To resell your HDB Flat a checklist you must read
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All that you need to know when you decides to Sell your HDB Flat
Have you fulfilled your flat’s Minimum Occupancy Period?
Before you start selling, ensure you have fulfilled your flat’s Minimum Occupancy Period (MOP). The Minimum Occupation Period (MOP) is a mandatory duration during which flat owners are required to physically occupy their flats before they can sell them on the open market. The MOP is calculated from the date when the flat keys were collected. For flats purchased from HDB or resale flats bought from the open market with the CPF housing grant, the MOP is typically 5 years.
However, as the MOP duration may vary depending on how you purchased your flat, the flat type, and the date of flat application, refer to HDB’s website to check the MOP duration for your specific flat.
Take note that the MOP excludes:
- Any period when you do not occupy the flat (e.g., when the whole flat is rented out) and
- Any period where there has been an infringement of the flat lease
Selling part of your HDB flat lease instead of the entire flat
If you are a senior citizen residing in an HDB flat, consider the Lease Buyback Scheme (LBS) instead of selling your flat. Under the LBS, you can sell a portion of your flat’s lease to HDB and keep the remaining lease based on the youngest owner’s age. The sale proceeds will be credited to your CPF Retirement Account (RA), which you can then utilize to purchase a CPF LIFE plan that can give you a steady monthly income for the rest of your life. This way, you can continue living in your HDB flat while receiving an income during retirement. To learn more about the LBS, including eligibility criteria and application procedures, please visit HDB’s website.
Step-by-Step Process of Reselling Your HDB Flat
All resale applications are processed using the My Flat Dashboard. You may log in using your SingPass to manage your resale online.
The steps to reselling your flat are as follows:
- Register the Intent to Sell on the My Flat Dashboard and use the HDB-prescribed Option to Purchase (OTP) to enter into a contract with potential buyers;
- Submission of your resale application on the My Flat Dashboard;
- Endorsement of resale documents (acknowledge the documents on the My Flat Dashboard) ;
- Payment of resale fees;
- Receive approval of resale application; and
- Attend the Resale Completion appointment.
The entire process, from accepting the resale application (step 2) to completing (step 6), takes about 8 weeks.
Here are some of the key points to take note of under each step:
- Register intent to sell
Please start reselling your flat by logging into the My Flat Dashboard and registering an intent to sell.
On registering your intent to sell, you will:
- Be able to confirm your eligibility to sell your flat instantaneously;
- Be informed of when you may start to grant an OTP to potential buyers;
- Receive information on the Ethnic Integration Policy/Singapore Permanent Resident (EIP/SPR) Quota for your block and
- Receive information on the status of upgrading your block, billing of upgrading costs, and recent transacted prices of nearby flats.
Take note of the EIP/SPR quotas, which will influence the demographics of buyers you may sell your flat to. If a sale to a particular buyer will cause the block/neighborhood’s EIP and SPR quota to be exceeded, you cannot sell your flat.
Also, check if your flat is affected by any Upgrading/Estate Renewal Programme using the “Enquire Status of HDB’s Upgrading /Estate Renewal program” e-service.
If any upgrading works have been completed, make sure to use the same e-service to check the schedule of billing dates, as this will determine whether you or the buyer will be liable to pay for the upgrading cost.
Once you register your intent to sell, you will be directed to download a copy of the HDB-prescribed Option to Purchase (OTP). This is the only agreement you can use to sell and purchase the flat. All other agreements are invalid under the Housing and Development Act.
The procedure to enter into a contract using the OTP is:
- Negotiate and agree on the resale price with your buyer.
- Grant the OTP to the buyer.
- If the buyer wishes to proceed with the purchase, they will exercise the OTP within the option period. If not, let the OTP expire where. The buyer will forfeit the Option Fee.
- Upon exercising the OTP, decide with your buyer when to submit the resale application (under clause 12 of the OTP).
Read through the Important Notes on the OTP and the Terms and Conditions of Resale, as you and your buyer must comply with all the procedures and requirements listed in these documents.
In particular, take note of the requirements for the Option Fee, Deposit, and Option Period:
Prescribed Option Fee: More than $0, up to $1,000
Deposit: More than $0, up to $5,000(Option Fee + Option Exercise Fee = Deposit)
Option Period: 21 calendar days (including Sat/ Sun & Public holidays) from the OTP’s granting date. The Option expiry time is standardized at 4 pm. (e.g., If the Option is granted on 1 January 2024, the Option will expire on 22 January 2024 at 4 pm)
Other conditions to take note of are:
- You can only issue an OTP after at least 7 days have passed since the registration of your intent to sell;
- You can only issue one OTP at a time.
- You and the buyer must declare to HDB the actual resale price of the flat (i.e., the price that you and your buyer negotiated and agreed on).
- Submit resale application
After exercising the OTP, you and the buyer must submit your respective portions of the resale application and documents to HDB via the My Flat Dashboard.
Take note that there are two essential time requirements to meet:
- You and your buyer must submit your respective parts of the application within 7 calendar days of each other and
- Under clause 12 of the OTP, you and the buyer must agree on a timeframe to apply. Make sure to meet the time you arranged with your buyer.
Some of the information and documents you will have to provide are:
- The details of the OTP (Serial No., Option grant/exercise date, purchase price, Option Fee/ Option Exercise Fee);
- Your particulars;
- The buyer’s particulars;
- Whether you have an existing loan with HDB or any financial institution and
- Declarations regarding your purchase.
You may also have to submit additional supporting documents for your resale application. These will be listed in the My Flat Dashboard when you submit your resale application.
For example, if your spouse is not an owner of the flat, they will need to endorse in the HDB Flat Portal (or in any manner that HDB decides) their consent/acknowledgment form to acknowledge the sale or purchase of the flat.
HDB will verify the information provided and notify you of the acceptance of the application via SMS/E-mail. You can also check the status of your application on the My Flat Dashboard. After the acceptance of the resale application, there will be an 8-week processing period during which you will have to complete steps 3 to 6.
- Endorse resale documents
When HDB accepts your resale application, you and the buyer must endorse documents that HDB will prepare for you through the My Flat Dashboard. These include:
- Seller’s sale proceeds
- Acknowledgment for Upgrading Programme (if applicable)
- Spouse Consent for Sale of Flat (if applicable)
- Resale documents for acknowledgment
You will be notified via SMS to endorse these documents via the My Flat Dashboard.
- Pay resale fees
Both you and the buyer will each have to pay an administrative fee of $40 for one- and two-room flats and $80 for three-room and bigger flats. You can do so online via credit card using the My Flat Dashboard.
You must also pay any legal fees (see below), seller’s stamp duty (if applicable), property tax, and costs for service & conservancy charges.
- Receive approval of resale.
Typically, HDB will grant approval for the resale within 2 weeks after you and your buyer have endorsed the documents prepared by HDB.
Once the application is approved, you and the buyer will be notified via SMS and emails, and the approval letter will be posted on the My Flat Dashboard for both you and your buyer to view.
Please take note of the information in the approval letter, which will include:
- The date of HDB’s flat inspection is scheduled to be about 5 working days upon the approval of the resale application. The purpose of the inspection is to check if there are unauthorized renovation works that may damage HDB property and affect the structural stability of the flat/building and
- The tentative resale completion appointment date.
- Resale completion
The final step is resale completion.
The final step towards completing the resale of your HDB flat involves a Resale Completion Appointment at HDB Hub. During this appointment, you and your buyer will sign legal documents, and the keys to the flat will be handed over to the buyer. HDB will schedule an appointment about 8 weeks from the resale application’s acceptance date, and you and your buyer will be notified via SMS of the actual date and time once it is scheduled. You can also check this information on the My Flat Dashboard.
If you need to change the scheduled date, you and your buyer must write to HDB and ask for their consent. HDB will reschedule the appointment at their discretion. At this stage, you must engage an HDB or private lawyer to act on your behalf to convey the resale. If you engage an HDB lawyer, you must attend the resale completion appointment, while if you engage a private lawyer, the lawyer will attend the completion appointment on your behalf.
It’s important to note that you will have to move out of the flat before the Date of Completion so that the buyers can take possession of the resale flat after the completion appointment. If you cannot do so immediately, you can apply for a temporary extension of stay for up to 3 months after the resale completion.
Hiring a Lawyer to Assist with the Transaction
Here is how you can get a lawyer to help with the legal aspects of your resale.
Hiring an HDB lawyer
If you choose to appoint HDB to act for you in the conveyancing, the legal fees will be as stated in the First Schedule of the Housing and Development (Conveyancing) Rules 2002.
The scale of legal fees for a resale of an HDB flat is as follows:
First $30,000 13.5¢ per $100 or part thereof
Next, $30,000 10.8¢ per $100 or part thereof
After that, 9.0¢ per $100 or part thereof
Note: The minimum fee is $20.
To get an estimate of the legal fees you must pay, you can use the e-service “Legal Fees Enquiry Facility” on HDB’s website.
Hiring a private lawyer
When reselling your HDB flat, engaging a private lawyer can be very helpful in ensuring that all legal aspects of the resale are in order. This can help you avoid any complications during the process and protect your interests.
While an HDB lawyer can handle the conveyancing process, you may need additional assistance to guide you through the resale transaction. A private lawyer can advise you on your rights and liabilities and help you better understand your position.
Suppose you choose to hire a private lawyer. In that case, it’s important to note that you must produce a letter from your solicitor confirming their representation when you submit your resale application to HDB. You can also engage a private lawyer at the contractual stage by completing the Authorisation Form in the OTP (when preparing to grant your buyers an OTP).
To ensure a seamless and stress-free resale process, it’s recommended that you engage the services of a trusted conveyancing lawyer. They can assist you in navigating the legal complexities of the resale process and help ensure a successful outcome.
Conclusion – To resell your HDB Flat a checklist you must read
These are just the procedural steps of processing your HDB flat once you get a buyer. You will probably need a good real estate agent to assist you on it. We will work through the timeline with you accurately to have less stress for the sale of your HDB.
Should you require assistance, you can contact one of our trusted BUYCONDO Team to help you through the no-hassle process of reselling your HDB flat by us.
Should you require assistance, you can contact one of our trusted conveyancing lawyers to help you through the legal process of reselling your HDB flat.
Reference : https://singaporelegaladvice.com/
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