Disputes over Housing Board flats tend to be less complicated than those involving private real estate because the rules governing public housing are simpler and accessible to the public online.
For instance, only registered HDB owners are recognised when it comes to ownership because the law specifically deems trusts, or an arrangement to hold a flat for another person’s benefit, null and void.
Such clarity helps to prevent the kind of disputes often seen in private real estate that involve competing claims from people who say they have shares in the property.
These three family disputes involving HDB flats offer useful lessons – and cautionary tales.
Minimum occupation period (MOP)
Unlike private property, which does not have minimum holding periods, HDB owners must observe a five-year MOP for most flats and 10 years for “prime location” ones.
Couples who split up during the MOP have two choices – surrender their flats to the HDB and miss out on reaping the eventual profits from the resale market, or wait for the MOP to expire. Until the MOP ends, they cannot buy another residential property.
In a recent dispute, a couple called it quits after three years. As the break-up occurred before they moved into their newly purchased resale flat, the $370,000 property became the only contested asset.
Everything came down to how much each of them had spent on the flat, which was bought with a loan and money from their CPF accounts.
As the wife had spent more for the purchase and also paid for most of the renovations, the High Court awarded her 67 per cent of the flat and 33 per cent to the former husband.
Despite the ruling, they had to wait for the MOP to elapse before they could sell the flat to get their money back.
Important to know the rules
Before you buy out the share of a co-owner of your flat, check the rules, especially on whether you are eligible to keep it yourself. Failure to do so can be expensive, as one owner who lost more than $200,000 found out.
He devised a strange plan to get his former wife to transfer the flat to him, but without making his intention clear.
They had both used their CPF money to pay for the flat, so he deposited $200,000 in his former wife’s Ordinary Account as a refund for the amount used for the purchase. He then told her to use part of the sum to pay off the remaining mortgage of $125,000.
But he did nothing else after that. Even when the couple were told to attend court proceedings involving their asset division, he did not show up.
As a result, the former wife was awarded the whole flat, which remained the home for her and their children.
Only registered owners matter
A man sought to prevent his former wife from staking a claim on his HDB flat by saying that the unit actually belonged to his parents.
Although the home was in his name, his parents claimed they were the actual owners because it was bought with the sale proceeds from their previous flat.
Before his marriage, the son convinced his parents to register the new flat in his name so they would not need to pay a resale levy that existing HDB owners must pay when they buy another new apartment.
As the son’s flat was bought with funds from his parents, they argued that they should be deemed the beneficial owners. They also argued that the prohibition in the HDB law was meant to stop ineligible buyers, such as foreigners, and not citizens like them who could buy such flats.
But the Court of Appeal ruled that the parents could not have any interest in the flat because they were ineligible to own any flat by not paying the resale levy.
The lesson from these cases is this – when it comes to putting your money in properties or investments, it pays to know the rules so that you don’t end up short-changing yourself due to plain ignorance.
“Source:[Slight uptick in resale condo prices and sales in February despite sluggish start to 2024] © Singapore Press Holdings Limited. Permission required for reproduction”
