21 flats compulsorily acquired by HDB from owners not occupying them: Desmond Lee

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During the Jan. 9 sitting of Parliament, Minister for National Development Desmond Lee spoke on the question of HDB owners who did not properly occupy their HDB flats, and the measures being taken to combat it.

HDB has taken action against 53 owners for not occupying their flats, with 21 of them having had their units compulsorily reacquired between 2017 and 2022, said Lee.

Lee said that the Council for Estate Agencies (CEA) had also taken disciplinary action against 18 agents who had breached CEA’s regulations. They were among the 51 cases involving 69 property agents that was investigated.

Minimum requirements of occupancy

Lee started by stating that owners of HDB flats were required to physically occupy their flats during the Minimum Occupancy Period (MOP), usually a five year period.

During the MOP, they were not allowed to sell their flats on the open market. Nor were they allowed to rent out the whole flat without occupying it.

This was to ensure that HDB flats would be reserved for households with genuine housing needs.

However, Lee said that HDB also recognised that the housing needs of flat owners changed over time.

Some owners were looking to change properties as their familial, financial, or medical statuses had changed.

Lee then explained the current MOP tried to strike a balance between the objective of owner occupation and allowing those whose circumstances have changed to make appropriate adjustments.

Those unable to fulfil MOP requirements were able to appeal to HDB, who assessed them on a case by case basis.

Lee also said that the MOP period could be modified to better fulfil the owner occupancy objective.

He gave the examples of the Prime Location Housing Model and the Fresh Start housing grant, which have 10 and 20 year MOPs respectively.

Lee said that many suggestions have been submitted by members of the public as part of the Forward Singapore dialogue.

Suggestions have ranged from keeping MOPs as they are, to allowing some level of trade off between MOP time and flat cost.

Lee said that MND was studying the many views carefully, and would continue to review Singapore’s housing policies.

Compulsory acquisition taken against errant owners

Lee said that between 2017 and 2022, 258 BTO flats and 168 Resale flats had been returned to HDB, mostly due to changes in owner circumstances, such as divorce or death.

He then went on to address concerns about “errant owners”, or owners who attempted to sell or rent their flats without having physically occupied their flats for the whole MOP.

HDB detected such errant owners through regular inspections, feedback from the public and property agents, as well as other tools such as data analytics.

Lee said that in detecting and investigating rule infringements, there was a trade off between detection and the privacy of over 1.1 million homeowners, the vast majority of which abided by the rules.

HDB conducts 500 inspections a month, and has inspected 35,000 homes since 2017.

HDB also investigated feedback from the public and property agents, such as when flats are listed for resale in bare or “brand new condition”; receiving 4,700 pieces of feedback between 2017 and 2022.

This was in addition to HDB inspecting all flats involved in resale transactions. Flats in suspicious conditions would be flagged.

Lee said that there was no flat type with a greater propensity for violations.

Those in breach of MOP rules might be issued a written warning, fined up to $50,000, or HDB might compulsorily acquire their flat.

Between 2017 and 2022, HDB has taken action against 53 owners for not occupying their flats, with 21 of them having their flats reacquired.

Those whose flats are compulsorily acquired for MOP infringement will also face being debarred from future flat purchases or taking over subsidised flats, among other consequences.

Disciplinary action against property agents

There were also consequences for estate agents who assisted errant owners.

Lee said that property agents who performed estate agency work had a role to play in reporting rule infringement.

Citing the Estate Agents Act, as well as its included regulations such as its Code of Ethics, Lee said that agents needed to perform due diligence and ensure that laws were not being infringed.

If the agent had reasonable cause to suspect MOP rules had been infringed, agents were expected to stop marketing the client’s property and warn said client of potential consequences.

Lee said the Council for Estate Agencies (CEA) had taken disciplinary action against agents who had breached CEA’s regulations.

Between 2017 and 2022, CEA had investigated 51 cases involving 69 property agents for helping clients market HDB flats that might have infringed MOP rules.

19 out of 51 cases were still under investigation. Of the remaining 32, disciplinary action was taken against 18 agents.

Six agents had their registration suspended between seven and 48 weeks, and were fined between $2,000 and $5,000 by the CEA’s disciplinary committee.

Two were issued letters of censure, with one of the agents being fined $1,000.

The remaining 10 were issued warning letters.

Lee said his ministry recognised the concern and anger sometimes shown by members of the public when confronted with rule breaking, acknowledging their worry about whether the playing field is fair, especially  when they comply with the rules.

Closing his speech, Lee said that members of the public could report cases via email or calling a toll-free hotline at  1800-5556370.

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Top image via MCI Singapore/YouTube