Written answer by MND on data on cases of suspected breaches of Minimum Occupation Period and enforcement actions taken
Jan 9, 2023
Questions No: 2525, 2562, and 2567
Questions by: Mr Leon Perera, Ms He Ting Ru, and Mr Zhulkarnain Abdul Rahim
2525. Mr Leon Perera: To ask the Minister for National Development (a) whether HDB plans to enhance its processes to ensure Minimum Occupation Period (MOP) rules are met for advertised properties in light of recent incidents; (b) how many real estate agents including owners of property sales portals have been found to have assisted in the listing of such properties that have not met MOP rules over the last five years; and (c) what enforcement action is taken in relation to agents’ obligations under the Code of Ethics.
2562. Ms He Ting Ru: To ask the Minister for National Development in each of the last 10 years (a) how many cases of suspected breaches of the Minimum Occupation Period policy have been investigated by HDB; (b) what is the breakdown of such cases according to flat type; and (c) how many flats have been compulsorily acquired by the HDB as a result of such breaches.
2567. Mr Zhulkarnain Abdul Rahim: To ask the Minister for National Development whether the Ministry will consider increasing the frequency of HDB flat inspections for both resale and rental flats in future, to ensure proper occupancy of subsidised HDB resale or rental flats.
Answer:
HDB flats are primarily meant for owner-occupation. Owners are required to physically occupy their flat during the Minimum Occupation Period (MOP), before they are allowed to sell their flat on the open market or rent out the whole flat. During the MOP, owners are not allowed to leave the flat vacant, or rent out the whole flat without staying in it – this also means that owners are not allowed to rent out their whole flat under the guise of renting out only the bedrooms, by locking up one room and not living in it. This also applies to Executive Condominiums (ECs).
2 All buyers of HDB flats are required to acknowledge HDB’s rules and regulations, including those relating to the MOP, at various points of their flat purchase process. Furthermore, the relevant rules and regulations are readily available on the HDB InfoWEB. Flat owners would therefore know that they are not allowed to leave their flat vacant, or rent out the whole flat without staying in it, during the MOP.
3 The MOP policy safeguards HDB flats for households with genuine housing needs. It also helps to deter the speculative purchase of HDB flats, and thus helps to keep HDB flats affordable. Nevertheless, we recognise that flat owners’ circumstances may change over time. Some may aspire to own a bigger flat or private residential property as their financial situation improves, while others may wish to right-size or to move closer to their parents or children for mutual care and support. The current 5-year MOP seeks to strike a balance: on the one hand reinforcing the objective of owner occupation, while on the other hand not unduly hampering those who want to move when their family circumstances or life needs change.
4 Flat owners who face genuine circumstances and cannot stay in their HDB flat during the MOP, such as those who may be posted overseas for work for a period, should write in to HDB to seek waiver of the MOP rule. HDB will assess such appeals on a case-by-case basis.
5 Where appropriate, we have made the MOP longer to strengthen the owner-occupation intent of our public housing. For instance, the MOP for flats launched under the Prime Location Public Housing (PLH) model is set at 10 years. And rental flat tenants who get additional support under the Fresh Start Housing Grant to buy a new HDB flat have to meet a 20-year MOP. During Our Housing Conversations held under the auspices of ForwardSG, we had received several suggestions to strengthen the owner-occupation intent of public housing. For instance, some suggested increasing the MOP for all flat types. Other participants suggested carving out popular BTO projects, such as those in well sought-after locations or areas which have very favourable attributes such as close proximity to amenities, and imposing tighter HDB ownership conditions – such as longer MOP – to further deter speculative intent. They say this could be an expansion or variant of the PLH model. And yet, there are other participants who suggested tiered MOPs – for applicants at the same income level, those who accept longer MOPs can get more subsidies, and those with shorter MOPs get much lesser subsidy and pay for BTO flats at close to market price. We are studying the very many views and ideas carefully and will continue to regularly review our housing policies to meet the needs of Singaporeans.
6 Owners who are unable to fulfil their MOP due to changes in their circumstances will need to return their flat to HDB. Between January 2017 and December 2022, a total of 258 BTO flats and 168 resale flats have been returned to HDB, mostly due to changes in owners’ circumstances within the MOP, which rendered them ineligible to own an HDB flat. Circumstances include divorce or separation, demise of the owner, medical reasons and so on. As these owners had not fulfilled their MOP, they were not allowed to sell their flat on the open market.
7 HDB detects potential infringement of HDB rules and regulations through a range of methods, including regular inspection of HDB units, feedback from members of public and property agents, as well as the use of data analytics and other tools. Some of these involve confidential investigative methods, and I shall not go into the details.
8 In detecting and investigating infringements, HDB tries to strike a balance – on the one hand, we want to ensure that HDB rules are complied with by detecting and deterring errant owners who infringe the rules; on the other hand, we do not want to overly impinge upon the privacy of the 1.1million HDB homeowners, the vast majority of whom abide by the rules.
9 On regular inspections, HDB conducts 500 inspections randomly each month to detect infringements of HDB rules and regulations, such as unauthorized renting out and non-occupation of flat. Since 2017, HDB has inspected some 35,000 homes to conduct random checks.
10 HDB also investigates feedback received from members of public and property agents on suspected cases of HDB rule infringements, such as flats being listed for resale in bare or “brand-new” condition. Between 2017 and 2022, HDB received around 4,700 pieces of feedback on potential infringement relating to HDB’s MOP rules.
11 In addition, as part of the HDB resale process, HDB also conducts inspection on all HDB flats involved in a resale transaction. Flats that have been found to be in bare or “brand-new” condition will be flagged up for further checks.
12 HDB receive information about suspected cases of infringement across all flat types. Should any infringement against HDB rules and regulations be established, action will be taken, and the resale transaction will not be allowed to proceed.
13 HDB takes the violation of its rules and regulations seriously and will not hesitate to take enforcement action against errant owners. Depending on the severity of the infringement, HDB may issue a written warning, impose a financial penalty of up to $50,000, or compulsorily acquire the flat. From January 2017 to November 2022, HDB had taken action against 53 owners who had not occupied their flats. Of these 53, 21 had their flats compulsorily acquired due to MOP infringement. Owners whose flats are compulsorily acquired by HDB will also face other consequences. For instance, they will be debarred from purchasing subsidised flats or taking over such flats by way of change in ownership, among others.
14 Property agents who perform estate agency work, too, have a role to play in ensuring that HDB’s rules and regulations are not breached. Property agents are required to comply with the Estate Agents Act and its Regulations, including the Code of Ethics and Professional Client Care (CEPCC). Under the Code, property agents need to perform due diligence in the course of carrying out estate agency work to ensure that no law, including those that apply to HDB properties, has been infringed.
15 If a property agent has reasonable cause to suspect that HDB MOP rules have been infringed, he should inform his client of the potential consequences, and stop marketing the client’s property. The Council for Estate Agencies (CEA) has taken disciplinary action against agents who have been found to have breached CEA’s regulations in assisting such owners to sell or rent out their flats.
16 Between 2017 and 2022, CEA investigated 51 cases involving 69 property agents who had assisted their clients to market HDB flats which might not have met MOP rules. Investigations into 32 cases have been completed, and CEA took disciplinary action against 18 property agents who were found to have breached the Code. Six agents had their registration suspended for between seven and 48 weeks and received financial penalties ranging from $2,000 to $5,000 imposed by CEA’s disciplinary committee. Two property agents were issued Letters of Censure (LOC), one of whom was also imposed with a Financial Penalty of S$1,000. The remaining 10 agents were issued with warning letters for their disciplinary breaches. The remaining 19 cases are still under investigation.
17 HDB and CEA will continue to work closely together to investigate cases involving HDB owners who sell or rent out their flats during MOP.
18 We thank Members who have provided suggestions on how to better detect and deter errant owners. We would also like to thank the members of public who have blown the whistle on suspected non-occupation of HDB flats. HDB will investigate such cases and continue to take firm action against infringement of HDB rules and regulations. Members of public can continue to report cases to HDB via the toll-free hotline at 1800-555-6370, or via email.