A Flat Owner’s Guide to HDB’s Minimum Occupancy Period

A Flat Owner’s Guide to HDB’s Minimum Occupancy Period

Last year, there were 22,477 resale flat transactions and nearly 20 percent of these transactions (4,578 units) involved newer flats in Singapore. It has been the highest volume of newer flat sales in almost a decade. It was only five years ago when newly-made flats made up less than eight percent of resale deals.

Most of these sales normally come from owners who have reached their Minimum Occupation Period (MOP) of five years. They tend to sell upon MOP, or slightly over, to upgrade into a private condo. While it’s not an unusual approach, what’s essential is the number of flat owners who are quick to do it these days.

 

What is the HDB Minimum Occupation Period? 

In order to successfully put your flat on sale, you must first fulfill a set of eligibility conditions. One of them is the Minimum Occupancy Period or MOP. It is the period of time that you are required to physically occupy your flat before you can actually sell it on the open market. It is calculated from the date you get the keys to your place and excludes the time when you do not stay in the place.

Its duration usually depends on the mode of purchase, the flat type, and the date of the flat application. Below is a guide from the Housing & Development Board:

Purchase Mode MOP
Flats purchased from HDB 5 years
Design, Build and Sell Scheme (DBSS) or flat bought from a developer 5 years
Flat bought under the Selective En bloc Redevelopment Scheme (SERS) with portable SERS rehousing benefits 5 years
Flat bought under the Selective En bloc Redevelopment Scheme (SERS) Whichever is earlier: either 7 years from the date of selection of the replacement flat; or 5 years from the date of occupation
Resale flat bought from the open market with the CPF Housing Grant 5 years
Flats bought under the Fresh  Start Housing Scheme 20 years

 

What you can’t do during the MOP

As advised, you are not permitted to list your flat on the market for purchasing while on HDB MOP.  It’s understood that it is not limited to selling your flat, either.

During the MOP timeframe, you cannot rent out your whole flat or purchase any form of private property.  But as long as you live in your place and stay in at least one bedroom, you can rent out rooms so long they are much bigger. 

As with any normal rental HDB setup, the rules for tenants must be followed. They must have valid work or student passes, for example, and the minimum lease of six months applies.

Remember that you cannot lock one room up, and rent out the flat claiming you have not rented its entirety. This practice is illegal and the penalty for breaking the laws under it can be the confiscation of your flat. 

To prevent overcrowding, the number of tenants you can have in your HDB rental is limited by your flat type. Please note that 1- and 2-room HDB for rental flats can only be rented out whole — individual bedrooms of 1- and 2-room flats cannot be rented out, according to gov.sg.

Flat type Total number of occupants*
1-room 4 persons
2-room 4 persons
3-room 6 persons
4-room 6 persons
5-room 6 persons
Executive 6 persons

*For room renting out cases, the total number of occupants includes the flat owner, authorised occupants and tenants.

 

Exceptions

Selling your flat back to HDB before the MOP is possible should you meet certain special conditions, although whether or not you will be successful depends on your specific case. Listed below are the conditions that may be considered:

1. Bankruptcy

If you can avoid bankruptcy by selling your flat and downgrading to a cheaper one, HDB might allow you to do so. Keep in mind that should none of the HDB flat owners be Singapore citizens, they will be required to obtain the consent of the Official Assignee prior to selling the flat. If any of the flat owners are Singapore Citizens, the consent of the Official Assignee is not required.

2. Divorce

This tends to form the majority of the reasons for needing to put the flat on sale before the MOP. Both you and your partner will be granted to sell the house and then divide the proceeds. Should you go through a divorce after meeting the MOP, you’ll need to provide a Writ for Judicial Separation previously known as Deed of Separation), or Interim Judgment (previously known as Decree Nisi) and Certificate of Making Interim Judgment Final (previously known as Decree Nisi Absolute) and Order of Court. For Muslims, a Divorce Certificate is needed.

3. The inability to pay the home loan.

In situations where the sole provider of the family is unable to earn money due to death or disability, HDB could consider and allow families to sell their flats prematurely.

4. Terminal illness. 

Depending on the case, the HDB may grant this exception upon a close review.

5. Loss or renouncement of citizenship.

If you are planning to move overseas for good, the HDB may allow you to sell your property early. You’ll also be able to get your CPF money back.

 

What happens after reaching the MOP?

Upon reaching the MOP, you can:

  1. Sell your property. While this is the most common action, understand that more and more HDB flats are also coming into the market. Thus, there may be more competing units entering. Rest assured, if you consider not taking it as a rush, it would be better. 
  2. Now that you have reached the goal, you can finally rent your flat out. However, remember that you can only do this if you are a Singapore citizen. Permanent residents can only rent out rooms, not the whole place.
  3. You can also purchase another HDB. Taking a second HDB loan and buy another flat immediately, instead of waiting for the sales proceeds from your previous flat can easily be an option.
  4. After the MOP is up, you can choose to try upgrading your property as well.  This is usually thought to be more convenient, as it eliminates the need for temporary accommodations. It can help in investing if you still seek to sell the property in the future.

It is advised that before you can sell your flat, you have to verify if you meet the Ethnic Integration Policy and the Singapore Permanent Resident Quota, The EIP ensures a balanced ethnic mix in HDB estates, thereby helping to promote racial integration and harmony. 

Meanwhile, the SPR quota guarantees that SPR families can better integrate into the local community. It can be noted that Malaysians are excluded from this because of their close cultural and historical similarities with Singaporeans. After you have registered your Intent to Sell, you can easily look over the EIP/SPR quota of your flat on HDB’s Resale Portal. 

 

How to check your MOP?

To check whether you have met the MOP, you can log in to My HDBPage with your SingPass. You can easily access the data under My Flat > Purchased Flat > Flat Details > Minimum Occupation Period (MOP).

Whether you’ve found a nicer place to live or you are in urgent need of cash, Loan Advisor will assist you in choosing the ideals for your financial needs. For more guides like this, trust your one-stop comparison portal.

Leave a Reply