Overview of the Resale Process

Transcription

1 Code of Ethics and Professional Client Care HDB Resale Policies & Procedures Affecting Sellers Estate Agency Work Reference for Salespersons Para 4(2)(e) states that: Salesperson must not undertake estate agency work in respect of Housing and Development Board flats unless they are fully conversant and comply with the applicable laws, regulations, rules and procedures that apply to transactions involving such flats. Agenda Overview of the Resale Process Resale Checklist & Cooling-off Period Standard Option to Purchase Resale Application Procedure 1 st Appointment Overview of the Resale Process 2 nd Appointment (Resale Completion) HDB e-services 1

2 SELLERS Complete Resale Checklist Check Eligibility to Sell Arrange Alternative Housing Negotiate Resale Price Sellers grant OTP to Buyer Buyers exercise OTP within Option Period Submit Resale Application to HDB BUYERS Complete Resale Checklist Check Eligibility to Buy Obtain HLE Letter or Bank Letter of Offer Role of the Salesperson Engaged by Sellers Advise Sellers on resale policies & procedures Guide Sellers through the resale process Assist Sellers to submit forms & documents Market the Flat Attend 1 st Appointment at HDB Look for Suitable Flat Attend1 st Appointment & Completion Appointment with Sellers Attend Completion Appointment at HDB Resale Office or Solicitor s Office Salesperson Engaged by Sellers Go through Resale Checklist with Sellers Advise Sellers to arrange for alternative housing Deposit soft copy of Resale Checklist in the Resale Checklist Repository by the next day Ensure Sellers observe 7-day cooling-off period before granting Option to Purchase Sign as Sellers Witness in OTP & Application Forms Resale Checklist & Cooling-off Period Submit Resale Application for Sellers Execute Estate Agent s Statutory Declaration 2

3 Rationale for the Resale Checklist To ensure that Sellers are awareof key resale & financing policies & proceduresbefore selling their flatsin the resale market. 7-Day Cooling-Off Period for Sellers Objective: Ensure Sellers make informed decisions before committing to sell their flats Sellers can only grant Option to Purchase (OTP) at least 7 days aftercompleting Resale Checklist. Example: If Resale Checklist is dated 1 st October, then the earliest OTP can be granted is 8 th October. Resale Checklist for Sellers Sellers need to state next housing address Ask the Sellers: On the day of resale completion, where will you be staying? If Sellers are buying another flat, work out: Estimated Sales Proceeds of current flat Resale Financial Plan for next purchase Use Sale Proceeds Calculator & Resale Financial Plan Calculatorin HDB InfoWeb( Salesperson to complete & sign Salesperson to go through & explain all items to Sellers Sellers to complete & sign Unique Unique Serial No. to each checklist Salesperson to help in financial calculations Sellers to state address of next housing 3

4 PENALTIES FOR INFRINGEMENT CASE STUDY Salesperson A had an immediately offer from direct buyers and realized that he had not gone through the Resale Checklist with the sellers. He had assured the sellers that it is not wrong to issue OTP and postdating all the dates therein. Get the sellers to issue OTP to Buyers on the same day he deposits the checklist. Buyers backs out and found a loop hole to get back his $1,000 deposit. Resale Checklist Repository Resale Checklist Repository Important Notes All resale flat Sellers are required to go through the Resale Checklist when they decide to sell their flat. The Sellers must submit a scanned copyof the completed Resale Checklist in this Repository by the next day after they have gone through the Checklist. Sellers who are planning to buy another HDB flat (new or resale) are also required to do their Estimated Sale Proceedsand Financial Plan calculations. The calculationsare to be submitted to HDB together with the Resale Checklist 4

5 Resale Checklist Repository During the Resale First Appointment, Sellers have to produce the original copy of the Resale Checklist, Estimated Sale Proceedsand Financial Plan calculations(if applicable) deposited in the Repository for verification. The Serial No. on the Resale Checklist is unique and each copy can only be used once. Each file attachmentmust be < 1.0 MBand in PDF, JPG, GIF or PNG file format. If there are more than one file attachment, the total file attachmentsmust be < 2.0 MB. Resale Checklist Repository The Resale Checklist will be kept in the Repository for 6 monthsfrom the date the sellers go through the Checklist. If the Sellers are unable to find a buyerand submit his resale application within the 6 month period, the Sellers will have to go through the Checklist againand deposit the new copy in the Repository. Salesperson s Particulars Sellers Particulars 5

6 If Sellers buying another HDB flat, attach Estimated Sales Proceeds & Financial Plan Attach soft copy of Resale Checklist Minimum Occupation Period (MOP) Minimum Occupation Period HDB flat owners must have physically occupiedtheir flats for a period of time, referred to as Minimum Occupation Period (MOP), before they are eligible to sell it in the open market. If the flat owners have rented out their entire flat, the period of subletting will not be included in the computation of the MOP. Type Direct Purchase, BTO, DBSS & Resale Flats (using CPF Housing Grant) SERS Replacement Flat (purchased with portable re-housing benefit) SERS Replacement Flat (not purchased with portable re-housing benefits) MinimumOccupation Period (MOP) 5 Years (from effective date of purchase) 5 Years (from effective date of purchase of replacement flat) 7 years (from the date of selection of the replacement flat, provided they had taken possession of the replacement flat) or 5 years (from the effective date of purchase of the replacement flat) 6

7 Resale Application Received Date Before 5 March 2010 (includes owners owning their resale flat as at this date) Resale Flats (bought without CPF Housing Grant) Minimum Occupation Period (MOP) 2½ yearsfrom effective date of resale if the owner takes a loan from HDB 1 yearfrom the effective date of resale if: Resale Application Received Date Resale Flats (bought without CPF Housing Grant) Minimum Occupation Period (MOP) 5 March August years (from effective date of resale, regardless of the type of loan taken by the owners or loan status) i. the owner has not taken a loan from HDB; or ii. he has taken a loan from the bank/financial institution to finance the purchase On or after 30 August years (from effective date of resale, regardless of the type of loan taken by the owners or loan status) HDB e-service Sellers can apply online (using HDB e-service) for confirmation of Minimum Occupation Period 7

8 HDB will send the letter to the flat owner s address Standard Option to Purchase HDB Standard Option to Purchase Sellers & Buyers of HDB resale flats must use the HDB standard Option to Purchase as the contract for resale transactions. HDB OTP can be downloaded from HDB website ( FlatOptiontoPurchase) The Option to Purchase provides Buyers a window period of 14 days to consider their intended purchase before committing to a binding contract with the Sellers. 8

9 Important Notes: Sellers must have met the Minimum Occupation Period (MOP) beforegranting Option to Purchase (OTP) to Buyers Buyers must have HDB Loan Eligibility (HLE) Letter or Bank s Letter of Offer (LO) before exercising OTP Sellers & Buyers are to be aware of liability (if any) to pay flat/estate upgrading cost (Clause 10) Sellers & Buyers to sign only English version of OTP Advisable to prepare Inventory List (OTP Page 9) No supplemental agreements or amendments to OTP clauses Granting the Option Sellers grant OTP to Buyers Buyers pay Option Fee ($1,000/-maximum)in exchangefor the exclusive right to consider offer to buy the flatwithin the 14-day Option Period During the Option Period: Sellers cannot make offers to other Buyers Buyers must secure a valid HDB HLE Letter or Bank Letter of Offer Buyers to think through the purchase decision Points on Granting Option Sellers are committed to sell once OTP is granted Salesperson must ensure that OTP is only issued 7 days after Resale Checklist is done Sellers can apply online for confirmation of MOP Correct informationon the resale price & other details as agreed by the Sellers & Buyers must be given in the OTP Buyers have 14 days to sign the OTP Original OTP & Buyers copyto be handed to Buyers Sellers retain the Sellers copy 14-Day Option Period State ACTUAL PRICE as agreed by Sellers & Buyers NOT Valuation + COV Option Fee $1,000/- Max Unique Serial Nbr 9

10 Prescribed Fees & Option Period Option Fee Deposit $1,000/- maximum Cannot be $0 Option Fee + Option Exercise Fee $5,000/- maximum Sellers must meet MOP as at date of granting OTP, otherwise OTP is VOID If Option Fee is $1,000/-, then Option Exercise Fee is $4,000/- max Option Period 14 Days, after Option Date (OptionDate + 14 Days) Option Expiry Time is 4.00pm Both Sellers & Buyers online resale application for 1 st appointment must be completed within this timeframe. Must be SIGNED by ALL SELLERS Must be SAME as Page 1 Witness must be above 21 years old & cannot be the Seller or Buyer 10

11 If Buyers Are Not Buying If Buyers do not want to proceedwith the purchase: they can let the OTP lapse& lose only the Option Fee. If Buyers Are Buying They need to exercise the OTP before 4pmon the Option Expiry Date by: Signing the Acceptance Portion of the OTP; Delivering the signed OTP(original copy) to Sellers or authorized recipient (Form A on Page 10); & Paying Option Exercise Fee* to Sellers *Option Exercise Fee + Option Fee = Deposit $5,000 max Upon exercise of OTP, the Sellers & Buyers have entered into a binding contractfor the sale & purchase of the HDB flat Points on Exercising Option Buyers have 14 days to exercise Option Salesperson to ensure that the Buyers Resale Checklist is done before Buyers exercise Option Date of HLE Letteror Bank s Letter of Offermust be beforethe date of signing the Acceptancein the OTP. Be mindful of relevant policies: e.g. Ethnic Integration Policy, payment for upgrading, etc. Original OTPto be submitted to HDBat 1 st Appointment Sellers & Buyers keep copiesof the OTP Must be dated before Option Expiry Date (refer to Page 1) Witness must be above 21 years old & cannot be the Seller or Buyer Acceptance Portion MUST BE SIGNED by ALL BUYERS 11

12 Resale Application Procedure Submitting Resale Application Ensure resale application is submitted within agreed timeframe(otp Clause 11) At time of submission, ensure compliance with relevant policies, e.g.: Ethnic Integration Policy (EIP); SPR Quota, Valuation Report is Valid Ensure correct informationis provided in the resale application & other forms Salesperson to execute Estate Agent s Statutory Declaration Ethnic Integration Policy (EIP) The Ethnic Integration Policy (EIP) is implemented to promote racial integration and harmony The policy also aims to prevent the formation of racial enclaves by ensuring a balanced ethnic mix among the various ethnic communities living in public housing estates SPR Quota For resale applications received on or after 5 March 2010, Singapore Permanent Resident (SPR) families buying a resale flat will have to meet the SPR quota, in addition to the Ethnic Integration Policy (EIP). The SPR quota ensures that SPR families can integrate into the local community for social cohesionand to prevent enclaves forming in the public housing estates. The quota will only apply on non-malaysian SPRs. Malaysians are excluded because of our close historical and cultural links. 12

13 SPR Quota Definition of Non-Malaysian SPR Households A non-malaysian SPR household is one with no Singapore Citizen or Malaysian-SPR buyers (i.e. where all SPR buyers are non-malaysians). A non-malaysian SPR household buyer must satisfy both the ethnic proportion and SPR Quota to qualify to buy a resale HDB flat. How EIP and SPR Quota work When the ethnic proportion or SPR quota or both have reached the block/neighbourhoodlimit, buyer will not be allowed to buy a flat which will lead to an increase in that ethnic proportion and/or SPR quota. How EIP and SPR Quota work There is no restriction on the sale and purchase of an HDB flat if: The proportion of the buyer's ethnic group/spr Quota is within the prescribed block and neighbourhoodlimits If the buyer and seller are of the same ethnic group or citizenship 13

14 Submission Process Online submission of resale applications via ResaleNet or e-resale Separate submission of Sellers & Buyers portion of Resale Application Important Note Buyers and sellers (or their salespersons) will have to submit their respective portions of the resale application separately. A resale application is deemed complete only when HDB receives both portions of the resale application. Buyers and sellers should ensure that they meet all the prevailing eligibility conditions and resale requirements on the date the second party submits his portion of the resale application. Sellers Submission Separate Online Submission of Resale Application Via ResaleNet or e-resale Within 7 days Buyers Submission Booking of 1 st Appointment by 2 nd Party HDB registers resale application upon receipt of both sides submission. (EIP, SPR Quota & Valuation Report must be valid at this date) Separate Submission Either Sellers or Buyers can submit first 2 nd party must submit within 7 daysof 1 st party Both portions must be submitted within the agreed timeframe as per OTP Clause 11 Only 2 nd party can book 1 st Appointment Eligibility assessmentis based on date of submission of complete applicationby both parties (i.e. EIP, SPR Quota, etc) 14

15 Using HDB e-service to Check Available Dates for Resale 1 st Appointment 15

16 Booking of 1 st Appointment Salespersons need to: Ensurethat Sellers & Buyers agree on the date before booking the First Appointment Advisethe parties to give written consent for any change of appointment Only the Sellers & Buyers can login to their own MyHDBPage to make the change after they have received the First Appointment letter 1 st Appointment & Resale Completion 16

17 APPLICATION Enter Option to Purchase Sellers grants Option to Buyers Buyers exercise OTP within Option Period Submit Resale Application via ResaleNet(by agencies) via e-resale (for DIY cases & agencies w/o ResaleNet) Process Application Check eligibility Fix 1 st Appointment date Arrange flat inspection Resale Procedure 1 ST APPOINTMENT 6-8 weeks Interview with Resale Officer Arrange Completion Date Confirm Solicitor Confirm Financial Plan Withdraw Buyers CPF Sign Documents Explain Completion Verify Documents COMPLETION Resale Approval Prepare Completion Interview on Completion Date Outstanding matters Sign transfer Handover keys Collect Sales Proceeds 1-2 weeks Refund Sellers CPF 1 st Appointment Bring documents stated in appointment letter (requirements for spouse consent, power of attorney, divorce case, estate case, CPF Housing Grant, etc) Submit original OTP, Resale Checklists & Estate Agent s Statutory Declaration Sellers & Buyers to decide on completion date & their solicitors HDB Resale officer interviews Sellers & Buyers Must declare TRUE RESALE PRICE Gone Through RESALE CHECKLIST with Sellers NO OTHER AGREEMENTS PENALTIES for FALSE DECLARATION Resale Completion Settle outstanding paymentsbefore completion (service & conservancy, property tax, upgrading payments, etc) Rectification of unauthorized renovations Final inspectionof flat by the Buyers Refundof Sellers CPF 17

18 Centralized Map Services Enquiry on EIP & SPR Quota Resale Flat Prices HDB e-services Sales Proceeds Calculator HDB e-services Legal Fees Enquiry Dates for 1 st Appointment Resale Financial Plan CPF Grant Distance Enquiry e-resale Upgrading Status 18

19 Enhanced Contra Facility (ECF) The Enhanced Contra Facility (ECF) enables you to sell your existing HDB flat and at the same time buy another resale HDB flat using the sale proceeds and the refunded CPF monies. The ECF is jointly implemented by the Central Provident Fund (CPF) Board and the Housing & Development Board (HDB). Enhanced Contra Facility (ECF) With the ECF, the cash outlay and the mortgage loanrequired will be reduced. Your monthly loan repayment will also be reduced. However, the CPF refund cannot be used for the payment of stamp and conveyancing fees. Terms and Conditions for ECF Only the party who is selling and buying may apply for ECF to finance the purchase of flat B, including insurance payments under the HPS. Bothhisbuyerofhisflatnorthesellersofhisnextflat mustnotapplyforecf. The party must not be an undischarged bankrupt or any pending bankruptcy proceedings. Where either or both the selling or buying flats is financed by a bank and/or CPF Mortgage/charge, or where private solicitors are used, HDB has the right not to approve the application for ECF Terms and Conditions for ECF Not available for Conversion Scheme, for sale of part-shareofan existingflat,orifthecontraparty buys another resale flat with a bank loan, or any otherschemesasmaybedecidedbyhdb. Both resale applications have to be submitted together. Approval of resale of both flats does not constitute approval for ECF. 19

20 Enhanced Contra Facility (ECF) Resale of selling flat A must be completed before buying flat B. Both can be on the same day. Use of CPF Monies or cash from Sale of Flat A Monies from proceeds of Flat A may be used to pay for part or full amount of Flat B only after, a) all money in the CPF OA account has be used, and b) All CPF monies to be refunded to his CPF Ordinary account from the sale of Flat A and which are available for use in the Enhanced Contra Facility. CPF withdrawal for purchase is subjected to existing CPF policies. Approval Conditions HDB can revoke, withhold consent, revoke approval, vary or cancel the ECF at any time if: a. The contra party is made bankrupt before completion of the two transactions b. The contra party passes away before completion. c. The contra party has infringed any of CPF Act (Cap 36) and any regulations, terms and conditions imposed. d. any of the parties has infringed Housing & Development s prevailing policies, rules and regulations. Enhanced Contra Facility (ECF) e. the resale of Flat A is delayed, aborted or not completed. f. Monies in the CPF account are subject to a charging order made in pursuant to an Order of Court. g. Proceeds from sale of Flat A (cash and/or CPF) cannot be used to finance the purchase of Flat B under the Enhanced Contra Facility for any reason whatsoever Cancellation of Facility If HDB revokes, varies or cancels the Enhanced Contra Facility or if the resale of Flat A is delayed or aborted for any reason whatsoever: Where the completion date for the resale of Flat B has not been fixed by HDB, the contra party shall pay: 1. all monies to be utilised under the Enhanced Contra Facility towards part/full payment of the resale price for Flat B within 10 days from the date of notification by HDB that the Enhanced Contra Facility has been varied or cancelled; and 20

21 Cancellation of Facility 2. the balance of the resale price of Flat B on the day of completion. 3. Where the completion date for the resale of Flat B has already been fixed, the buyer of Flat B will be given notice to pay within 10 days all monies required to complete the purchase. 4. HDB reserves the right to reschedule the completion date of Flat AandFlatB. 5. CPF Board shall be authorisedto make the necessary amendments to the "CPF Application For Withdrawal Under Public Housing Scheme" form signed by the contra party at the first appointment. Cancellation of Facility Cancellation of Facility End 21