Connect with us


6 Dates That HDB Flat Buyers Need To Know That Are On Their Agreement For Lease

Some dates are important to know before you collect your keys, while others become important after you have collected your keys.

Going through the full buying process of a Build-to-Order (BTO) HDB flat could be an unnerving experience, especially if it’s your first time. Hence, it is understandable that many young flat buyers would be cautious about each step of the buying process and may wish to know the different timelines and milestones that they should keep track of, given that a property purchase is a large-ticket expense.

The real timeline as a flat buyer begins the moment the Agreement for lease is signed as the cost of turning back (i.e. cancelling the flat booking) will result in a forfeit of 5% of the flat purchase price. You may find that the Agreement comes with a number of different dates, least of which is the date when the agreement for lease was made, which is also known as the “date of sale”. Amongst these dates, some are more critical to know before you collect your keys, while the other dates become more important to know after you have collected your keys.

Here are 6 dates that new HDB flat buyers need to know upon signing their agreement for lease.

#1 Probable Completion Date (PCD) vs Delivery Possession Date (DPD)

When flat buyers sign their HDB lease agreement, the one thing they want to know is when they may take possession of their unit.

To get a rough idea, flat buyers can look for two dates in the Agreement for Lease. One is the Delivery Possession Date (DPD), and the other is the Probable Completion Date (PCD).

The Delivery Possession Date can be considered as an almost guaranteed date by which you will receive possession of the flat as it is the date by which HDB is required under the Agreement for Lease to deliver possession of the flat.

On the other hand, the Probable Completion Date is simply the estimated completion date, which simply implies that it is the time period by which HDB thinks it is more likely for the project to be completed by. In most instances, the PCD is around one year earlier than the DPD.

However, since the pandemic struck, construction on the new Build-To-Order (BTO) housing projects has been delayed. This has led to the completion date for some projects being delayed by at least a few months. There are around 58 BTO HDB projects, as of April 2022, that are delayed by six months or more. One such BTO project is Waterway Sunrise II at Punggol.

The table below shows the initial PCD that was conveyed to flat buyers during the sales launch was around the first and second quarter of 2021, despite the DPD being between March and June 2022. While residents would not be compensated for any changes to the PCD, they can expect compensation if they do not receive possession of the unit by the DPD, as it is for this project. The amount of compensation that each resident is entitled to would depend on the selling price of the flat and the length of delay beyond the DPD.

Source: HDB

Once the DPD has passed, as in the case of Waterway Sunrise II, then flat buyers can only look at the latest Probable Completion Date (PCD) for guidance and tracking of the project’s completion. For these flat buyers, the PCD will then become the critical date to take note of.

Read Also: Why It Doesn’t Make Financial Sense To Give Up Your HDB BTO Flat Due To Construction Delays

#2 Temporary Occupation Period Date

During a project’s construction phase, flat buyers would be keen to keep track of the Temporary Occupation Period (TOP) date. When a new project receives TOP, it means that new flat owners will be able to occupy their unit even if the project’s development, such as the surrounding amenities or landscape work, is not completely finished. It is for this reason that the TOP date is viewed more significantly by homeowners than the legal completion date.

The TOP date could also coincide with the key collection date for some homeowners.

Read Also: Will Your HDB BTO Key Collection Date Be Delayed, And Can You Further Defer?

#3 Lease Commencement Date

Another important date that homeowners should take note of is the lease commencement date. It can be simply thought of as the month and year from when the lease (i.e., 99-year lease, 999-year lease, or freehold) on the property starts. This is critical to take note of as it determines when the tenure of the property starts and, therefore, the age of the property.

For HDB flats, the 99-year lease commencement date starts from when the first occupiers take possession of the keys to their flat. This is unlike private property where the lease commencement date could start upon the developer’s ownership of the land. Therefore, a 99-year leasehold may have run down a few years before the owners take possession of the unit.

It is possible that even though the lease commences in the same year for a HDB block, the remaining lease could still differ by a few months for the different residents in that HDB block. This is due to the different time periods in which each resident may have collected their keys or taken possession of their unit. For example, we can see that the lease for 157 Lor 1 Toa Payoh started in 1971. But the remaining lease for each unit could differ between 48 years and 2 months and 49 years, a difference of about 10 months.

#4 Minimum Occupation Period 

Once you collect the keys to your flat, it starts off an important timer known as the minimum occupation period (MOP). The MOP is the minimum period that the flat owner is required to physically occupy the unit before you are allowed to sell the flat on the open market. The MOP duration, which depends on the purchase mode of the HDB flat, could range between 5 years for BTO and resale flats, to 10 years for Prime Location Public Housing (PLH) flats, and 20 years for flats bought under the Fresh Start Housing Scheme.

The MOP is calculated from the date that you collect the keys to your flat and excludes any period where you do not occupy the flat. Hence, for BTO flat owners, the lease commencement date is also when their MOP starts.

If the fiancé/fiancée couple have booked a BTO flat that is completed, they must produce their Marriage Certificate for inspection by HDB within three months of taking possession of the flat.

Also, applicants or occupiers who are existing tenants of an HDB rental flat must terminate their tenancy and surrender vacant possession of the rental flat to HDB within four months from the date of taking possession of the new flat.

Lastly, an applicant or occupier listed in the application who is an owner of an existing HDB flat (including a Design, Build & Sell Scheme (DBSS) flat) must dispose/relinquish his/ her interest in the existing flat within 6 months from the date of taking possession of the new flat.

Read Also: 6 Lesser-Known Facts About Minimum Occupation Period (MOP) For Singaporeans

#5 Defects Liability Period (DLP)

As a new HDB flat owner, you have 7 days to return the Resident Feedback Form to the Building Service Centre (BSC), which you will be provided with during key collection. You can then arrange for a joint inspection with the project contractor to verify the defects that you have spotted and allow them to make rectifications where necessary.

HDB provides all new HDB flat owners with a 1 year Defects Liability Period (DLP) where any reported flaws and defects are rectified by the project contractor within 14 days. Additionally, HDB also provides warranty coverage for ceiling leaks, external wall seepage, and spalling concrete as per itemised in the table below.

Issue Warranty Period
Ceiling leak at toilets/kitchen 5 years*
Water seepage from external wall 5 years
Spalling concrete 10 years

*The warranty for ceiling leak will cease if floor tiles have been changed; or if the waterproofing system has been tampered with. Source: HDB

Do take note of the warranty period for the different issues, as it is often assumed by most to have lapsed together with the 1 year DLP. It is also one of the dates that you may need to take note of the longest, though it may not be as essential as the other dates.

#6 Legal Completion Date           

The legal completion date, also known as the Certificate of Statutory Completion (CSC), marks the completion of all building work on the project. It is applied by the project developer from the Building and Construction Authority (BCA) at the later stage of the project’s development. It assures homeowners that there are no more pending works left. Therefore, this is the final date by which you can expect to no longer see any hoardings or unfinished landscape around your estate.

Featured Image Credit: Giovanni Lidya/DollarsAndSense

Read Also: Here’s How CPF Accrued Interest On Your Home Affects Your Retirement Planning

This article was originally published on 15 July 2022. 

Listen to our podcast, where we have in-depth discussions on finance topics that matter to you.