work involving Housing and Development Board (HDB) flats may not form the
bread and butter of many Singapore lawyers. Nevertheless, the HDB flat is an
asset close to the minds and pockets of the Singapore heartland, and solicitors
may need to advise on issues relating to HDB flats from time to time. Lina Chua,
Legal Officer with HDB, explains the differences between the resale and transfer
of HDB flats and what these processes involve.
of HDB Flats
of Singapore citizens reside in HDB flats owned either by themselves or their
families. Most of the leases granted by HDB are for a term of 99 years. HDB also
provides 30-year leases of studio apartments for elderly residents. Owners of
these flats are usually referred to as lessees.
conditions governing the leasehold interest in HDB flats may be found in the
Housing and Development Act (Cap 129) (the H
& D Act), and in the
title and related documents to each flat such as the Agreement for Lease,
Supplemental Agreement, Lease, Variation of Lease and the relevant Memorandum of
Lease and Variation of Memorandum of Lease.
grants loans to its lessees for the purchase of the flats. Where the lease to a
flat has not been issued, the HDB loan will be secured by a Deed of Assignment
and Mortgage-in-escrow. For flats sold by HDB before 1989, there may not be a
Deed of Assignment but the loan terms will be reflected and mortgage terms
incorporated in the Agreement for Lease. Where the lease to the flat has been
issued, the loan will be secured by a Mortgage of the flat. The terms of the
mortgage may be found in these documents, as well as the relevant Memorandum of
Mortgage and Variation of Memorandum of Mortgage.
the 99-year and 30-year leases, HDB also provides rental flats under various
schemes involving short-term and monthly tenancies. The holders of these rental
flats are generally referred to as tenants.
Departments within HDB
purchase of flats from HDB is handled by the Sales Unit. These flats are usually
referred to as direct-purchase
flats or DP
flats. Resale flats
purchased with the CPF Housing Grant and flats sold to existing tenants under
the Sale of Flats to Sitting Tenants Scheme are also classified as direct-purchase
flats as they are deemed to be
subsidised flats. The Sales Unit also processes transfer applications made
before the purchasers take possession (referred to as before
TP stage) of the flat.
lessees have taken possession (referred to as after
TP stage) of the flat, the
lease administration of the flat will be handed over to the relevant Branch
Office. The Branch Office implements policies relating to the lease
administration of the flat, including processing transfer applications.
As its name
suggests, the Resale Section handles the resale of flats.
Department vets the legal documentation relating to HDB flats and acts for
lessees in certain transactions when appointed to do so.
information on HDB policies and procedures, the public may visit the HDB InfoWEB
HDB also runs the following telephone enquiry lines:
Flats: 1800-273 2121
Resale of Flats: 1800-273 1441
between Resale and Transfer
two main categories of conveyancing transactions relating to HDB flats: resale
and transfer. This is an administrative rather than legal distinction, with its
attendant administrative effects. In general, a resale of HDB flat refers to the
open market sale of the flat with consideration, which is processed at the
Resale Section. A transfer of HDB flat refers generally to the assignment of the
flat to immediate family members, blood relatives or ex-spouses without cash
consideration (unless stipulated in a divorce court order), which is processed
at the Sales Unit before TP or at a Branch Office after TP. Notwithstanding the
absence of cash consideration in most transfer cases, the CPF moneys used by the
outgoing transferors must be refunded to their CPF accounts.
Some differences between resale and transfer
|Incoming lessees need not be related to outgoing/remaining lessees||Incoming lessees are usually related to outgoing/remaining lessees|
|Minimum occupation period applicable||Transfer may be effected before expiry of minimum occupation period|
|Cash consideration||No cash consideration unless specified in divorce court order|
|Subject to credit assessment and loan ceiling, loan may cover consideration stipulated in divorce court order (if any).||Loan will not cover consideration stipulated in divorce court order (if any).|
|Processed at Resale Section||Processed at Sales Unit or Branch Office|
drafting of divorce court orders disposing of the matrimonial flat, the relevant
administrative terminology should be used for the avoidance of doubt.
Section 49 of the H & D Act
HDB may, by
its duly authorised officer, act in conveyancing transactions of HDB flats as
specified in section 49 of the H & D Act. The fees chargeable by HDB are
based on the Housing and Development (Conveyancing Fees) Rules (the H
& D (Conveyancing Fees) Rules).
This prescribed scale is at a lower rate as compared with the fees prescribed
under the Legal Profession (Solicitors Remuneration)
Order (the SRO).
The H & D (Conveyancing Fees) Rules only apply to fees chargeable for work
done by HDB. Work done by solicitors in relation to HDB flats is still governed
by the SRO.
Resale Section conducts seminars on resale procedures on a regular basis.
Details of these seminars as well as information on HDB resale policies and
procedures can be found in the HDB InfoWEB. In addition, HDB publishes a Resale
Handbook, which may be purchased at a nominal price from the Reception Counter
at the 1st storey of Tower A, HDB Centre.
sellers of HDB flats should check with the HDB as to whether they are eligible
to sell their flats in the open market before entering into the Sale and
Purchase Agreement (S & P) with the buyers. In general, DP flats must be
occupied for 5 years before the application for resale may be submitted. Flats
purchased from the resale market without a CPF Housing Grant must be occupied
for 2 1 /2 years prior to submission of the resale application. The period of
subletting of the whole flat will not be included in the computation of the
requisite occupation period. Section 49A(1) of the H & D Act prohibits the
sale or agreement for sale of the flat before expiry of the minimum occupation
period. Any contract made in contravention of section 49A(1) is void by virtue
of section 49A(3). A prescribed form for confirmation of eligibility to resell a
flat in the open market (enclosed with the resale application form package) may
be obtained from the Resale Offices
Reception Counter or from any of HDBs
On the sale
of a first DP flat, the lessees must pay a graded resale levy based on the
declared resale price or 90% of the market value of the flat, whichever is
higher. If the resale levy is not paid at the time of resale, and if the lessees
wish to purchase a subsequent flat directly from HDB, they will have to pay the
resale levy with interest at the time of the subsequent purchase.
the sellers duty to ensure
that they are in a position to sell the flat, intended buyers of HDB flats are
advised to confirm that the sellers are the owners of the flat and that the
sellers are eligible to sell the flat. This is especially so where any of the
lessees have passed away or where there are court orders in respect of the flat.
In addition, the buyers should ensure that they are eligible to purchase the
flat. The HDB InfoWEB also contains a programme to assist buyers in their
lease to the flat has not been issued but there is an existing Agreement for
Lease with the lessees/purchasers, a title search on the flat may not show who
the owners are. HDB will only release information regarding the ownership of the
flat with the consent of the lessees.
51(2) of the H & D Act states that the HDB flat will not vest in the
Official Assignee on bankruptcy of the owner. With effect from 20 November 1998,
flats belonging to Singapore permanent residents are not sheltered against
bankruptcy of their owners. A letter of consent from the Official Assignee is
required for the sale of a flat by an undischarged bankrupt. Intended buyers of
5-room and larger flats who are undischarged bankrupts are required to also
produce a letter of consent by the Official Assignee for the purchase.
flat is affected by upgrading, the intended sellers should check whether they
are liable to pay the upgrading levy. The intended buyers should check whether
the upgrading bill has been served. Parties should take the upgrading bill into
account in deciding the resale price. Renovations
the usual duty on lessees to obtain HDBs
prior written consent for renovations to the flat, both the intended sellers and
buyers are advised to check, before entering into the resale transaction, that
all renovations to the flat have been authorised/permitted by HDB.
& P and Application
package contains the Resale Application Form, the standard S & P and
information leaflets. Parties to the resale and their solicitors should read the
contents of the resale package carefully.
standard S & P must be used. There must be no amendments to the standard S
& P and parties must not enter into any other Option, S & P or
Supplemental Agreement. Under sub-sections 49A(2) and (3) of the H & D Act,
any contract, agreement or other document for the sale of a flat not in the
prescribed form is null and void. The deposit paid by the buyer in favour of the
seller on the signing of the S & P must also not exceed $5,000.
section 50 of the H & D Act and the terms of the lease, lessees are required
to obtain HDBs prior written
consent to the sale of their flats. HDB also requires spouses of sellers to
endorse the application form, as the spouse constitutes an integral part of the
buyers wish to obtain a housing loan from HDB or to withdraw their CPF savings
to purchase the resale flat, the application must be supported by a valuation
report or request for valuation. The valuation report is valid for a period of 3
The types of
supporting documents required are set out in the information leaflets in the
resale package. Where court orders in languages other than English are to be
submitted, HDB requires an official translation by a court interpreter.
The Power of
Attorney in relation to HDB flats should be prepared in accordance with the
standard forms circulated via The Law Societys
letters dated 19 March 1998 and 30 November 1998. Where the standard forms are
not applicable or any amendment is required, solicitors should submit the draft
Power of Attorney to HDBs
Legal Department for vetting. As the Power of Attorney submitted pursuant to the
resale may be retained by HDB pending completion of resale or lodgement of the
lease, parties may submit the Power of Attorney certified as a true copy by the
Registrar of the Supreme Court rather than the original Power of Attorney if the
Attorney requires the original Power of Attorney for management or subletting of
the flat in the meantime.
for resale may be submitted through post or through HDB ResaleNet (by agents in
the Listed Housing Agents Scheme). It costs less to submit an application
through ResaleNet and earlier appointment dates may be given.
first appointment, HDB will assess the eligibility of the sellers and buyers.
The Resale Officer will enquire whether the sellers and buyers are represented
by private solicitors or will be appointing HDBs
legal officers to act in the resale. If private solicitors are acting for the
parties in the resale, the parties are to bring a letter from their solicitors
confirming that they are so acting. The Resale Officer will then explain the
resale procedures to the parties.
buyers wish to apply for a HDB loan, they must use all available funds in their
CPF Ordinary Accounts for the purchase before any loan can be granted. The loan
together with the CPF funds must not exceed 100% of the market value of the flat
or 100% of the resale price, whichever is lower. The maximum loan ceiling is the
lower of 80% of the market value of the flat or 80% of the resale price.
assessment will be conducted at the First Appointment and the loan amount to be
granted to the buyers will be determined. The maximum loan period is 65 years
minus the age of the youngest buyer at his last birthday, or 30 years, whichever
is shorter. The maximum monthly loan instalment cannot exceed 40% of the gross
income of the buyers.
application for withdrawal of CPF
savings will be processed at the First Appointment. The buyers are required to
pay 10% of the resale price within 10 days of the First Appointment. The
remaining sum will be paid on completion. Notwithstanding the appointment of
solicitors to act in the resale, the full purchase price, less cash deposit not
exceeding $5,000, must be paid by the buyer to HDB.
effective date of resale will be fixed. The sellers should produce their title
deeds at the First Appointment, if available. If the sellers have an existing
loan with HDB, the title deeds are kept with HDB as security for the loan. The
buyers and sellers would receive the approval letter after the First Appointment
if the resale is approved.
lease to the flat has not been issued, the resale documents consist of:
Mortgage-in-escrow (if HDB loan is granted).
first sold by HDB before 1989 where the loan/mortgage terms are reflected in the
Agreement for Lease, the Deed of Reassignment and Deed of Assignment in respect
of the HDB loans are not applicable. Also, the lease and mortgage are not signed
in escrow by the buyers at the time of the completion of the resale, but only
when the lease plan is ready.
lease to the flat has been issued, the resale documents consist of the Total
Discharge of Mortgage (where sellers have an outstanding HDB loan to be
discharged), Transfer instrument and Mortgage (where an HDB loan has been
Second Appointment, the parties will sign the resale documents if HDB is acting
for the parties and the handover of keys will take place. The buyers will pay
the balance cash amount and the sellers will receive their net sales proceeds.
The sellers CPF moneys will
be refunded to their CPF accounts within 7 days from completion of the resale
that parties are represented by solicitors, the refund of CPF moneys and
repayment of HDB loan will be effected by the Resale Section. If so authorised
by the sellers, HDB will prepare a cheque for the net sales proceeds to be made
in favour of the sellers solicitors.
The solicitors clerks may
attend the completion in place of the parties. For resale of flat pursuant to
matrimonial proceedings, solicitors should take into account the provisions of
the Stamp Duties (Matrimonial Proceedings) Remission Order when stamping the
HDB flats may involve:
reasons for transfer applications include:
Some Differences in Eligibility Criteria
|Flat purchased directly directly from HDB||Flat purchased from open market|
|Citizenship||One of the transferees must be a Singapore Citizens The remaining transferees may be residents.||Transferees may be Citizen or Singapore permanent residents.|
|Income||Assessment of income is required. Total gross family income cannot exceed $8,000.||Total gross family income can exceed $8,000.|
|Ownership of Private Property||A private property owner can take over the ownership of the flat if the flat has been occupied for 5 years or more.||A private property owner can take over the ownership of the flat at any time subject to specified conditions.|
application form for the transfer may be obtained from Sales Unit if the
transfer is made before TP, or any Branch Office if the transfer is made after
TP. The form may also be downloaded from the HDB InfoWEB.
following procedure only applies to transfers of flats after TP.
There are a
few differences in the eligibility criteria for the transfer depending on
whether the flat was purchased directly from HDB or the open market (see table
at the bottom left of this page).
transfer is approved, the Branch Office will send an approval letter to the
transferors and the transferees. The transferors and transferees will then
attend at the relevant Branch Office to confirm the financial plan and sign
various forms in respect of the transfer. The parties may also appoint
solicitors to act in the transfer.
credit assessment and full utilisation of the incoming/ remaining lessees
CPF moneys, transferees may obtain a
fresh loan from HDB for the discharge of the transferors
outstanding loan and the outgoing transferors
CPF refund. The maximum monthly loan instalment cannot exceed 40% of the gross
income of the transferees. The maximum loan period is 65 years minus age of
youngest transferee/occupier included in credit assessment, or 30 years,
whichever is shorter. Credit assessment will not be conducted if the fresh loan
required does not exceed the outstanding loan. The loan ceiling for a DP flat is
80% of the original selling price of the flat. For a flat purchased from the
resale market, the loan ceiling is 80% of the transacted resale price or 80% of
the market valuation at the time of transfer, whichever is lower. For divorce
cases where a cash consideration is stipulated in the court order, the fresh
loan granted by HDB will not cover the cash consideration.
documents to be prepared
documents to be prepared are similar to that of resale cases. The fresh
Agreement for Lease, lease and mortgage documents (where applicable) will be
prepared. Refund of CPF moneys and repayment of HDB loan will be arranged by HDB
regardless of whether the parties are represented by private solicitors.
Solicitors acting for the parties are nevertheless to ensure that the cash
consideration (if any) is paid. When stamping the transfer documents, reference
should be made to the Stamp Duties (Transfer of HDB flats within the Family)
Remission Order and Stamp Duties (Matrimonial Proceedings) Remission Order,
Legal Officer, Housing and Development Board
broad-brush approach has been adopted for this article. Only general
policies/procedures have been set out. HDBs rules, regulations and policies
are subject to change from time to time and solicitors are advised to confirm
the prevailing applicable policies/procedures with the relevant HDB department.
The usual conveyancing precautions/procedures should be applied in accordance
with the circumstances of each case.