What Happens to Your HDB Flat After Divorce?
If you have a HDB flat and you are contemplating a divorce, you may be concerned about what happens to your HDB flat after divorce. For many people, the HDB flat may be the largest single asset that they own. Hence, understanding more about the legislation affecting the HDB flat post-divorce is vital. In this article, we explain the various scenarios and the legal consequences.
If the HDB flat is co-owned by the divorcing couple, there are usually three options available after the divorce: (i) surrender back to HDB, (ii) sell in the open market, or (iii) transfer from a spouse to the other spouse.
HDB Flats Under MOP
For flats under MOP such as BTO flats yet to obtain the keys, there are only two options available: (i) surrender back to HDB or (ii) transfer from a spouse to the other spouse.
(i) Surrender back to HDB
This option occurs if either party have been informed by HDB that they are unable to retain the flat or neither party wants to retain the flat.
There are costs involved for the surrender. Usually 10% of the purchase price will be forfeited by HDB. The amount forfeited is determined by HDB at the point of surrender.
(ii) Transfer from a spouse to the other spouse
This option is only available if the remaining owner-spouse obtains HDB’s approval to retain the flat in his/her sole name. Based on our experience, the spouse is usually able to retain the flat in his/her sole name if she/he has care and control of the children of the marriage.
HDB Flats Past MOP
For flats over MOP, there are only two options available: (i) sell in the open market or (ii) transfer from a spouse to the other spouse.
(i) Sell in the open market
This option occurs when both parties agree that neither one does not want to retain the flat, either party is unable to retain the flat due to failing HDB’s eligibility criteria, or the Court ordered for the flat to be sold in the open market.
When a sale occurs, the sales proceeds will be distributed in the following manner: (i) repay the outstanding housing loan in full, (ii) refund to both parties’ CPF account being monies utilised towards the purchase price of the flat including accrued interest, (iii) pay all costs and expenses of the sale, and (iv) balance sales proceeds to be divided in either the manner that both parties have agreed or the Court-order manner.
A full CPF refund to both parties’ CPF accounts is mandatory unless CPF Board expressly allows for a partial refund (usually due to negative sale).
(ii) Transfer from a spouse to the other spouse
This option is only available if the remaining spouse-owner is above 35 years old or has care and control of the children of the marriage.
During a transfer of the flat, refund to the outgoing spouse-owner’s CPF account is not a must. There could be no CPF refund, partial CPF refund, or full refund to the CPF account to the outgoing spouse. Parties can agree on whether there will be a CPF refund, and the required amount (if any). If there is no agreement, the Court will determine the amount to be refunded (if any).
The remaining spouse-owner needs to consider whether he/she can afford to retain the HDB flat in his/her sole name. If there is an outstanding housing loan, he/she must consider whether he/she can obtain a HDB HLE loan or bank loan to take over the outstanding housing loan.
Transfer of the HDB flat can only be done when the transfer terms are expressly set out in the Interim Judgment/ Order of Court, and can only be effected once the Final Judgment is issued. The transfer process will take around 2-4 months time if both parties are cooperative in the transfer. If not, it might take up to 6 months for the transfer to be completed.
If you have more questions on what happens to your HDB flat post-divorce, you may wish to contact us at +6587802499 (whatsapp).
