Written Answer by Ministry of National Development on compensation resulting from cancellation of flat purchase

Oct 1, 2018

Mr Lim Biow Chuan: To ask the Minister for National Development whether HDB can review the amount of compensation payable to purchasers of flats who have to cancel their purchase due to divorce or nullity of marriage.

Answer:

The financial forfeiture for cancellation ensures that flat applicants are committed to their purchase. This is necessary as HDB sets aside flats for successful applicants, and has to turn away other applicants as a result. The forfeiture also covers the holding and administrative costs incurred by HDB as a result of the flat cancellation. 

Flat buyers who cancel their application after signing the Agreement For Lease but before key collection will receive a partial refund of the downpayment made for the flat, if the downpayment was more than 5% of the flat price.

As for flat buyers who return their flat to HDB after they have collected their keys, they may receive substantial compensation of up to 95% of the flat price.

In cases where the cancellation of the flat purchase is due to a change in family nucleus, for instance due to divorce, HDB can allow one of the parties to retain the flat by including another eligible person into their flat application, subject to the outgoing party’s consent. There is no financial forfeiture involved for such cases.

If they are unable to retain the flat, HDB will look into their individual circumstances and can exercise flexibility if they have extenuating circumstances such as financial hardship.