- Get your HDB Flat Eligibility (HFE) letter before the seller grants you an Option to Purchase.
- HDB resale uses HDB's prescribed OTP, with an option period of 21 calendar days.
- The option fee is between $1 and $1,000, and the option fee and exercise fee together cannot exceed $5,000.
- Completion is usually around eight weeks after HDB accepts the resale application.
- If you take a bank loan rather than an HDB loan, you will need a private law firm.
Before you look: eligibility and budget
Before a seller can grant you an Option to Purchase (OTP), you need a valid HDB Flat Eligibility (HFE) letter confirming that you are eligible to buy a resale flat. Eligibility depends on HDB's schemes, which look at factors such as citizenship, age, marital status and income. Buyers should also be aware of the Ethnic Integration Policy and the quota for Singapore Permanent Residents, which limit the mix of owners in each block.
This is also the time to settle your financing, including any bank loan approval and how much CPF you can use, because the deadlines start running once you have an OTP.
The HDB Option to Purchase
Unlike a private sale, an HDB resale must use HDB's prescribed OTP. Its main terms are set rather than negotiated:
- the option fee is between $1 and $1,000, as agreed between buyer and seller
- the option fee and the option exercise fee together cannot exceed $5,000
- both amounts form part of the resale price, not an extra charge on top
- the option period is 21 calendar days, counting weekends and public holidays
Other agreements about the sale made outside the prescribed OTP are not valid under the Housing and Development Act, so a side arrangement with the seller should not be relied on. If you do not exercise the option in time, it lapses and the option fee is generally forfeited.
Exercising the option and the resale application
To proceed, you sign the OTP and pay the exercise fee within the option period. The buyer and seller then each submit their part of the resale application to HDB online, quoting the OTP's serial number, and endorse the resale documents when asked.
Once HDB accepts the application, it tells both parties the completion date. Law firm guides put completion at usually around eight weeks after HDB's acceptance. Before then, you will meet your lawyer to go through the money needed and sign the legal documents.
Completion
The sale is completed at an appointment with HDB, after which you take possession of the flat. Buyers and sellers normally attend, but if you have appointed a lawyer, the lawyer can attend the completion on your behalf.
Do you need your own lawyer?
HDB can act in the conveyancing where the buyer is taking an HDB housing loan and no bank financing. If you are taking a loan from a bank or other financial institution, you will need a private law firm, which will usually act for both you and the bank on the mortgage. Some transactions need private lawyers whatever the financing, such as transfers under a divorce court order.
Even where it is not required, you may choose your own lawyer for independent advice. A conveyancing lawyer reviews the OTP, coordinates your CPF withdrawal and bank loan so the money is ready on time, checks the property's title, and handles completion. A seller with an outstanding bank loan needs a lawyer to redeem it and to refund CPF money used, with accrued interest, from the sale proceeds.
When to speak to a lawyer
If you plan to use a bank loan, or your situation is not straightforward, speak to a lawyer before you sign or exercise the OTP. That leaves time to review the terms and line up your financing and CPF before HDB's deadlines begin.
This article is general information on Singapore law and is not legal advice. Rules and agency policies change, and every situation is different. For advice on your own circumstances, speak with one of our lawyers.
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