Real News‎ > ‎2013‎ > ‎July 2013‎ > ‎

03 July 2013

Vague clauses in HDB document

Source: Straits Times | Forum Letters 

THE sale of my Housing Board property and the purchase of another one turned out to be a costly and unpleasant experience.

I had scheduled a completion date, with the agreement of the seller. However, due to my inexperience and time constraints, my Central Provident Fund (CPF) money from the sale proceeds of my HDB property could not be transferred back into my CPF account in time to meet the agreed deadline.

The law firm representing me requested an extension and I was slapped with a retrospective late interest fee.

The current HDB Option to Purchase, which governs HDB resale transactions, uses the Law Society's 1999 Conditions of Sale as a reference and contains some vague clauses.

For example, Clause 12 states: "Unless extended by the HDB, the completion date will be within eight weeks from the date of the HDB's first appointment with the seller and buyer for the sale and purchase of the flat."

What does "unless extended by the HDB" mean? If there is a written agreement between the seller and the buyer for the completion date to be past the eight weeks, the HDB is required to give its approval for an extension. Does this fulfil the said requirement? Nothing in the Option to Purchase document clarifies this.

Moreover, there are currently two versions of the Law Society's Conditions of Sale - the 1999 version and the 2012 version.

There are two major differences. Under the 2012 version, Clause 9.1 uses the phrase "scheduled completion date" and states that interest payable by the buyer is 8 per cent per annum if "the sale is not completed on or before the scheduled completion date"; in the 1999 version, Clause 8.1 uses the phrase "date fixed for completion" and states that interest liable is 10 per cent per annum.

What is the difference between "scheduled completion date" and "date fixed for completion"? I understand that both sets of conditions are not mandatory and are usually used as a reference. So why doesn't the HDB incorporate the 2012 version or allow transacting parties to choose which version to follow?

From my personal experience of having executed three HDB resale transactions, I have never had a housing agent explain to me the HDB's Option to Purchase contract together with the Law Society's Conditions of Sale 1999.

Potential buyers and sellers of HDB resale properties should take note of these vague clauses and draft a document before proceeding with any transactions.

I urge the Council for Estate Agencies, HDB and the Law Society to look into these loopholes and prevent them from being exploited and imposed on unsuspecting members of the public.

Kieran Ng