What happens to your HDB flat after you Divorce?

The majority of Singaporeans live in Housing and Development Board (HDB) flats and it is no surprise that many undergoing a divorce in Singapore are concerned about their living arrangements after the split. Regardless which type of flat you purchased— BTO, EC or DBSS— HDB’s rules and regulations are still applicable.

Before you file for your divorce, your divorce lawyer should have already made standard queries to HDB regarding your eligibility to retain your matrimonial flat. This is because the family nucleus will be destroyed once the decree for divorce is made absolute. If your divorce is uncontested, your Agreed Matrimonial Property Plan (stating what you are going to do with the HDB flat) must also adhere to HDB’s policies.

Throughout the years, legislative changes have been made to allow more flexibility for individuals to retain their flats after divorce. This guide will explore viable options available for you.

1. A hurdle to overcome: Minimum Occupation Period (MOP)

As a rule of thumb, the Minimum Occupation Period (MOP) is the first criteria that you must meet before you can sell your flat in the open market or transfer your ownership to your ex-spouse. MOP varies from each type of public housing, the mode of purchase and whether it was purchased with or without Central Provident Fund (CPF) Housing Grant.

If neither party is able to retain the flat, you will have to surrender it to HDB. Many couples tend not to proceed with divorce as they are unwilling to suffer potential losses when they surrender their flat.

2. Retain HDB flat

To retain the flat, a family nucleus is usually required. Exceptions are made if individuals qualify for the Single Singapore Citizens (SSC) scheme.

Unless you have settled an agreement with your ex-spouse, the court will decide whether the flat shall be disposed or retained, who should retain the flat and what entitlements to be given to other individual.

A parent with care and control of a child constitutes a nucleus. If a party has no children from the marriage, he/she may also form such a nucleus if with his or her parents or a new spouse.
Otherwise, he/she can retain the flat by himself/herself under the SSC scheme. The eligibility criteria includes the following:-

(a) Individual must be a Singapore citizen
(b) Individual must be at least 35 years old and above
(c) Matrimonial flat is a resale flat bought in the open market without the CPF Housing Grant for Family. If the matrimonial flat is brought directly from HDB (including resale flats bought with the CPF Housing Grant for Family), the five-year minimum occupation period must be fulfilled before the divorced party is allowed to retain the flat.

If there is existing mortgage, the flat will have to be discharged upon transfer and a fresh loan will have to be applied. While parties are not eligible to apply for the CPF Housing Grant, they may be granted a HDB loan if they meet the requirements stipulated by HDB.

Prior to legislative changes in 2008, a spouse who was entitled to a bigger share of the matrimonial home was unable to obtain a transfer of ownership from his/her ex-spouse unless all monies used by outgoing-owner had been reimbursed into his/her CPF account with accrued interest. In the end, many people had no choice but to sell the flat.

With new amendments, the Family Court can order an immediate transfer of the property from one spouse to another with any refunds being made to the member’s CPF account first. However, there will be a fresh charge placed on the property to secure the refund of CPF monies into ex-spouse’s CPF account should the property be sold in the future.

3. Sale of HDB flat

There are two ways to sell the flat; either to sell it in the open market to other buyers, or to sell your shares to your ex-spouse.

A ‘Resale of Part-Share’ is different from the transfer of ownership to the other spouse. The former is treated as a normal transaction at market price or a mutually agreed price.
Before one can do the abovementioned transaction, he/she must obtain a court order to indicate the sale of one’s share of the matrimonial flat to the other by way of resale part-share.

However, if parties want to sell the flat in the open market, they must meet the MOP first. Divorced sellers need to produce the following documents:-

(a) Deed of separation or Interim Judgment (Decree Nisi) and Certificate of Making Interim Judgment Final (Decree Nisi Absolute)
(b) Court Order (if any)

Should the above documents not be in any of the 4 official languages in Singapore, you will require an official English translation done by an interpreter of the Subordinate Courts or the Supreme Court of Singapore.

HDB does not allow for a deferred sale of flats after the interim judgement for divorce is made final as the family nucleus has ceased to exist.

The sale proceeds will be used to pay off any outstanding mortgage loan, before reimbursing CPF the amount used to purchase the flat with accrued interest. The remaining balance will be divided between you and your ex-spouse in a manner instructed by the court.

4. Surrender of flat upon divorce

This is usually the final resolution if both parties have not met the MOP or are ineligible to retain the flat.

Factors that HDB consider when determining the compensation payable include the mode of purchase of the flat, the occupation period and value of flat in the current market.

The compensation amount may not be sufficient to redeem the mortgage and reimburse CPF the monies utilized from each individual’s account. In this sense, a loss is made and parties may need to fork out their own savings to cover any outstanding balance.

5. Other cases: Annulment of marriage, separation

For annulment proceedings, HDB only allows retention of the flat if either of your parents were originally listed in the application to buy the flat. Otherwise, the flat may have to be returned at the prevailing compensation price, subject to HDB’s approval.

For couples undergoing judicial separation, the same rules illustrated in divorce cases apply. You can retain the flat with your children or another individual. Likewise, you can sell off your flat after meeting the MOP and other criteria.