Case Studies
Providing Correct Advice on HDB’s MOP Rules to Clients
25 July 2024
This CEAnergy article looks at the need for RESs to provide correct advice to their clients on HDB's MOP rules, and the consequences when the rules are infringed.
July 2024 - 3 min read
Real estate salespersons (RESs) are expected to be familiar with HDB’s minimum occupation period (MOP) rules, and to advise their clients accordingly.
From 2019 to 2023, HDB took enforcement action against 800 cases for the unauthorised renting out of HDB flats and bedroom(s), the non-occupation of their HDB flat or acquired interest in private property within MOP, with around 70 flats compulsorily acquired.
From 1 January 2022 to 11 October 2023, CEA took action against 20 RESs who were found to be involved in such breaches of the MOP rules. The range of actions taken include censure, financial penalties and suspension of their registration.
Acquiring private residential property during MOP not allowed
Under HDB’s MOP rules and regulations, HDB flat owners cannot purchase private residential properties locally or overseas within the flat’s MOP.
If a single bought an HDB flat but subsequently becomes married, this person and the spouse must fulfil the MOP for the HDB flat together, i.e. neither of them can buy a private residential property. Acquiring a private residential property to hold on trust for another person during the MOP is also not allowed.
In 2022, an RES was imposed with a financial penalty of $8,000 and a suspension of 6 months for failing to conduct his business and work with due diligence and care. The RES had wrongly advised his client, a HDB flat owner, that he was able to acquire a private residential property and hold on trust for his minor child during the MOP of the flat.
Relying on the RES’s advice, the client acquired a private property within the MOP of his HDB flat. HDB imposed a financial penalty of $45,000 on the RES’s client for infringing HDB’s MOP rules.
The following table highlights the rules around acquiring private residential properties within a flat’s MOP.
The flat owner, his/her spouse and the flat’s authorised occupiers (be it listed as an essential occupier or an occupier) are not allowed to acquire local/overseas private residential properties, within the flat’s MOP.
a. Flat owners can login to My HDBPage with their Singpass to check if they have met their flat’s MOP. Please note that the information on whether MOP has been met could change if flat owners are no longer eligible to retain the HDB flat.
Even if the flat was purchased by the flat owner as a single, their spouse (upon marriage) will be obligated to abide by the MOP rules together (i.e. the spouse cannot acquire an interest in a private property during the flat’s MOP).
a. Under the terms and conditions for purchase of resale flat in HDB InfoWEB, Clause 29.5(i) states that the owner must inform HDB of any changes in the household, including changes in the marital status.
b. Nevertheless, a married couple is considered a single family unit. Upon marriage, the spouse is considered an essential occupier of the flat. Even though the flat owner does not inform HDB of the change in his marital status, his spouse is also required to comply with HDB’s rule as mentioned in Clause 28.5 (c) of the T&C.*
Acquiring private residential property to hold on trust for another person is also not allowed.
* HDB issues a set of Terms & Conditions (T&Cs) to flat applicants at the point of purchase. Clause 28.5(c) of the T&Cs states that “the buyer, his spouse, and other essential family members cannot invest in private residential property, in Singapore or overseas, during the 5-year Minimum Occupation Period (MOP) of the flat”.
For details on HDB’s MOP rules, please visit HDB's website.
Information accurate as at 25 July 2024