There are several problems you may face when dealing with your HDB Flat after a divorce. This is especially so when the minimum occupation period (“MOP”) for the HDB flat is not yet up.
Depending on the way in which ownership of the HDB flat changes pursuant to the divorce, there may also be issues arising from banks and their mortgage loan requirements/restrictions. As such, ownership of an HDB flat usually gives rise to practical problems when parties attempt to carry out the Court Order, post-divorce.
Often times, while parties may have their own ideas on what the ideal situation is, it may not be possible due to restrictions on ownership and limits to what banks are willing to offer in terms of mortgage loans. For example, while the courts may order a certain change in ownership to take place, it cannot compel institutions such as the HDB and private banks to make the Court Order practical, especially if there are already existing laws that restrict ownership of the HDB flat. Here are some restrictions to look out for:
One example of a restriction is that single persons cannot generally own a HDB flat in their sole name unless they can establish that they have a family unit. Thus, while the Court can decide that the share of one party is to be transferred to the other party, such that the recipient party becomes the sole owner – HDB may still require the intended sole owner to fulfil certain other requirements (e.g. showing that there is a family unit)before he or she is allowed to become the sole owner of the HDB flat.
Restrictions on banks and their ability to issue mortgages of certain values can also give rise to judgments becoming impractical and unfeasible. Where there is a change in ownership, refinancing is always an issue, and the amount of mortgage depends on the individual circumstances.
Where CPF monies have been used to finance the purchase of a HDB flat that is subject to a Court Order, it is also necessary to enquire with CPF on their regulations and policies. This is especially because failure to comply with CPF regulations will require parties to go back to Court to have the Court Order rectified for compliance.
What can I do to avoid these pitfalls?
You will need a good lawyer to help you to navigate through these potential problems. At PKWA Law, we have a team of experienced family lawyers who work closely with our Real Estate Department to ensure that the sale or transfer of your HDB property goes smoothly.