Will your HDB BTO key collection date be delayed, and can you further defer?

Since the circuit breaker came into effect on April 7, 2020, construction works on HDB flats, and other HDB upgrading projects were halted. For those awaiting their HDB flats, this will likely result in a delay the HDB key collection dates.

Here are some things to note if we are wondering when our HDB key collection date will be, and whether we have an opportunity to delay it if we have been impacted by Covid-19.

Phased re-opening of construction sector in the first place

While Singapore will exit the circuit breaker in three phases, the Building and Construction Authority (BCA) states that construction work will be allowed to commence from 1 June 2020. However, it will similarly resume in a phased approach.

From the start, only time sensitive and safety-related construction projects, such as the MRT and sewerage tunnelling, would be prioritised.

BCA further states that it expects a total of only 10 per cent of the construction workforce to resume work in June.

Logically, this would not initially include HDB projects, and those waiting for their key collection dates should expect more than the two-month circuit breaker delay. HDB will also gradually resume its customer-facing services and operations.

To this end, HDB has announced that “some BTO projects to be delayed by up to 6 months beyond their original Estimated Completion Dates”.

Estimated completion date vs delivery possession date

When we buy our HDB BTO flats, we will typically see an Estimated Completion Date and an Estimated Delivery Possession Date. Often, we take it for granted that we will receive our HDB key collection date slightly before the Estimated Completion Date.

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The Estimated Completion Date or Probable Completion Date (once we purchase the HDB flat) is simply what its names suggests – a likely date that we will get our HDB BTO, but one that is not guaranteed.

Often, the Estimated Completion Date will be close to one year earlier than the Delivery Possession Date.

With Covid-19 impacting construction works, we should accept that there is likely to be a delay in completing HDB BTOs by the Estimated Completion Date.

What is more or less guaranteed is the Delivery Possession Date or “the date that the HDB is required under the Agreement for Lease to deliver the possession of the flat. Applicants will be informed of it during the Signing of the Agreement for Lease.”

Given the current situation, we should view put more emphasis on being able to wait till the Delivery Possession Date of our HDB BTO.

Can we defer our HDB key collection date?

While we can take reference of the Estimated Completion Date for our key collection, we will typically be given an advance notice or five to seven working days for the actual key collection appointment.

There may be diverse reasons we cannot take possession of our HDB flat, including facing financial difficulties, being retrenched, having our pay cheque cut or being insecure about holding down our current job due to Covid-19.

There could also be a host of other reasons such as not getting married yet or because we haven’t sold our existing HDB flat to pay for the new HDB BTO.

According to the example on the HDB website, deferring for eight to 10 weeks (or even slightly longer) for a legitimate reason or one that leads to an ideal outcome of being able to take possession of the flat will likely be considered.

What happens if we are not in a position to take possession of our HDB BTO? 

According to HDB, those who need to change the appointment date should do so within one month from the date of the original appointment. HDB will look into any request to defer the key collection beyond one month on a case-by-case basis.

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Once we receive HDB’s Notice To Collect Keys to Booked Flat or Notice to Make Payment for Booked Flat, we have one month to take possession and make any remaining payment.

If we do not do so, we will have to pay interest, at the prime lending rate per annum with an additional 2 per cent per annum, on the unpaid amount.

HDB also recommends we contact them early if we need to extend our key collection date.

While any decision is entirely at HDB’s discretion, as Covid-19 has significantly disrupted people’s job security and financial standing, we believe HDB may be more open to helping such individuals.

Even if HDB can help individuals facing financial constraints, they cannot hold our HDB BTO indefinitely.

Typically HDB will treat the agreement as repudiated if the balance and interest is unpaid for more than 14 days (or more if HDB is able to grant you a longer deferment) after the expiry of the due date (of one month) for payment.

In such a situation, 5 per cent of the purchase price may be forfeited from the downpayment.

ALSO READ: HDB resale levy: What second-time flat buyers need to understand before buying another flat

Completing your MOP quick if you intend to sell your flat

While there may be concerns about deferring our key collection date, we can start serving out the 5-year Minimum Occupation Period (MOP).

This can be advantageous especially if we are planning to sell the property as soon as we can in the future, as our flat becomes one of the first few to go on the market within our estate.

However, one of the disadvantages is that those who are collecting their keys soon may continue to face difficulties in getting their homes renovated until workers and contractors can travel in from Malaysia as well as having to compete with any pent up demand in the current months.

This article was first published in Dollars and Sense.