Thursday, 24 July 2014

HDB sellers can stay in their sold flats for up to three months if buyers agree

By Janice Heng, The Straits Times, 23 Jul 2014

HOUSING Board flat sellers can now stay in their sold units for up to three months after closing the deals, if the buyers agree.

Previously, sellers had to move out once the sales were completed. But this put some of them in a difficult situation, noted National Development Minister Khaw Boon Wan in a blog post yesterday.

Some were not able to move into their new homes as renovations were still in progress, for example. Others may have needed the funds from the sales to complete the purchase of their next flat.

These include those who are selling one flat and buying another at the same time, in so-called contra deals. The proceeds and refunded Central Provident Fund monies from the sales are used to buy the second flat.

Such sellers often had to "frantically look for some short interim rental arrangement", he noted.

This issue arose occasionally during his Meet-the-People Sessions, and he had to appeal to the HDB on the sellers' behalf to give them more time to move out.

Now, buyers and sellers can privately negotiate and agree upon a temporary extension of the sellers' stay, for up to three months.

The extension request must be submitted to the HDB together with the resale application.

By then, the seller must have already committed to buy a completed home, public or private.

The HDB must be informed if the seller moves out earlier than planned, as this will affect the buyer's minimum occupation period.

The buyer will still have to start paying his mortgage once the deal is closed.

In a statement, the HDB said the change was part of its regular review to respond to the needs of resale sellers and buyers.

It estimates that 15 per cent of all resale transactions, or about 2,700 each year, will benefit.

Property agents and experts said sellers would welcome the change.

ERA Realty agent Jolene Ho said some buyers and sellers used to resort to similar arrangements that were illegal. Said Dennis Wee Realty agent Judy Tay: "At least it's legal now, so we can assist with such arrangements."

By making the transition between flats more convenient, the change could help boost HDB resale volumes, said ERA Realty key executive officer Eugene Lim.

PropNex Realty chief executive officer Mohamed Ismail Gafoor also welcomed the "long overdue" change, but did not expect any major impact on prices.

Public servant Peter Thien, 52, said the tweak will give peace of mind to sellers like him who juggle two deals at once.

He is in the midst of selling a MacPherson five-roomer to move into a four-room flat in Hougang with his family. "It is helpful in the case of any delay," he said.

* Over 600 sellers extend stay in flat
HDB relaxed rule in July to help those who might need more time to move
By Yeo Sam Jo, The Straits Times, 10 Nov 2014

WHEN Madam Muhainah Md Salleh sold her Housing Board flat in September, she was prepared to rent it back from the buyer while waiting for her new unit to be renovated.

But the 55-year-old civil servant did not have to after all, thanks to a relaxed rule which allows HDB flat sellers to negotiate with their buyers for a temporary extension of stay in their flats.

As at the end of October, 645 flat sellers, including Madam Muhainah, have requested to stay for longer in their old flats, said the HDB.

The rule was relaxed on July 22 to help sellers who might need more time to refurbish their new flats, or who might be awaiting funds from the sale of their current units.

"This gives me more than enough time to renovate my new flat," said Madam Muhainah, who lives in her three-room Yishun flat with her 46-year-old security guard husband, maid and three grandchildren.

The family will be moving to a four-room flat a few blocks away, but had to repaint the place and retile the kitchen and bathrooms. The renovation will be done only at the end of this month.

"It is good that the buyer was not in a hurry to move in," she said. "I can save some money by not renting the place."

Under the new practice, both the flat buyer and seller have to agree to the temporary extension, which can go up to three months.

The extension request must be submitted to the HDB along with the resale application. By then, the seller must have already committed to buy a completed home, public or private.

Private arrangements, such as the duration of the extension and any monetary compensation, must also be mutually agreed to by both parties.

Previously, sellers had to move out once the sale was completed, and similar arrangements, if any, had to be made under the table.

PropNex Realty chief executive Mohamed Ismail Gafoor said he is "not surprised" that many HDB sellers have opted to extend their stay.

"It only goes to show how many people took the risk by going into mutual agreements when this was not legal," he said. "HDB did not recognise these arrangements, and there was no redress if anything went wrong. For example, a buyer might change his mind about the extension - this has happened many a time."

The HDB estimates that about 15 per cent of total resale transactions, or 2,700 households a year, will benefit from this new practice.


No comments:

Post a Comment