A Complete Guide to HDB Extension of Stay

Selling your HDB flat is a major milestone. After successful price negotiations and finding the right buyer, you can finally look forward to moving into your new home.

However, moving isn't always a straightforward process. Whether you have children, elderly parents, or simply more belongings than you anticipated, coordinating a move can be challenging.

To make this transition smoother for you and the buyer, you can request a Temporary Extension of Stay from HDB. This allows you to remain in your flat for a short period after the official resale completion date.

What is an Extension of Stay for HDB?

An HDB Extension of Stay1 is a formal agreement allowing sellers to continue living in their flat for a limited time after the resale transaction. This is particularly helpful when there's a gap between the handover of your old flat and the availability of your new home.

Typically, after you exercise the Option to Purchase (OTP), the HDB resale process takes about 8 weeks to complete. However, various factors can influence this timeline. An Extension of Stay provides flexibility during this period.

Extension of Stay - How Does It Work?

The HDB resale process involves several key stages:

• Option to Purchase (OTP): The buyer pays an option fee to secure the flat and has 21 days to exercise the OTP.
• Resale Application: Both buyer and seller submit their resale applications to HDB.
• HDB Approval: HDB reviews the application and grants approval.
• Resale Completion: The buyer and seller complete the transaction, and ownership of the flat is transferred. When Does the Extension Period Start? The Extension of Stay period begins on the Resale Completion Date, which is agreed upon by both the buyer and seller.

This extension period cannot exceed three months, and HDB does not grant any further extensions beyond this timeframe.

Things to Consider as a Seller When Applying for Extension of Stay

If you find yourself needing an Extension of Stay, it's important to plan and address any outstanding matters promptly. This ensures a smooth transition for both you and the buyer.

• Confirmed Purchase: You must have committed to buying a completed property in Singapore (either another HDB flat or a private property) at the time of the resale application. This means you should have already exercised an Option to Purchase or signed a Sale and Purchase Agreement for your next home.
• Early Request: Discuss the need for an Extension of Stay with the buyer before issuing the Option to Purchase (OTP). This allows for transparency and ensures the buyer is aware of the arrangement from the outset.
• Property Condition: Even though ownership technically transfers to the buyer on the Resale Completion Date, you are responsible for maintaining the property in good condition during the extension period.

Things to Consider as a Buyer When Applying for Extension of Stay

As a buyer, it's equally important to understand the implications of agreeing to an Extension of Stay. Here are some factors to consider:

• Potential Damage: There's a risk of damage to the property during the extension period. It's advisable to discuss with the seller how any potential damage will be addressed before your agreement.
• Moving Delays: An extension can delay your move-in date and any planned renovations. Factor this into your timeline and make alternative arrangements if necessary.
• Property Tax: You'll be liable for property tax at the non-owner-occupier rate during the extension period, which is higher than the owner-occupier rate.
• Temporary Accommodation: If you need to vacate your current home before the extension period ends, you'll need to find temporary accommodation.
• Additional Costs: You'll be responsible for utility fees, service and conservancy charges during the extension period.
• MOP Commencement: Your Minimum Occupancy Period (MOP) will only begin after the extension period ends.

During the Extension of Stay, the seller is typically expected to compensate the buyer for the added costs incurred. This is usually outlined in a private agreement between the buyer and seller, separate from the HDB resale transaction. While this is a private agreement, a HDB's approval is still required.

Can I Apply for an Extension of Stay Without Going Through HDB?

While it might be tempting to arrange an informal extension with the buyer, it's strongly discouraged. Bypassing the official HDB process can lead to complications and disputes.

Here are some potential issues you might encounter:

• HDB Action: HDB may take action against both the buyer and seller as an informal Extension of Stay is technically illegal.
• Buyer's Liability: Since the buyer is the legal owner of the property after the resale completion, they are responsible for anything that happens on the property, even if the seller is still residing there.
• Property Tax: The buyer will be required to pay property tax at the higher non-owner-occupier rate during the unofficial extension period.

What if My Buyer Is Not Willing or Unable to Grant Me an Extension of Stay?

If the buyer is hesitant or unable to grant an Extension of Stay, it's important to understand their reasons and engage in open communication. Try to find a mutually agreeable solution.

You and the buyer can explore drafting private terms and conditions to address specific concerns. However, remember that any such agreement still needs HDB's approval.

Another option is to negotiate the timing of the Option to Purchase (OTP) exercise. If you don't have a property ready to move into, extending the OTP period can give you more time to secure your next home before the resale completion.

Can I Still Request an Extension of Stay After the OTP?

While it's best to discuss the need for an Extension of Stay before issuing the OTP, you can still approach HDB if the need arises later. If HDB approves your request, you can then negotiate the terms with the buyer. However, keep in mind that the buyer is under no obligation to agree.

What if HDB Does Not Approve My Application for an Extension of Stay?

If HDB rejects your application for an Extension of Stay, you'll need to find alternative accommodation. This could involve renting a temporary apartment, staying with family or friends, or exploring other short-term housing options.

What if my seller threatens to back out of the sale?

As a buyer, it's important to remember that once the seller has issued the Option to Purchase (OTP) and you have exercised it, a legally binding agreement is in place. The seller cannot simply back out of the sale without facing potential legal consequences.

When Do You Need an Extension of Stay?

Beyond fulfilling legal requirements, an Extension of Stay can be a practical solution for various situations homeowners may face when moving.

Here are some common reasons why you might need an Extension of Stay in Singapore:

• Incomplete Purchase or Renovation: Your new property might not be ready for you to move in immediately. This could be due to ongoing renovations, construction delays, or waiting for the completion of your new home purchase.
• Family Healthcare: In cases of family emergencies or healthcare needs, an Extension of Stay can provide stability and allow you to remain in your current home while addressing these situations.
• School Terms: If you have school-going children, an extension can help avoid disrupting their education by allowing them to finish the academic term before moving.
• Elderly Family Members: Moving can be particularly challenging for elderly family members. An extension can provide them with more time to adjust and prepare for the transition.
• Unexpected Delays: Unforeseen circumstances, such as difficulties in securing movers or unexpected travel plans, can necessitate temporary housing via an Extension of Stay.

Can the Buyer Back Out of the Extension of Stay?

Yes. Either the buyer or seller can cancel the Temporary Extension of Stay agreement at any time before the HDB Resale Completion Date. It's crucial to include provisions in your private agreement outlining the process for cancellation and any potential compensation involved.

How to Terminate an HDB Extension of Stay?

An Extension of Stay automatically terminates after three months. However, if you need to terminate it earlier, the buyer must inform HDB officially. This can be done online through My HDBPage or by contacting the HDB Branch.

HDB Temporary Extension of Stay Agreement Template

You can download the HDB Request agreement template for Temporary Extension of Stay form here.

Final Advice for Sellers and Buyers

To avoid potential disputes or misunderstandings, it's the seller's agent must inform the buyer about the need for an Extension of Stay as early as possible in the transaction process. Ideally, this should be done before the buyer views the flat or makes an offer.

Open communication and transparency are crucial throughout the process. Discuss the reasons for the extension, the proposed duration, and any associated costs or responsibilities.

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References

1- Temporary Extension of Stay | HDB