Case Studies
Letter of Censure and Financial Penalty Imposed on RES Who Flouted HDB’s MOP Rule
10 November 2023
In this CEAnergy case study, we look at an RES who flouted the HDB Minimum Occupation Period (MOP) rule in an attempted sale of a flat.
November 2023 - 4 min read
The Code of Ethics and Professional Client Care (CEPCC) requires all real estate salespersons (RESs) to be fully conversant and comply with the applicable laws that apply to property transactions, including the laws, regulations, rules and procedures that apply to Housing & Development Board (HDB) flats.
To be eligible to sell their HDB flats, your clients must meet HDB's eligibility requirements, including fulfilling the minimum occupation period (MOP). The MOP is calculated from the date that your clients collect the keys to the flat and excludes any period where they do not occupy the flat, e.g. when the whole flat is rented out or where there has been an infringement of the flat lease. The full set of guidelines for selling HDB flats can be found on the HDB InfoWEB.
CEA would also like to remind all RESs that the results generated from registering the Intent to Sell (ITS) are only an indication of your clients’ eligibility to sell, and does not constitute an approval by HDB to sell the flat. There could be other matters that could have affected your clients’ eligibility to sell the flat such as divorce or estate issues that HDB may not be aware of.
For instance, in the case of a divorce, your clients would have to fulfil the MOP in order to sell the flat, unless special approval was obtained from HDB. The eligibility conditions that your clients must fulfil before they can sell their flat can be found here.
If you encounter clients who ask you to facilitate the sale of their flat when they have yet to meet HDB’s eligibility requirements, e.g. you are aware that they did not physically and continuously occupy the flat during the MOP, or if you notice tell-tale signs that the HDB flat has never been occupied, do reject such requests and explain to your clients that they have to physically occupy their flat and fulfil the MOP before selling it.
This would not only protect your own interests, but also that of your clients. Do not proceed to market or sell the flat even if your clients request for you to do so. You may also wish to call HDB’s hotline 1800-555-6370 with information on the possible infringement, such as the flat address and tell-tale signs of the non-occupation of the flat, for further investigation by HDB.
Flouting HDB's MOP rule
In this case study, we review the actions of Au Hui Nie Christina (Au), a registered RES with ERA Realty Network Pte Ltd, who had represented the owners in the attempted sale of their HDB flat even though Au was aware that the owners had never physically occupied the flat and hence had not fulfilled the MOP requirement.
In May 2015, the owners collected the keys to their Build-to-Order HDB flat but continued to reside at another property that they were already staying in prior to applying for the HDB flat as they purportedly did not have sufficient funds to renovate the flat.
At the same time, they also wanted to accompany their elderly parent who would have otherwise lived alone in the other property. Subsequently, the owners decided to sell their HDB flat and Au assisted them to advertise the flat for sale. Au knew that the owners had never physically occupied the flat after collecting the flat keys from HDB.
In December 2022, Au went to the flat and took pictures of the entire flat, which showed the flat in an unrenovated state. The following day, she proceeded to advertise the flat for sale and uploaded the pictures on an online portal, stating in the advertisement that the potential buyer could “Reno to the way you like!”, highlighting the flat’s bare condition.
According to the HDB flat owners, Au did not advise them that they had to physically occupy the flat during the five-year MOP period before selling it, even though Au was aware of HDB’s rule on MOP fulfilment before the HDB flat could be sold on the open market. Subsequently, the HDB flat was compulsorily acquired by HDB.
By her actions above, Au had breached paragraph 4(1) read with paragraph 4(2)(e) of the CEPCC for failing to comply with the applicable laws, regulations, rules and procedures that apply to HDB transactions as well as paragraph 7(1) of the CEPCC for bringing discredit or disrepute to the estate agency industry.
Au was issued a Letter of Censure and a financial penalty of $1,000 was imposed on her.
Industry Perspective
By Warren Chan
Exco Member, Singapore Estate Agents Association
As a real estate salesperson (RES), it is essential to not only possess the necessary knowledge and skills but also be well-versed with the processes and guidelines set by HDB. Every RES needs to understand and comply with the Code of Ethics and Professional Client Care.
RESs who are not familiar with HDB policies should proactively seek information from credible sources before carrying out estate agency work for their clients.
RES Christina Au, despite being fully aware that the owners of the HDB flat she was trying to sell had not occupied the property during the mandatory five-year Minimum Occupation Period (MOP) – thereby not fulfilling the MOP requirement – still went ahead to market the flat. This behaviour is highly inappropriate.
The repercussions of her actions have been significant: her client's property has now been compulsorily acquired by HDB.
In our line of work, it is imperative for a RES to act responsibly from the outset because rectifying mistakes later might not always be possible.
Information accurate as at 10 November 2023