Breaches of HDB's Minimum Occupation Period (MOP) Rule and Steps to Ensure Flats are Owner-occupied during MOP

Mr Yip Hon Weng asked the Minister for National Development (a) whether HDB will consider more effective ways of detecting BTO units that are not owner-occupied for the full five-year MOP in addition to relying on public feedback and whistle-blowers; and (b) whether HDB and the Council for Estate Agencies can work together and take enforcement action against property agents who assist such owners in selling their flats.

Miss Cheryl Chan Wei Ling asked the Minister for National Development (a) from 2017 to 2022, how many breaches of the MOP have been uncovered by HDB versus leads reported by the public; and (b) how does HDB decide on the flats to inspect monthly to detect violations on housing rules.

Mr Ang Wei Neng asked the Minister for National Development (a) for the past 10 years, how many HDB flat owners are caught for (i) not staying in the HDB flat and (ii) for renting out the entire HDB flat during the MOP; (b) what is HDB's methodology of detecting such violations during the MOP; and (c) whether HDB has plans to improve its detection rate.

Mr Saktiandi Supaat asked the Minister for National Development (a) of the 53 cases between 2017 and November 2022 where enforcement action has been taken by HDB for breaching MOP rules, how many cases are detected by (i) HDB's periodic inspections (ii) whistle-blowing through HDB's hotline and (iii) any other method; and (b) whether the Government will consider shifting some of the onus of reporting such breaches to real estate agents when suspicious circumstances come to their knowledge.

Mr Desmond Choo asked the Minister for National Development (a) from 2018 to 2022, how many HDB owners have breached the rule regarding the MOP; (b) how does the Ministry deal with these errant owners; (c) what are the circumstances in which these breaches are discovered; and (d) how will the Ministry continue to stay proactively vigilant against such breaches.

Assoc Prof Jamus Jerome Lim asked the Minister for National Development whether HDB has considered (i) working with utilities companies to track utilities usage during the MOP, as an indicator of non-occupancy, in addition to the current reliance on sampling resale listings on property sites and (ii) requesting property sales sites to monitor and remove listings of properties that have been determined to have not fulfilled the physical occupancy requirements under the terms of the MOP.

Mr Murali Pillai asked the Minister for National Development as part of the system to check if owners of HDB BTO flats physically occupy their units for residential purposes during the MOP, whether HDB will verify if these owners have updated their places of residence to reflect the addresses of their respective BTO units under section 10(1) of the National Registration Act 1965.

Mr Zhulkarnain Abdul Rahim asked the Minister for National Development what additional steps are to be taken to prevent the flouting of minimum occupation rules of HDB BTO flats.

Thank you, Sir. Mr Speaker, my response will also cover the matters raised in the questions by Mr Gan Thiam Poh and Mr Gerald Giam, which are scheduled for a subsequent Sitting. I invite Members to ask clarifications if need be. If the questions have been addressed, it may not be necessary to proceed with these Questions at future Sittings.

The Housing and Development Board (HDB) flats are primarily meant for owner-occupation. Owners are required to physically occupy their flat during the Minimum Occupation Period (MOP), before they are allowed to sell their flat on the open market or rent out the whole flat. During the MOP, owners are not allowed to leave the flat vacant, or rent out the whole flat without staying in it – this also means that owners are not allowed to rent out their whole flat under the guise of renting out only the bedrooms, for instance, by locking up one room and not actually living in it. To be clear, this also applies to Executive Condominiums, or ECs.

All buyers of HDB flats are required to acknowledge HDB's rules and regulations, including those relating to the MOP, at various points of their flat purchase process. Furthermore, the relevant rules and regulations are readily available on the HDB InfoWEB. Flat owners would, therefore, know that they are not allowed to leave their flat vacant, or rent out the whole flat without staying in it during the MOP.

The MOP policy safeguards HDB flats for households with genuine housing needs. It also helps, in part, to deter the speculative purchase of HDB flats to keep HDB flats affordable. Nevertheless, we recognised that flat owners' circumstances may change over time. Some may aspire to own a bigger flat or private residential property as their financial situation improves or as their family size grow, while others may wish to right-size, or to move closer to their parents or children for mutual care and support. In short, changes in life stages. The current five-year MOP seeks to strike a balance: on the one hand reinforcing the objective of owner occupation, while on the other hand not unduly hampering those who want to move when their family circumstances or life needs change.

Flat owners who face genuine circumstances and cannot stay in their HDB flat during the MOP, such as those who may be posted overseas for work for a period, should write in to HDB to seek waiver of the MOP rule. HDB will assess such appeals on a case-by-case basis.

Where appropriate, we have made the MOP longer to strengthen the owner-occupation intent of our public housing. For instance, the MOP for flats launched under the Prime Location Public Housing (PLH) model is set at 10 years. And rental flat tenants who get additional support under the Fresh Start Housing Scheme to buy a new HDB flat have to meet a 20-year MOP.

During "Our Housing Conversations" held under the auspices of Forward Singapore (ForwardSG), we had received a whole range of suggestions to strengthen the owner-occupation intent of public housing. For instance, some suggested increasing the MOP for all flat types while others responded to say that five years is just about right, given how life stages change. Other participants suggested carving out popular BTO projects, such as those in well sought-after locations or in areas with very favourable attributes, such as close proximity to amenities, and imposing tighter HDB ownership conditions – such as longer MOPs – to further deter speculative intent. And yet, there are other participants who suggested tiered MOPs – for applicants at the same income level, those who accept longer MOPs can get more subsidies and those with shorter MOPs get much lesser subsidies and pay for BTO flats closer to market price.

These are just a sampling of the ideas given, we are studying the very many views carefully and will continue to review our housing policies to meet the needs of Singaporeans.

Owners who are unable to fulfil their MOP due to changes in their circumstances will need to return their flat to HDB. Between January 2017 and December 2022, a total of 258 BTO flats and 168 resale flats have been returned to HDB, mostly due to changes in owners' circumstances within the MOP, which rendered them ineligible to own an HDB flat. Circumstances include divorce or separation, demise of an owner, medical reasons and so on. As these owners had not fulfilled their MOP, they were not allowed to sell their flat on the open market. But of course, appeals can be made and cases will be looked at on a case-by-case basis.

HDB detects potential infringement of HDB rules and regulations through a range of methods, including regular inspection of HDB units, feedback from members of public and property agents, as well as the use of data analytics and other tools. Members of this House have also given a whole list of suggestions and I thank them for that. Some of these involve confidential investigative methods and I shall not go into the details.

Sir, in detecting and investigating infringements, HDB tries to strike a balance – on the one hand, we want to ensure that HDB rules are complied with by detecting and deterring errant owners who infringe these rules; on the other hand, we do not want to overly impinge upon the privacy of the 1.1 million HDB home owners, the vast majority of whom abide by the rules.

On regular inspections, HDB conducts 500 inspections randomly each month to detect infringements of HDB rules and regulations, such as unauthorised renting out or subletting and non-occupation of flat. Since 2017, HDB has inspected some 35,000 homes to conduct random checks.

HDB also investigates feedback received from members of public and property agents on suspected cases of HDB rule infringements, such as flats being listed for resale in bare or so called "brand new" condition. Between 2017 and 2022, HDB received around 4,700 pieces of feedback on potential infringement relating to HDB's MOP rules.

In addition, as part of the HDB resale process, HDB also conducts inspection on all HDB flats involved in a resale transaction. Flats that have been found to be in bare or "brand new" condition will be flagged for further checks.

HDB receives information about suspected cases of infringement across all flat types – one Member asked if there was any particular flat type with a greater propensity, in fact, it is across all. Should any infringement be established, action will be taken, and the resale transaction will not be allowed to proceed.

HDB takes the violation of its rules and regulations seriously and will not hesitate to take enforcement action against errant owners. Depending on the severity of the infringement, HDB may issue a written warning, impose a financial penalty of up to $50,000, or compulsorily acquire the flat. From January 2017 to November 2022, HDB had taken action against 53 owners who had not occupied their flats. Of these 53, 21 have had their flats compulsorily acquired due to MOP infringement. Owners whose flats are compulsorily acquired by HDB in this manner will also face other consequences. For instance, they will be debarred from purchasing subsidised flats in future or taking over such flats by way of change in ownership, among others.

Property agents who perform estate agency work, too, have a role to play in helping to ensure that HDB's rules and regulations are not breached. Property agents are required to comply with the Estate Agents Act and its Regulations, including the Code of Ethics and Professional Client Care (CEPCC). Under the Code, property agents need to perform due diligence in the course of carrying out estate agency work to ensure that no law, including those that apply to HDB properties, has been infringed.

If a property agent has reasonable cause to suspect that HDB MOP rules have been infringed, he should inform his client of the potential consequences and stop marketing the client's property. The Council for Estate Agencies (CEA) has taken disciplinary action against agents who have been found to have breached CEA's regulations in assisting such owners to sell or rent out their flats.

Between 2017 and 2022, CEA investigated 51 cases involving 69 property agents who had assisted their clients to market HDB flats which might not have met MOP rules. Investigations into 32 cases have been completed and CEA took disciplinary action against 18 property agents who were found to have breached the Code. Six agents have had their registration suspended for between seven and 48 weeks, and received financial penalties ranging from $2,000 to $5,000 imposed by CEA's disciplinary committee. Two property agents were issued Letters of Censure (LOC), one of whom was also imposed with a financial penalty of $1,000. The remaining 10 agents were issued with warning letters for their disciplinary breaches. The remaining 19 cases are still under investigation.

HDB and CEA will continue to work closely to investigate cases involving HDB owners who sell or rent out their flats during MOP, and CEA will continue to review the adequacy of the actions taken against errant agents.

We thank Members who have provided suggestions on how to better detect and deter errant owners. We also recognised the concern by members of public, sometimes anger, when they see such actions being taken by people around them, when they and many other HDB owners comply fully with the rules and are concerned about whether the playing field is level. They see public housing as, first, a home, while recognising that people do have changes in their life course, and also do want to upgrade as their circumstances and financial situations improves and have, therefore, been forthcoming in giving us information when they come across suspected breaches of rules. HDB will investigate such cases and continue to take firm action against infringement of HDB rules and regulations. Members of the public can continue to report cases to HDB via the toll-free hotline at 1800-555-6370, or via email.

I thank the Minister for his response. Are the current penalties of $50,000 fines and written warnings sufficient to deter the sale of such vacant flats? Will the Ministry and HDB consider increasing penalties for such cases and even consider the debarment over a longer period of time?

I thank the Member. Let us continue to review this. Currently, the letter of warning and financial penalties of up to $50,000 and compulsory acquisition of the flat – these are serious consequences. So, in deciding whether to enhance them or increase them, let us consider the impact of these measures, the impact of greater awareness about these rules among Singaporeans at large – greater detection and reporting and action taken, before we move further.

Thank you, Mr Speaker. Minister, just to add on to Member Yip Hon Weng's suggestion on enforcement. May I ask two supplementary questions in respect of the breaches. There were 21 cases, for which compulsory acquisition of the flats were meted out. May I ask what are the types of – or the extent of the breaches egregious enough to warrant such compulsory acquisition?

Second, I would echo Member Yip Hon Weng's suggestion, but I would suggest possibly to add on to the options available to HDB – whether HDB would consider profit disgorgement, especially for owners or errant owners or agents who have profited from the flouting of such MOP breaches.

I thank the Member. For compulsory acquisition – or for that matter, financial penalty when we take action – these tend to be egregious cases. The buyers balloted for a home, it is subsidised, they got it ahead of everybody else, but they did not live in their home and there are no good reasons for doing so. We recognise that people have got a whole range of life circumstances, but for some of these cases where we take firm action, it is quite clear from the evidence – from interviews, from investigation – that they either had no intention to live in those homes or felt that actually, they could get away with it – to live somewhere else, leave the place empty and then, when the MOP is up, sell it and gain the upside from it.

As for the Member's suggestion of profit disgorgement, financial penalty is also quite high. It does, to some extent, disgorge a lot of the profit, especially when it is illegal subletting. But I take the Member's point as part of the broader review.

Thank you, Speaker. What are the main reasons given by these owners who are caught not staying in these flats and if this set of information is useful from preventing this group of potential infringers from applying flats that they do not need, going forward?

I do not have a breakdown of all the reasons that are given in the course of the interviews. What is established before we take action is that they have got the subsidised flat, they got public housing that is not occupied, it is not lived in by the people who bought those flats. And we look at the reasons they give and where there is no good reason, we take firm action.

Mr Speaker, I appreciate that Minister Lee had a great many Parliamentary Questions to follow up on, but I do not quite think that my specific ones were answered. Just to reiterate, it was about technological solutions, whether HDB explored some of these, in particular, whether they would track utilities usage or if they would request property sale sites to monitor and subsequently remove errant listings. The general point is whether there are automated mechanisms to flag some of these before subsequent investigations into potential violations are made.

I thank the Member and I thank him for his patience because it was a long reply. The response to the questions is in paragraphs 9 and 20. In essence, we have said that HDB detects potential infringements of HDB rules and regulations through a wide range of methods, including regular inspections, random and otherwise; feedback from members of the public and property agents; as well as the use of data analytics and other tools. And because some of these involve confidential investigative methods, we would not go into the details.

At paragraph 20, I did thank Members for the whole range of ideas given. Some suggested looking at whether people change their National Registration Identity Card (NRIC) after buying this home, some suggested looking at utility meters, some suggested looking at season parking, renovation permits – a whole sort of proposals raised. I have said that we will adopt the whole range of measures, but we also want to strike a balance, make sure that the rules are enforced – not just enforcement but detection in the first place – at the same time, making sure we do not overly impinge upon the privacy of 1.1 million home owners, the majority of whom actually play by the rules.

Thank you, Mr Speaker. I would like to ask two supplementary questions to the Minister. First, in relation to his reply earlier about HDB working with the CEA, given the numbers that he shared earlier – about 60-plus errant cases being investigated – what are the follow-up steps that HDB is working with CEA to follow up on the ecosystem? The data encompasses five years, which means that whether the trend has been increasing or falling, I am not sure. So, follow up with the ecosystem to enhance the ethics, and whether the Codes of practices amongst the property agents can be further built on?

Second, in relation to my Parliamentary Question, I may have missed the Minister's answer. Can the Minister highlight if the cases are detected, as per my Parliamentary Question – whether they were detected by periodic inspections, whistle-blowing by property agents or other methods?

I thank the Member. On the second question, I will address it straightaway – it is a mix. Some cases are a result of whistle-blowing, some are a result of technological or data methods, some are a result of random inspections. So, it is really a mix of them. Sometimes, more than one tool is deployed in order to zoom in. There are a lot of flats, a lot of homes; 1.1 million flats owned and more than 50,000 rental flats. So, it is a range and a combination.

On the first question about the number of complaints against agents who are suspected of having assisted in the breach of such rules, including MOP rules, which have increased over the last few years, from about three per year to about 20 per year. So, we are concerned about this and will continue to have HDB and CEA work closely together to ensure that the understanding of the foundation of a lot of these rules relating to property and real estate are underscored by our sector.