The Housing & Development Board (HDB) offers a provision known as the Temporary Extension of Stay under certain circumstances. This arrangement permits sellers of HDB flats to remain in their sold property for a short period after the resale completion, facilitating a smoother transition to their next residence.
Purpose of the temporary extension
As per the HDB website, the HDB Temporary Extension of Stay is granted only to those flat Sellers who need extra time to complete relocation. It is important to note that in such cases, the sellers must have already purchased another property, which must be ready for occupation, i.e. not in the process of construction.
The HDB also notes that the TEOS is a private agreement between the buyer and sellers of the HDB flat. It is not mediated by the government in any way, and is only given if both parties are in agreement. As such, the legal resale of the HDB flat will still take place as per the normal process and will be considered independent of the extension agreement.
It’s important to note that this arrangement is only applicable to resale transactions and not to new flat purchases from HDB.
Duration and eligibility
The extension allows sellers to stay in the flat for up to three months from the date when the resale is legally completed. No further extension hall be given.
Application process
To apply for a Temporary Extension of Stay, the following steps should be taken:
- Mutual agreement: Both parties (buyer and seller) must consent to the extension and agree on the duration, up to a maximum of three months. The agreement must also capture any monetary compensation agreed between both parties, and what might happen if the TEOS is terminated before the completion of the resale date.
- Submission during resale application: The request for the extension should be indicated in the resale application submitted to HDB. Sellers must provide proof that they have purchased a completed and move-in-ready property in Singapore by providing an exercised Option to Purchase or a signed Sales and Purchase Agreement. They can also provide a letter from solicitors or documents confirming the possession date.
- Declaration: Both parties are required to declare that the flat will not be rented out during the extension period and that the buyer will not move in until the sellers have vacated.
Important considerations
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- No rental income: During the extension period, sellers are not permitted to rent out the flat or any part of it.
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- Buyer’s occupation: Buyers must wait until the extension period concludes before moving into the flat.
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- Legal documentation: While HDB facilitates the extension, it’s advisable for both parties to document the agreement formally to prevent potential disputes.
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- Termination clause: Both parties should remember to add a termination clause in the agreement. This will specify the steps taken if in case the HDB revokes approval for the TEOS.
