Some 4,700 potential violations reported, 69 agents investigated on ‘vacant’ BTO flat sales

THE Housing & Development Board (HDB) received about 4,700 pieces of feedback on potential violations of Minimum Occupation Period (MOP) rules between 2017 and 2022, said Minister for National Development Desmond Lee in Parliament on Monday (Jan 9). 

In that same period, Lee noted that the Council for Estate Agencies (CEA) investigated 51 cases involving 69 property agents for helping their clients to market HDB flats that may not have met MOP rules. 

Among the 51 cases, investigations into 32 cases have been completed, with disciplinary action taken against 18 property agents for breaching the statutory board’s code of ethics and professional client care.

“The number of complaints against agents who are suspected of having assisted in breach of such rules, including MOP rules, has increased over the last two years, from about three per year to about 20 per year. So we’re concerned,” Lee said.

“We’re concerned about this and will continue to have HDB and CEA work closely together to ensure that the understanding of the foundation of a lot of these rules relating to property and real estate is underscored by our sector,” he added. 

Under the HDB’s code, property agents are required to perform due diligence when carrying out estate agency work to ensure that no law, including those that apply to HDB flats, has been infringed. 

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So far, six property agents had their registrations suspended for seven to 48 weeks, on top of a fine ranging from S$2,000 to S$5,000. Two were given a letter of censure, with one also receiving a S$1,000 fine. The remaining 10 were issued warning letters.      

Lee shared these figures in response to questions from several members of Parliament on how the government ensures that HDB’s MOP policy is kept, especially for the resale of Build-To-Order (BTO) flats. 

Reports surfaced in late-December of unrenovated, vacant BTO flats being put up for sale on property portals.  

In a Facebook post then, Lee highlighted that owners are required to live in the BTO flat for the full MOP. If the owners cannot fulfil the MOP, the flat must be returned to HDB. 

He added that a family cannot purchase a BTO flat, keep it vacant for five years, then sell it as “almost brand new” on the open market. The MOP is five years for most HDB flats, except for homes under the Prime Location Public Housing model that have a 10-year MOP. 

Property agencies such as ERA Realty stressed that such cases are a “super-minority”. 

ERA’s key executive officer Eugene Lim said that beyond disseminating information from HDB and CEA to its network of agents, the agency also maintains a help desk for its property agents to clarify any operational or compliance concerns. 

When pressed on how the government will enforce against “errant owners” who violate MOP rules, Lee said HDB detects any potential infringement through a variety of methods, including regular inspections of HDB flats, public feedback, as well as the use of data analytics and other tools. 

Every month, HDB conducts random checks on 500 homes for any potential infringements, such as unauthorised rentals and non-occupation of flats. Since 2017, HDB has conducted random checks of around 35,000 homes. 

As part of the resale process, Lee said HDB also conducts inspections on flats involved in resale transactions, with those listed in bare or “brand new” conditions being flagged up for further checks. 

Depending on the severity of the infringements, owners may receive a written warning, fine of up to S$50,000, or have their flats compulsorily acquired by HDB. Owners whose flats are compulsorily acquired by HDB will also be barred from purchasing subsidised flats or taking over such units through a change in ownership, among other consequences. 

“We recognise that people have got a whole range of life circumstances,” said Lee. For instance, a total of 258 BTO flats and 168 resale flats have been returned to HDB between 2017 and 2022 – mainly due to changes in circumstances during the MOP, such as divorce or separation, demise of the owner, or medical reasons. 

“For these cases where we take firm action, it is quite clear from the evidence, from the interviews (and) the investigation that they either had no intention to live in those homes or felt that they could get away with it,” said Lee. 

But when it comes to detecting and investigating infringements, the minister emphasised that HDB tries to “strike a balance”. 

“On the one hand, we want to ensure that HDB rules are complied with,” he said. “On the other hand, we do not want to overly impinge upon the privacy of the 1.1 million HDB homeowners, the vast majority of whom abide by the rules.”

Separately, Senior Minister of State for National Development Sim Ann highlighted that residents affected by the Selective En bloc Redevelopment Scheme (Sers) in Ang Mo Kio were not compelled to pay for large top-ups for equivalent replacement flats, nor had HDB priced flats “unfairly or unreasonably”.

This was in response to questions raised by Progress Singapore Party Non-Constituency Member of Parliament Leong Mun Wai on how flats are valued under Sers. 

Sim added that HDB has offered affected residents the option to apply for a BTO flat at Central Weave @ AMK with priority allocation. Those aged 45 and up at the point of the Sers announcement also have the option to purchase a new flat at a designated replacement site with a 50-year lease, while seniors aged 65 and above have the option of taking up the Lease Buyback Scheme to sell part of their lease back to HDB and buy a new replacement flat of the same type but on a shorter lease. 

As such, 99 per cent of residents in the Sers exercise do not need to top up for a similar flat type, whether on a 99-year lease with a smaller flat, or a 50-year lease of a similar size, said Sim.

Moreover, she noted that Sers flat owners will receive a sum of money to offset the stamp duty and legal fees for the purchase of a replacement flat that is equivalent in value to their Sers flat.