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18 Property Agents Disciplined in Past Five Years for Marketing HDB Flats that Breached MOP Rules

According to a news report from The Straits Times and AsiaOne on 9 January 2023, eighteen property agents were taken to task between 2017 and 2022 for helping their clients to market Housing Board flats that breached the agency’s mandatory five-year minimum occupation period (MOP) rule.

Of these, six agents had their registration suspended for between seven and 48 weeks and were fined between $2,000 and $5,000 by the Council for Estate Agencies’ (CEA) disciplinary committee, National Development Minister Desmond Lee said in Parliament.

Another two agents received letters of censure – which are issued for minor disciplinary breaches – with one of them fined $1,000. The remaining 10 agents were issued warning letters for their disciplinary breaches.

These property agents were found to have breached the code set by the CEA that requires them to ensure that no law, including those that apply to HDB properties, is infringed as part of their work.

CEA investigated 51 cases involving 69 property agents in the past five years, with 19 cases still under investigation, Mr Lee said in response to questions filed by nine MPs on the issue of Build-To-Order (BTO) flat owners flouting MOP rules.

This comes after some seemingly vacant and unrenovated BTO flats were reported to be up for sale on property portals in December. Agents who listed the units described them as a “blank canvas” and “never stayed in before, brand new”.

Property agents who have reasonable cause to suspect that MOP rules have been infringed should inform their clients of the potential consequences and stop marketing the property, said Mr Lee.

While property agents are not legally required to report suspected breaches to CEA or HDB but should advise their clients to abide by HDB’s regulations, said the Ministry of National Development in response to queries from The Straits Times.

HDB flat owners have to live in their units for five years before they can put them up for sale on the open market – a longstanding policy meant to reinforce public housing as a home to live in. Mr Lee said owners who cannot fulfil their MOP due to changes in their circumstances must return their flat to the HDB.

Resale Process of A HDB Flat

As part of the resale process, a flat inspection will be arranged when the owners submit a resale application on HDB Resale Portal. If there are signs that the flat has not been lived in, HDB will withhold the resale application and start investigations to check if the flat owners had failed to fulfil the MOP.

The investigation will include a physical inspection of the flat, a review of other supporting evidence or records indicating flat occupation, and interviews with owners as well as property agents, buyers, and neighbours, as required.

Separately, for flats which are referred to HDB’s panel of valuers, it will also investigate if there are “tell-tale signs” from the valuation reports of non-occupation of the flat within the MOP.

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18 Property Agents Disciplined in Past Five Years for Marketing HDB Flats that Breached MOP Rules

On a case-by-case basis, HDB may grant approval for households whose flats have not met the MOP to sell their unit. It will consider the circumstances of the flat owners and their families, and reasons for such exceptions include financial difficulties, divorce cases, or the demise of the current homeowners.

Penalties for Homeowners Selling Unoccupied Flats During MOP

HDB carries out about 500 inspections per month to detect violations of housing rules, such as illegal flat rentals. Should it receive feedback on suspected cases of violations, such as flats being listed for sale without being occupied by their owners, investigations will be carried out.

Between 2017 – November 2022, it had taken enforcement action in 53 cases where BTO owners did not occupy their flats during MOP, of which 21 involved compulsory acquisition by HDB, while the rest were issued warnings or financial penalties.

Under the Housing and Development Act, homeowners whose flats are compulsorily acquired by HDB will be debarred from buying a subsidised flat. What this means is that they will no longer be able to purchase a new flat from HDB or purchase a resale flat with their CPF Housing Grant.

They are also unable to rent a public rental flat from HDB, and not be allowed to take over any flat by changing the flat’s ownership. Any application in the HDB queue for a subsidised flat made prior to the debarment will also be cancelled. For failure to occupy an HDB flat, there will be a debarment period of five years.

What Should Property Agencies and Agents Look Out for When Advertising A HDB Flat?

As real estate professionals, it is your responsibility to ensure that all advertisements put up are lawful. This includes thoroughly understanding and advising your clients on their HDB flat’s resale eligibility and process.

Publishing unlawful advertisements are a breach of CEA’s Code of Ethics and Professional Client Care (CEPCC), and disciplinary action can be taken against errant property agencies and agents.

This article is presented by Partner360, we hope you find the information useful.

 

At PropertyGuru, we’ll see you home 😊

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