HDB FLAT IN A SINGAPORE DIVORCE – WHAT HAPPENS TO YOUR HDB FLAT IN A DIVORCE

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divorce lawyer singapore

HDB Flat in a Divorce – How is it dealt with?

 

Most married couples in Singapore start their marriage journey with the purchase of a HDB flat. This property is also likely one of their largest asset and the most complicated to deal with, in light of the numerous CPF and HDB regulations governing it.

 

divorce lawyer singapore

 

  1. Can I still keep my HDB flat after a divorce?
  2. Even if I cannot keep the HDB flat, can I sell it to another person?

 

  1. Can I still keep my HDB flat after a divorce?

 

After a divorce, even if your spouse agreed/was ordered by the court to transfer their interest in the HDB flat to you, so that you hold the property solely, this does not mean that you will automatically be able to keep the HDB flat. You may only do so if you fulfil HDB’s eligibility conditions.

 

We discuss below 2 scenarios in which you may be allowed to retain the HDB flat.

 

Scenario 1: There are children to the marriage and you have been granted care and control of them

 

If there are children to the marriage, you may be allowed to keep the HDB flat if you meet these conditions:

  • You were granted care and control of the children after the divorce;
  • You are financially able to take on the payment of the home loan for the HDB flat; and
  • The divorce was not due to the non-consummation of marriage or was annulled.

 

Scenario 2: There are no children to the marriage and you are eligible under the Single Singaporean Citizen Scheme

 

If there are children to the marriage, you may be allowed to keep the HDB flat under the Single Singaporean Citizen (SSC) Scheme if you meet these conditions:

 

  • You are a Singapore citizen;
  • You are at least 35 years old; and
  • Your matrimonial flat is a resale flat purchased from the open market without the CPF Housing Grant for Family.

 

However, if you find that you do not meet condition (c) because your matrimonial flat was bought directly from HDB or was a resale flat bought with the CPF Housing Grant for Family, you must meet an additional requirement of fulfilling the 5-year Minimum Occupation Period (MOP) before you can retain the flat under the SSC Scheme.

 

If you are unable to fulfil the MOP, it is still possible to include another person to keep the flat with, but the approval of this arrangement would be subject to HDB’s prevailing eligibility conditions and schemes.

 

  1. Since I cannot keep the HDB flat, can I sell it to another person in the open market?

 

If you find that you do not meet any of the 2 scenarios discussed above, you will not be allowed to keep your HDB flat and will have to dispose of it when you get divorced.

 

Scenario 1: The 5-year MOP is not satisfied

 

If you get divorced before the MOP is completed, the flat will have to be returned to HDB at the prevailing compensation price, subject to HDB’s approval. However, it is possible for parties to make an appeal to HDB to sell the flat in the open market even though the MOP is not yet reached. HDB will consider such appeals on a case-by-case basis. If the appeal is successful, the parties may sell the HDB flat in the open market.

 

Another possibility is simply for parties to wait for the 5-year MOP to pass before they obtain the divorce, if they believe that doing so makes greater financial sense and the marriage relationship is not so acrimonious that obtaining a divorce is urgent.

 

Scenario 2: The 5-year MOP is satisfied

 

If you and your spouse are able to meet the MOP, then you will be allowed to sell the HDB flat in the open market. The sale proceeds will first go toward the repayment of any outstanding mortgage loans and the reimbursement of CPF monies used for financing the purchase of the HDB flat, with accrued interest.

 

As for the remaining sale proceeds, there are 2 ways for parties to decide on how the balance should be divided between parties and in what proportions:

 

  • If parties are able to come to a mutual agreement, they can jointly decide on what proportions the HDB flat should be divided and dealt with; or
  • If parties cannot come to a mutual agreement, they can leave it to the Court to decide on how the HDB flat should be divided in a just and equitable manner.

 

  • You and your spouse decide on how the HDB flat will be dealt with

 

In a divorce, you and your spouse have the right to discuss and negotiate between yourselves and make a joint decision on how you wish to divide and deal with your assets, including your HDB flat.

 

There are various arrangements that you may consider. First, it is possible for one spouse to transfer their interest in the property to the other spouse for a certain sum, to allow the spouse to continue living in the flat, provided the HDB’s eligibility conditions are met. Another possible scenario is for parties to agree to sell the HDB flat in the open market and share the sale proceeds between themselves.

 

During the divorce proceedings, the Court will record you and your spouse’s agreed arrangement for the HDB flat in a court decision. However, if the divorce has been particularly acrimonious and parties are unable to work together to agree on how to divide the HDB flat, they may leave this matter to the Court to decide.  

 

  • Allow the Court to divide the HDB flat between spouses in a “just and equitable manner”

 

Under the Women’s Charter, if you get divorced in Singapore, the Court will have the power to divide all your matrimonial assets in a just and equitable manner between you and your spouse.

 

In most circumstances, your HDB flat will be considered to be a matrimonial asset and will be divided upon divorce. Section 112(10) of the Women’s Charter defines matrimonial assets to include any assets acquired during the marriage by one or both parties. If the asset was acquired before marriage, it would still be considered to be a matrimonial asset if it meets either of the following criteria:

 

  • The asset was ordinarily used or enjoyed by both parties or one or more of their children while the parties are residing together for shelter or transportation or for household, education, recreational, social or aesthetic purposes; or

 

  • The asset has been substantially improved during the marriage by the other party or by both parties to the marriage.

 

This means that in the situation where one spouse received the HDB flat as a gift or as an inheritance before the marriage, the HDB flat does not immediately count as a matrimonial asset. Only where the HDB flat was being used as the matrimonial home for the family or was substantially improved during the marriage by one or both spouses, does it become a matrimonial asset subject to division by the Court.

 

Once the court has determined that the HDB flat is a matrimonial asset, it will proceed to divide the property in a just and equitable manner by looking at various factors.

 

After determining the share of the HDB flat between spouses, the Court will also make orders on how the HDB flat should be dealt with. The Court may order one spouse to transfer their interest in the property to the other spouse for a certain sum or for parties to sell the HDB flat in the open market and share the sale proceeds according to the decided proportion.