A change to the Housing and Development Act passed by Parliament on 6 October (Tuesdays) will enable the Housing & Development Board (HDB) to seize flats from owners who intentionally made misleading or false statements when transferring flat ownership.
Before the change to the Act, the compulsory acquition of a flat can only occur when such misleading or statements are made for the purchase of flats, not for transfer of flat ownership.
A transfer of flat ownership may happen due to a change in a family circumstances, such as marriage, divorce, or financial hardship. The transfer may occur without money changing hands, or by means of a Court Order in cases such as divorce.
Flat owners must meet all eligibility conditions set out by HDB before an application for transfer of flat ownership. There is also a set of post-transfer conditions that proposed and withdrawing owners must adhere to after the transfer of flat ownership is executed.
On the HDB’s extended powers to seize flats from owners who made false statements, Ms Nadia Ahmad Samdin of Ang Mo Kio GRC asked if that would “excessively penalise” flat owners who may be innocent and unaware of the misrepresentation of facts.
Replying to Ms Nadia’s question, National Development Minister Mr Desmond Lee said HDB will investigate each case thoroughly before initiating compulsory information.
He added that “HDB will not exercise its powers to compulsorily acquire HDB flats lightly, and will generally only contemplate such action as a last resort for egregious cases, and where the flat owners refuse to regularise the ownership of the flat.”
Another change made to the Housing and Development Act during the same Parliamentary session will allow approved banks to pledge property loans involving HDB flats as collateral for liquidity from the Monetary Authority of Singapore (MAS).
This is part of a pre-emptive measure allowing local banks and finance companies to gain access to more funds if they run into liquidity problems during the the Covid-19 recession.
On this change, Mr Lee assured HDB flat owners that they will not be “adversely impacted” in any way. “This arrangement will neither affect flat owners’ rights to their flats, nor result in any change to the terms and conditions of their housing loans,” said the Minister. HDB flat owners will continue to pay off their housing loans with the approved lending bank/financial institution.
HDB flat owners will not be impacted even in the worst-case scenario. “In the highly unlikely scenario where an approved financial institution defaults on its loan from MAS, MAS will take over the residential property loans and HDB flat owners will be asked to re-direct their loan repayments to another approved financial institution appointed by MAS,” said Mr Lee.
He added that the current housing non-performing loan ratio in Singapore remains low and stable at around 0.5%.
Other changes made to the law include increasing the maximum number of board members on the HDB board from 12 to 15.
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About Kyle Leung
Content Marketing Manager @ 99.co
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