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.