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Minister Desmond Lee: No immediate changes to penalties for MOP rule breaches by property agents

MND Minister Desmond Lee said the Council for Estate Agencies (CEA) has no immediate plans to reconsider penalties for breaching minimum occupation period (MOP) rules.

He emphasized the CEA’s disciplinary actions, which encompass fines and registration suspensions for errant property agents.

This stands despite recent cases where agents received fines of only S$1,000 and S$500 for advertising BTO flats that did not meet the required five-year MOP.



SINGAPORE: Minister of National Development Desmond Lee has confirmed that the Council for Estate Agencies (CEA) has no plans to review the penalties for breaches of minimum occupation period (MOP) rules at this juncture.

This is despite the recent cases where two property agents received fines of only S$1,000 and S$500 respectively for advertising BTO flats that did not meet the required five-year MOP.

Rachel Ong, PAP MP for West Coast GRC, on Tuesday (7 Nov) filed a Parliamentary Question to ask the MND minister whether there will be a review of the penalties imposed on real estate agents who market or sell HDB flats that do not fulfil the MOP, such as to make the fine comparable to the commission potentially gained from selling such flats or to include other non-financial deterrent penalties.

In a written reply, Mr Lee emphasized that CEA takes a serious view of errant behaviour by property agents and has strengthened its disciplinary framework when the amendments to the Estate Agents Act came into force on 30 July 2021.

He highlighted that the maximum financial penalty that CEA’s Disciplinary Committee (DC), may impose on errant agents for serious disciplinary breaches was raised from $75,000 to $100,000.

“When determining the appropriate penalties to be meted out, the DC considers all relevant facts and circumstances of the case, including the potential commission earned, the extent of the agent’s culpability, and whether there are other aggravating or mitigating factors.”

He explained that for property agents who breach HDB’s minimum occupation period rules when facilitating HDB property transactions for their clients, the DC not only censures and imposes financial penalties on the agents, but also suspends the agents’ registrations.

“This is a strong deterrent, as the agents cannot earn any commission since they are not allowed to conduct estate agency work when suspended. ”

Property agents fined for selling unoccupied BTO flats in violation of 5-year MOP rule

Last month, CEA stated that two property agents, Ms Christina Au and Ms Isabelle Loo, violated the Code of Ethics and Professional Client Care by failing to adhere to the regulations governing Housing Board flats.

On January 18, Ms Au received a fine of S$1,000 and was censured for her involvement in the marketing of an HDB flat in Yishun Street 51.

Similarly, Ms Loo was fined S$500 and censured on 10 Oct for marketing a flat located at 110A Depot Road, based on disciplinary actions outlined in the public register of estate agents.

According to the CEA’s public register, Ms Au attempted to facilitate the resale of the HDB flat despite being aware that the sellers had not physically occupied the flat and had not met the required MOP.

This action constituted a breach of the provisions outlined in the Code of Ethics and Professional Client Care as specified in the First Schedule of the Estate Agents (Estate Agency Work) Regulations 2010.

Meanwhile, Ms Loo marketed the Depot Road flat and conducted viewings for potential buyers, even though the owners were not eligible to sell the flat on the open market at the time.

This is because they had “not physically occupied the flat for the duration of the MOP”.

The Straits Times reported that CEA found no code violations for two other agents who marketed apparently vacant HDB flats in Bukit Batok East Avenue 6 and Henderson Road.

In December 2022,  several unrenovated BTO flats that appeared to have never been lived in were put up for sale on property listing portals.

According to the Housing and Development Board (HDB) website, flat buyers have to physically occupy their flats during the Minimum Occupancy Period (MOP), which is five years for BTO flats.

During the MOP, owners are not allowed to sell or rent out the whole flat or buy a private home. This applies to flats bought from HDB or on the resale market.

Minister Lee stressed owner-occupancy mandate for BTO flats During MOP period

At the time, a 5-room BTO flat at Block 505A Yishun Street 51 was reported to have its whole unit remain in its original condition for eight years before being listed at S$690,000 on the Property Guru website for sale.

Local media outlets also featured additional similar properties listed on the real estate website.

The news prompted Mr Desmond Lee, Minister of National Development, to emphasize the requirement that a BTO flat must be owner-occupied for the entire MOP period.

“I was asked whether a family can buy an HDB BTO flat, not live in it or move into it for 5 years, and then sell it as “almost brand new” on the resale market.”

“The answer is no, “he wrote. He explained that If the owners are unable to fulfil the MOP, then the flat needs to be returned to HDB. HDB will then put up as a balance flat for other home buyers to apply for.

For the past 5 years, HDB took enforcement in 53 cases on non-occupancy during MOP period

HDB has taken enforcement action in 53 cases where flat owners did not occupy their units during the MOP between 2017 and November 2022.

Of these, 21 cases involved HDB taking back the flats, with the rest being issued fines or warnings.

It said it carries out about 500 inspections per month to detect violations of housing rules, such as illegal flat rentals.

Should it receive feedback on suspected cases of violations, such as flats being listed for sale without being occupied by their owners, investigations will be carried out.

If investigations show that the flat was not owner-occupied during the MOP, HDB may “compulsorily acquire” the flat, impose a financial penalty of up to S$50,000 or issue written warnings.

Flats that are compulsorily acquired by HDB under these circumstances will also be put up as sale of balance flats.

Under the Housing and Development Act, owners whose flats are compulsorily acquired by HDB will be debarred from buying a subsidised flat.

They will also not be allowed to take over a flat by changing the flat’s ownership and they cannot rent a public rental flat from HDB.

These individuals also cannot be included as occupiers in the application of such flats.

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