http://www.businesstimes.com.sg/arch...-stay-20140723
Published July 23, 2014
HDB to allow flat sellers to extend stay
By lee meixian
[email protected] @LeeMeixianBT
FLAT sellers will, with immediate effect, be able to negotiate with buyers for a temporary extension of stay in their flats by up to three months.
This will give them more time to move out of their sold flats, the Housing & Development Board (HDB) announced yesterday.
This relaxed rule is likely to benefit about 15 per cent of total resale transactions, or some 2,700 households a year, it added.
Minister for National Development Khaw Boon Wan and property consultants welcomed the change; the latter even expect this to boost resale transaction volume in the months to come.
Currently, flat sellers must move out as soon as they complete the resale transaction because flat buyers are required under the lease to immediately occupy their new homes.
According to the new policy, flat sellers who wish to extend their stay temporarily must have committed to buy a completed home (be it the exercising of an option to purchase, or signing of a sale and purchase agreement) in Singapore at the time of the resale application.
They have to submit their requests for the extension to HDB when applying for the resale, and the extension will automatically cease at the end of three months. Any earlier termination must also be communicated to HDB, as this will impact flat buyers' minimum occupation period, which starts on the day when they take over the flat.
Both parties must privately negotiate and agree on the details of the extension, including the duration and any monetary compensation.
"This move will facilitate sellers who are transiting to their next homes, including those who may need more time for renovation or those awaiting funds from the sale of their current flats, eg contra cases," HDB said.
Contra cases refer to the buying and selling of a home simultaneously, sometimes even on the same day.
In a blog post yesterday, Mr Khaw commended HDB for the move. The previous arrangement often led to flat sellers having to "frantically look for some short interim rental arrangement, resulting in some disruption to their daily life", he said.
"We settled on a three- month period as we think it should be sufficient time for flat sellers to complete the purchase of their next home, or make the necessary arrangements to shift into their next home."
Property consultants agreed that the policy tweak was "long overdue" and that its facilitation of smoother transitions may boost resale transactions going forward, as some HDB owners may be encouraged to consider their upgrading plans.
ERA Realty key executive officer Eugene Lim said: "It is something the market has been pushing for some time and it is certainly a relief that we now have an official policy to allow for this temporary extension of stay for the seller after the completion of the sale."
CEO of PropNex Realty Mohd Ismail said: "Prior to this, a problem existed whereby many buyers and sellers and property salespersons took the risk of mutually agreeing to such an arrangement that was not legally recognised."
But he added that it is unlikely to have a major impact on HDB resale prices.