Good legal representation can make taking possession of your flat a breeze. (Image courtesy of Singapore Tourism Board)
By iProperty.com Singapore – December 28th, 2010
Australian expatriate and award-winning blogger, who wrote about his experience of living as a foreigner in a HDB in Woodlands here, Peter Breitkreutz, takes us through his own experience of buying a HDB flat as a Singapore Permanent Resident. Here he looks at meeting with HDB, engaging legal representation, and taking ownership of your new property.
Step 6: Applying for HDB First Appointment
Now comes the first of the extended waiting times. Once the OTP is successfully exercised and the bank’s “Letter of Offer” has been accepted, the agent will help you to apply to HDB for what is known as ‘First Appointment’. This is a meeting at the HDB Resale Office with both the seller and the buyer, in which HDB will determine the legalities of the transaction and the eligibility of both parties to enter into such a transaction (and approve or reject the application accordingly). The waiting time for ‘First Appointment’ (once the application is received by HDB) is usually around 8 to 10 weeks.
Step 7: Engaging a Lawyer
There are a couple of options here. You can either source your own legal representation, or you can choose to utilize HDB’s services for the legal work. In our case, we engaged a law firm recommended to us by the bank (the fees which were subsidized by the bank as a part of the mortgage package). It is the responsibility of the buyer to pay legal fees for both themselves and the bank. Generally, legal fees should be around $2,000 to $2,500 (including all associated fees etc, but not including stamp duty on sale or mortgage). The bank we chose to take a mortgage with gave us a subsidy of around half of that amount.
Step 8: HDB First Appointment
Your agent will accompany you to the first appointment with HDB, also present will be the seller and their agent. The process is very straightforward, and really just involves paperwork and then agreeing on a ‘second appointment’ date, which is when the apartment will actually be handed over. Officially, this should be eight to ten weeks later. However, if both the seller and buyer agree on an earlier date, and the legal representatives agree that they can meet this date, HDB can approve the same (we brought ours down to just five weeks). Usually, around the time of the first appointment, the estate agent will probably expect their payment (agent’s fee), because this is also about the time that their work is done. If you have secured yourself a good agent, they will make themselves available to further assist you, for example, how to secure ‘season parking’ at your new HDB block.
Step 9: Meeting With Your Lawyer
Your legal representative would already have prepared all the documents required for execution – from their engagement through to signing of the mortgage documents for the bank. They will also assist in working with CPF on your behalf should you have decided to use any of your CPF account funds for the legal fees or deposit, or if you are using the funds monthly to subsidize your mortgage payment. The lawyer will also draw up a ‘financial plan’ which will outline when all payments will need to be made – payment will be to them and they will disperse the monies accordingly.
Step 10: HDB Second Appointment (Hand Over)
The time when you finally get the key to your new property finally arrives! Congratulations! You now own your own resale HDB apartment! In fact, you don’t actually need to be in attendance for this and your lawyer can attend the second appointment on your behalf.
One thing to remember: if you have opted to use CPF to subsidize your monthly mortgage repayment, CPF will require that you take out HPS (home protection scheme). Essentially, this is insurance should something befall the mortgagees. CPF will contact you directly for this, and it should cost around $1,000 maximum, depending on amount borrowed, health status, etc, the same as any insurance).