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Property: What happens to the BTO flat when a couple splits up?

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Wedding bells are ringing, and BTO prices are good. Seems like a great time to apply for a house, doesn't it? While we can never predict if a couple may be happily attached today but break up the next, one thing is for sure: never base your relationship on the availability (and price) of a flat. 

In 2013, figures show that over 22 per cent of those who applied for a BTO house in 2009, had cancelled in the next four years. So what happens to the 5 per cent down payment (paid when buyers signed the Agreement for Lease) when a couple has broken up? Unfortunately, this means nursing a broken heart as well as a burn in the pocket. 

“For buyers whose flat applications are cancelled after they have signed the Agreement for Lease (which sets out the sale terms of the HDB flat for buying a flat) and paid the down payment, an amount equivalent to 5 per cent of the flat purchase price will be forfeited,” says the HDB.

In addition, the buyers will not be allowed to apply or be included as an essential occupier for a new HDB flat/DBSS flat/Executive Condominium unit or a resale flat with housing grants, within one year from the date of cancellation. Effective for sales exercises from March 2012 onwards, this is to prevent “frivolous” flat-buyers from hogging spots in the queue.

If the couple are first-timers and had been given an Additional CPF Housing Grant (AHG) and/or Special CPF Housing Grant (SHG), they also have to return the full amount of the AHG/SHG with interest. This has to be paid up before you can apply or be included as an essential occupier for a new HDB flat/DBSS flat/ Executive Condominium unit or a resale flat with housing grants, in future. Also, the buyers' household status (i.e. first-timer or second-timer) will be assessed at the time of your application for a new HDB flat/DBSS flat/Executive Condominium unit or a resale flat with housing grants.

Desiree Lim, 23, and her boyfriend Jason Ong, 25, had applied for a BTO flat near her parents’ place, but broke up months later. That decision will cost them a five-figure sum as they’d already chosen their flat and made their down payment. “We should have considered more carefully before we applied. Since new housing projects don’t come by often, especially near my parents’ place, we felt the pressure to quickly apply for it,” reflects Desiree. “The sad thing is that this is pretty common among couples.”