ST : HDB allays fears it may block sales

Oct 21, 2010

HDB allays fears it may block sales

By Jessica Cheam, Housing Correspondent



THE Housing Board (HDB) yesterday said that the additional disclosures it is requiring from flat sellers are meant to help them make responsible decisions, not block the sale of flats.

Earlier this week, the HDB introduced a seven-day cooling-off period which sellers must go through, as well as a requirement to submit an enhanced 'resale checklist'.

The new checklist requires those wanting to sell their HDB flats from Nov 1 to disclose certain information.

Flat sellers will have to state their next housing arrangement, and those buying another HDB flat will have to work out the sales proceeds of their current flat and submit a financial plan for buying the next flat.

This has raised concerns about whether such disclosures by home buyers could be a basis for HDB to reject sale applications. HDB could disagree with the financial plans, for instance.

The resale checklist was first introduced in 2008.

Responding to queries yesterday, HDB said the objective of the enhanced checklist and financial plan was to assist sellers in making an informed decision.

'More importantly, it is to help sellers plan ahead and consider where they would be moving to after they sell their flats. It is not meant to make the resale process unduly onerous or to block the sale of the flat,' it said.

'However, it is the sellers' and their agents' responsibility to work out the financial plan and to draw their own conclusions on whether the seller would have proper alternative accommodation after the sale of the flat,' it added.

PropNex chief executive Mohamed Ismail said it was unlikely that HDB would intervene in practice. 'This form is just a thought process for HDB sellers, to see roughly whether or not they can afford the next purchase,' he said.

Home seller Victor Ching, 52, who recently put his Yishun flat up for sale to test the market, felt that the checklist was slightly troublesome but a good thing.

'Many buyers tend to spend the money too quickly after they sell their homes, but they don't know how to calculate how much they actually earn from the sale after the deductions, like CPF (Central Provident Fund) and paying for the next flat,' he said.

Another potential seller, Ms Teh Ailin, in her 30s and living in Sengkang, noted that the information required was 'quite personal', but agreed that it was justified as she would have to do those sums anyway.

Also, some of the information required, such as the seller's monthly income, is already provided to the HDB.

HDB provides a financial calculator on its website for flat sellers to determine their sale proceeds and financial plan.

Sellers are asked for information such as the price of the flat, their gross monthly income and expenditure to determine the amount of monthly repayment for their new flat.

After sellers have submitted the checklist and waited for seven days, they can grant the option to purchase to the buyer.

The cooling-off period and the enhanced checklist came after MPs called for such a provision during a recent Parliament sitting.

MP for Hong Kah GRC Ang Mong Seng told The Straits Times he fully supported the changes as he had seen appeals from constituents who sold their flats because of bad financial advice or pressure to sell their homes fast.

'I've encountered aged home owners who sell their flats to settle debts in the family, then they end up with no money left to buy the next house,' he said.

West Coast GRC MP Cedric Foo, chairman of the Government Parliamentary Committee for National Development and Environment, said he had come across similar situations where residents who had already sold their flats were desperately looking for new accommodation, claiming they had been misled by agents.

'I think the checklist helps in terms of making sure that anyone who sells is clearly aware of how they're going to get the next flat, and how they are going to finance it,' he added.

Additional reporting by Cheryl Ong