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Thread: need advice: divorcee buying over marital home (HDB 3room)

  1. #1
    Senior Member ZerocoolAstra's Avatar
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    Default need advice: divorcee buying over marital home (HDB 3room)

    hi folks,

    My technician asked me for some help today, and I realize that I'm a bit clueless about this issue!

    He's been recently divorced, and the court ruling was for him to sell the matrimonial home (3room HDB flat) on the open market.
    However, for him to sell the flat and then buy another for himself would be very costly, in terms of cash upfront etc...
    His preferred option would be to buy over his ex-wife's share of the flat. This is agreeable with her.
    Thus an application letter was written to HDB, and they replied with a rather lengthy and technical letter, mentioning some documents like Option to Purchase (OTP) and some banking stuff.

    Just wondering if there is anyone out there who has gone through this procedure, perhaps in a professional context (estate agent, solicitor, etc).
    How should he proceed from here?
    Your advice is appreciated.
    Exploring! :)

  2. #2

    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    ask him to get an agent to do it for him. easier.

  3. #3
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    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    or talk to lawyer

  4. #4

    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    I feel sorry for whoever it is.

    From what I understand is:

    1. He cannot own the HDB flat in question or attempt to buy over it and the sale is compulsory as it is termed as matrimonial asset.

    2. He cannot buy a HDB flat within the 5 years even if he decide to co-name with someone else (unless it's a new spouse). Whether he has kids or not is irrelavent to the HDB ruling.

    3. When it's time to buy a flat, he'll need to fork out around SGD 20K in cash. The 20K cannot be covered by HDB loan or any other secured loans except in cash.

    4. He cannot buy a new 3 room flat. He can only upgrade to 4 or 5 rooms for new flats. However if he wants a 3 room flat again, he'll have to buy it in the resale market.

    This is what I know which may be inaccurate to specific details. So please seek HDB approved estate managers for advise.
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    Moderator ziploc's Avatar
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    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    Nowadays buying an HDB flat is almost as expensive as buying a condo. Might as well go straight for the condo.

  6. #6

    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    Question:

    Is he 35 years and above?

  7. #7
    Senior Member ZerocoolAstra's Avatar
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    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    Quote Originally Posted by drakon09 View Post
    Question:

    Is he 35 years and above?
    sorry I forgot to include more information.

    Yes, he is over 35 years old, so he's eligible to buy a flat on his own.
    They have been living there for over 7 years, so they satisfy the minimum requirement before selling
    Exploring! :)

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    Senior Member ZerocoolAstra's Avatar
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    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    Quote Originally Posted by ziploc View Post
    Nowadays buying an HDB flat is almost as expensive as buying a condo. Might as well go straight for the condo.
    easier said than done. Please find me a condo unit that is about 220K in price.
    He's not got enough $ to even buy another 3-room flat, let alone a condo.
    Honestly, who would want to stay in HDB flat if they could afford a condo unit?
    Exploring! :)

  9. #9
    Senior Member ZerocoolAstra's Avatar
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    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    Quote Originally Posted by flipfreak
    ask him to get an agent to do it for him. easier.
    Quote Originally Posted by aryanto
    or talk to lawyer
    yeah, but he's rather tight on cash now, hence trying to do this as cheaply as possible. I think the procedure should be fairly straightforward, just that he's feeling a bit helpless (doesn't understand the HDB letter) and I'm not familiar with this procedure.

    From what I understand, the OTP (option to purchase) is just a formal agreement by both parties on the sale price. His ex-wife has agreed to the valuation price as the sale amount, which is significantly cheaper than a similar unit in the vicinity.
    Following this, I would assume the next document would be something pertaining to the loan (he would need to take a loan to buy over his ex-wife's share of the flat).
    Exploring! :)

  10. #10

    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    Quote Originally Posted by ZerocoolAstra View Post
    yeah, but he's rather tight on cash now, hence trying to do this as cheaply as possible. I think the procedure should be fairly straightforward, just that he's feeling a bit helpless (doesn't understand the HDB letter) and I'm not familiar with this procedure.

    From what I understand, the OTP (option to purchase) is just a formal agreement by both parties on the sale price. His ex-wife has agreed to the valuation price as the sale amount, which is significantly cheaper than a similar unit in the vicinity.
    Following this, I would assume the next document would be something pertaining to the loan (he would need to take a loan to buy over his ex-wife's share of the flat).
    i suggest going through the hdb website on selling of flats then. it provides information on selling including OTP, deposit, timelines, etc etc.

  11. #11
    Senior Member roDz's Avatar
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    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    If his wife agrees to sell the flat to him:
    1) His CPF enough to pay back what his wife has contributed(CPF) + interest for that unit? If yes,
    2) Can he get loan for the buying over of the flat? He can get bank loan or write-in to HDB if he cant get bank loan.

    If he can get the above,i think,he can buy over the flat.

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    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    Hope this help. Just follow the link on each step.

    HDB: Selling Your Flat Procedures, Step-By-Step Guide
    http://www.hdb.gov.sg/fi10/fi10203p....e?OpenDocument

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    Moderator ziploc's Avatar
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    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    Quote Originally Posted by ZerocoolAstra View Post
    easier said than done. Please find me a condo unit that is about 220K in price.
    He's not got enough $ to even buy another 3-room flat, let alone a condo.
    Honestly, who would want to stay in HDB flat if they could afford a condo unit?
    Sorry, not referring to your friend, just making a general observation.

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    Moderator ziploc's Avatar
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    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    Quote Originally Posted by ZerocoolAstra View Post
    yeah, but he's rather tight on cash now, hence trying to do this as cheaply as possible. I think the procedure should be fairly straightforward, just that he's feeling a bit helpless (doesn't understand the HDB letter) and I'm not familiar with this procedure.

    From what I understand, the OTP (option to purchase) is just a formal agreement by both parties on the sale price. His ex-wife has agreed to the valuation price as the sale amount, which is significantly cheaper than a similar unit in the vicinity.
    Following this, I would assume the next document would be something pertaining to the loan (he would need to take a loan to buy over his ex-wife's share of the flat).
    Not sure about marital case, but I have a PR friend who bought his flat under the sibling scheme together with his brother. When his brother's PR status was revoked, he wrote in to HDB to see if he could repurchase the house from his brother, either under 35 yr old single scheme or family scheme (with his girl friend). HDB's reply was no, asking them to sell the house and repurchase from the open market, as the original house was leased under a different (sibling) scheme.

    For your friend, I would strongly recommend he checks with HDB and makes sure he could repurchase the flat before doing anything else.

  15. #15

    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    I think there's a 5 year period wait before buying a new flat from HDB even if the person is over 35.
    Tum podem extulit horridulum...日出東方﹐唯我不敗。

  16. #16
    Moderator ziploc's Avatar
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    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    If he cannot repurchase the marital flat, what he can do is to sell his current flat and buy another same size flat from the resale market. It is a hassle but he will not be losing much, since whatever cash he needs to purchase the 2nd resale flat can be recovered from the current unit. He can make use of this online flat prices enquiry page to find out the value of his flat. He will need to obtain a formal valuation of his flat before selling it. The selling price - valuation = cash on valuation (cov). He will also need to check his CPF balance, to see how much repayment he needs to give back to CPF including interest (can be checked online). This money, together with the amount in his ordinary account, can be used to finance his new flat. The cash he gets back from the sale = selling price - CPF repayment. This cash can then be used as the cov and lumpsum payment to offset the loan for his 2nd flat. Use this page to determine how much he could loan from HDB. This amount, together with the CPF amount and cash on hand, will help him decide which flat he could afford for his 2nd flat. Don't forget to add in the stamp, solicitor (lawyer), and mortgage fees for both his selling and buying flats. See here for the percentage of the various fees.

    As for the OTP, it is just an initial sale agreement between the seller and buyer. The OTP fee is usually $1000 or less paying to the seller, and with it the buyer secure the property for 14 days, to buy time to arrange his finances (arrange for loan, solicitor, etc). During this 14 days the seller is not allowed to offer the property to another buyer. On or before the end of 14 days, the buyer must exercise the option (signing the option paper plus deposit of $5000 or less, including option fee) or the option fee will be forfeited to the seller. This is then become a binding contract between buyer and seller, after which the other party can sue if one party decided not to go through with the sale. See here for more info. After the OTP is exercised, an application will need to be submitted to HDB and a first appointment date made.

    The link alan1996 suggested above is a very good link, just ask your friend to follow the steps.

    Hope that helps.

  17. #17
    Senior Member ZerocoolAstra's Avatar
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    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    Quote Originally Posted by ziploc
    If he cannot repurchase the marital flat, what he can do is to sell his current flat and buy another same size flat from the resale market. It is a hassle but he will not be losing much, since whatever cash he needs to purchase the 2nd resale flat can be recovered from the current unit. He can make use of this online flat prices enquiry page to find out the value of his flat. He will need to obtain a formal valuation of his flat before selling it. The selling price - valuation = cash on valuation (cov). He will also need to check his CPF balance, to see how much repayment he needs to give back to CPF including interest (can be checked online). This money, together with the amount in his ordinary account, can be used to finance his new flat. The cash he gets back from the sale = selling price - CPF repayment. This cash can then be used as the cov and lumpsum payment to offset the loan for his 2nd flat. Use this page to determine how much he could loan from HDB. This amount, together with the CPF amount and cash on hand, will help him decide which flat he could afford for his 2nd flat. Don't forget to add in the stamp, solicitor (lawyer), and mortgage fees for both his selling and buying flats. See here for the percentage of the various fees.

    As for the OTP, it is just an initial sale agreement between the seller and buyer. The OTP fee is usually $1000 or less paying to the seller, and with it the buyer secure the property for 14 days, to buy time to arrange his finances (arrange for loan, solicitor, etc). During this 14 days the seller is not allowed to offer the property to another buyer. On or before the end of 14 days, the buyer must exercise the option (signing the option paper plus deposit of $5000 or less, including option fee) or the option fee will be forfeited to the seller. This is then become a binding contract between buyer and seller, after which the other party can sue if one party decided not to go through with the sale. See here for more info. After the OTP is exercised, an application will need to be submitted to HDB and a first appointment date made.

    The link alan1996 suggested above is a very good link, just ask your friend to follow the steps.

    Hope that helps.
    Ok wow a lot of info to digest. I guess I'm the delegated one to help him through this, as his command of english is poor.

    Quote Originally Posted by eyes
    I think there's a 5 year period wait before buying a new flat from HDB even if the person is over 35.
    5 year wait to buy a new flat? But... how does this apply in this case? My friend is intending to buy over his own flat.

    Quote Originally Posted by ziploc
    Sorry, not referring to your friend, just making a general observation.
    Yes I agree with you. Some of the prices are quite shocking.
    But generally even a premium HDB flat (renovated, nice fittings, etc) would be at least 15-20% less than a similar condo unit in the same area. That's just from my basic observation whilst browsing through classifieds.

    Quote Originally Posted by alan1996
    Hope this help. Just follow the link on each step.

    HDB: Selling Your Flat Procedures, Step-By-Step Guide
    http://www.hdb.gov.sg/fi10/fi10203p....e?OpenDocument
    Thanks for the link!
    Exploring! :)

  18. #18
    Senior Member melvin's Avatar
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    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    Quote Originally Posted by eyes View Post
    I think there's a 5 year period wait before buying a new flat from HDB even if the person is over 35.
    Are u sure there is a 5 yr wait? Single can buy new flat meh?

  19. #19

    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    Quote Originally Posted by melvin View Post
    Are u sure there is a 5 yr wait? Single can buy new flat meh?

    I believe single parent who has custody of child/ren can buy a flat with the additional condition of applicant must be 35 and above. 5 years wait is compulsory only if intent to buy a new flat from HDB and that after selling an old one and there is a time gap betweeen the two- and this is the case always for divorce. I'm verifying this with my colleague who went through this on MSN.

    As I said, this applies only if the person is applying a new HDB flat and my colleague may be wrong even if he went through this. Please consult HDB by calling the hotline.

    Divorce is always a disaster for both parties unless both are loaded with lots of monies to burn.
    Last edited by eyes; 8th October 2009 at 03:35 PM.
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    Senior Member melvin's Avatar
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    Default Re: need advice: divorcee buying over marital home (HDB 3room)

    Quote Originally Posted by eyes View Post
    I believe single parent who has custody of child/ren can buy a flat with the additional condition of applicant must be 35 and above. 5 years wait is compulsory only if intent to buy a new flat from HDB and that after selling an old one and there is a time gap betweeen the two- and this is the case always for divorce. I'm verifying this with my colleague who went through this on MSN.

    As I said, this applies only if the person is applying a new HDB flat and my colleague may be wrong even if he went through this. Please consult HDB by calling the hotline.

    Divorce is always a disaster for both parties unless both are loaded with lots of monies to burn.
    The best dun Divorce!

    I just checked.

    A divorcee whose matrimonial flat was bought direct from HDB, a DBSS flat bought under the CPF Housing Grant Scheme, or resale flat bought from open market under the CPF Housing Grant Scheme, may apply to buy an HDB flat or be listed as an occupier after 5 years from the date the divorce is made absolute to the date of application for a new flat. However, the 5 years period will not apply if his matrimonial flat was bought from open market without any CPF Housing Grant or he is applying for the flat with his parents or new spouse.

    Hope this is clearer!

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