HDB caught 150 apartment owners between 2018 and 2022 for investing in private properties even though they lived in their flats for less that five years.
Estate agents either misled or ignorantly told many that trust schemes did not have restrictions on purchases, since the purchasers were not buying properties for themselves.
In one case, a couple that had only lived in an HDB apartment for three years wanted invest in a home for private use even though it was not permitted for two more years.
Their estate agent told them that they could purchase the additional property and put it in trust for their child. They were also convinced that the HDB rules would not be broken because the child was the beneficial owner.
The couple didn’t know they had been given inaccurate information because HDB regulations state that an owner still under MOP can’t buy a private home even if the property is being held on trust for someone else.
Unaware of the situation, the couple bought a condo unit. The developer had also employed another agent, so the agent received $7,000 or half the commission.
The HDB informed the couple in February 2020 that they were in violation of MOP rules for buying a private house within the period of prohibition and they could be fined or have their apartment seized by HDB.
The Landmark Singapore MCC Land
They were ultimately ordered to pay $45,000 in penalties, which was paid as a lump-sum with a cashier’s order.
The agent was found guilty for failing to carry out his work and conduct business with due diligence when he incorrectly told the couple they could purchase the extra house on trust for their son during the MOP of the flat.
The judge ordered him to pay $10,000 as a penalty and legal fees.
Websites of the respective agencies provide information on HDB flats, including the stamp duty payable when investing in property.
It is important that all owners check the rules before dealing with an asset of value. This will ensure they do not become ignorant or fall victim to agents who haven’t done their homework.
These cases demonstrate that you could end up paying a heavy price if caught doing something you could have avoided if only you checked yourself.