.

However, it said that flat owners who face genuine circumstances and cannot live in their HDB flat during the required occupation period such as in cases of divorce or separation, or the death of the owner, have medical reasons, or were posted overseas for work for a period, should write in to HDB to seek a waiver.

HDB will assess such appeals on a case-by-case basis.