MOP breaches: 53 cases taken to task in last 5 years, HDB probing ‘vacant’ BTO flat sales on open market

SINGAPORE — The Housing and Development Board (HDB) said that it has dealt with 53 violations of minimum occupation period (MOP) rules since 2017. It added that it was already probing some cases of "vacant" Build-to-Order (BTO) flats being sold on the open market when they were reported in the media recently.

In response to queries from TODAY, HDB said on Thursday (Dec 22) that the 53 cases between 2017 and November this year resulted in in it taking enforcement action against homeowners for not occupying their flats during the required occupation period.

Of these cases, 21 involved compulsory acquisition — that is, the flats were seized by HDB — while the rest were given financial penalties or warnings.

The housing agency did not provide a breakdown of the flat types for the 53 cases or the nature of the offences, and TODAY has sought clarifications from it.

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

In a Facebook post on Monday, National Development Minister Desmond Lee said that the authorities would “investigate accordingly” if they discover that a homeowner has breached HDB's rules.

During the minimum occupation period — which applies to both BTO flats 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.

The required timeframe is five years for most HDB flats, with the exception of Prime Location Public Housing flats that have a 10-year minimum occupation period.

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

In his post, Mr Lee said that he was asked whether a family can buy a BTO flat, not live in it or move into it for five years, and then sell it as “almost brand new” on the resale market.

The answer, Mr Lee said, is no.

In response to the same post, a Facebook user then flagged to Mr Lee several flat listings on property search portals that had met the minimum period but were “totally blank canvas or obviously not occupied”.

In recent times, prospective buyers have been lamenting on how hard it can be when securing an HDB flat for themselves given the high demand.

In its statement on Thursday, HDB said it is aware that there are property listings of “vacant” BTO flats being sold on the open market.

“This includes the cases mentioned in recent media reports, some of which have already been under investigation at the time of media’s reporting,” it added.

Government-built flats are meant to meet the housing needs of Singaporeans and are primarily intended for owner-occupation, HDB said.

That is why the housing authority carries out, on a monthly basis, about 500 inspections to detect violations of housing rules such as illegal flat rentals.

It also said that if it receives feedback on suspected cases of violations, including flats being listed for sale without being occupied by owners, “thorough investigations will be carried out and HDB will not hesitate to carry out enforcement actions for any violations”.

Furthermore, as part of HDB’s resale process, an inspection of the flat will be arranged when owners submit a resale application.

“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 minimum occupation period,” it added.

HDB said that the investigation will include:

• A physical flat inspection
• A review of other supporting evidence or records indicating flat occupation
• Interviews with flat owners as well as property agents, buyers and neighbours, as required

For flats that are referred to its panel of valuers, HDB will also investigate if there are tell-tale signs from the valuation reports of non-occupation of the flat within the minimum occupation period.

However, on a case-by-case basis, HDB may grant approval for households where the flats have not met the required occupation period but they want to sell the flats, by taking into account the specific circumstances of the flat owners and their families.

“The reasons for such exceptions include financial hardship, divorce, or the demise of the owner or owners.”

HDB added that it takes the violation of occupation rules seriously, and if investigations conclude that a flat was not owner-occupied during the required period, it 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 be put up for sale via the sale of balance flats exercise.

Under the Housing & Development Act, owners whose flats are compulsorily acquired by HDB will be debarred for a period of five years from buying a subsidised flat, taking over a flat by way of change in ownership, or renting a public rental flat from HDB.

Additionally, they cannot be included as listed occupiers in the application for such flats.

Any application in the HDB queue for a subsidised flat made before the debarment will also be cancelled.

As for property agents that publish “false or misleading advertisements”, HDB said that they are breaching the Council for Estate Agencies’ Code of Ethics and Professional Client Care, and disciplinary action can be taken against errant property agencies and agents.