- POSTED: 22 Jul 2014 12:36
- UPDATED: 22 Jul 2014 20:18
Sellers of HDB flats will be able to negotiate with their buyers for a temporary extension of stay in their flats by up to three months.
SINGAPORE: Sellers of Housing and Development Board (HDB) flats will be able to negotiate with their buyers for a temporary extension of stay in their flats, allowing them to stay in their former homes for up to three months, the HDB said on Tuesday (July 22).
The new rule, which takes immediate effect, 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, the HDB 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," said Minister for National Development Khaw Boon Wan in a blogpost.
He added that the HDB estimates that about 15 per cent of total resale transactions, or about 2,700 households a year, will stand to benefit from this policy tweak.
Flat sellers who wish to extend their stay temporarily must have committed to buy another home – whether HDB flat or a private property – in Singapore at the time of the resale application. In other words, they must have exercised an Option to Purchase or signed a Sale and Purchase Agreement, the HDB said.
The request for the extension of stay is to be submitted to HDB at the time of the resale application.
But HDB clarified that buyers must start paying the monthly instalments of their housing loans, property tax as well as service and conservancy (S&CC) charges once the resale transaction is completed and they become legal owners of the flat.
Only the Minimum Occupancy Period will commence on the day the extension (of stay) ends.
Details of the extension, including the duration and monetary compensation, if any, must be mutually agreed upon by both parties.
Real estate company ERA lauded the move, saying it is "great news" for flat sellers.
"Most HDB flat owners are single home owners. When you sell your flat, there may be transitional issues as the completion timing of the flat purchased may be later than the completion time of the flat sold, said Mr Eugene Lim, Key Executive Officer at ERA, in a statement on Tuesday.
"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."
Mr Lim added that the move may help to boost resale HDB volume in the months to come.