RESALE OF HUDC FLATS TO HDB

Dr Wang Kai Yuen asked the Minister for National Development (a) whether there is an increasing number of HUDC flat owners opting to return their flats to the Housing and Development Board; and (b) whether the HDB will commit itself to accepting the flats at their original purchase prices.

Mr Teh Cheang Wan: Mr Speaker, Sir, in the past 11 months (July 85 to June 86) 216 HUDC lessees have either written in to sell their flats to the HDB or have made enquiries regarding the sale of their HUDC flats.

Under the lease, the HDB is under no obligation to buy back the HUDC flats at their original sale prices. The HDB did buy back some flats in the past because it was then considered possible to find ready buyers from applicants on the waiting list to purchase the returned HUDC flats. Presently, this is no longer possible as the waiting list is very small, following the withdrawal of many HUDC applications. The HDB has decided not to buy back any more HUDC flats except those which the Board has committed in writing to buy back.

HUDC lessees are now permitted to sell their flats to their own buyers approved by HDB. The resale levy would be waived in these instances.

Encik Abbas Abu Amin (Pasir Panjang): Sir, could the Hon. Minister reconsider the appeals made by those residents who have committed themselves to purchasing private housing and who have been given indications by the HDB earlier that they could sell back their flats to HDB? I believe the number is not that big.

Mr Teh Cheang Wan: Mr Speaker, Sir, it is not possible for HDB to buy back the flats. As I have explained quite clearly earlier, HDB only buys back those flats which HDB has committed in writing to buy back.

Dr Lau Teik Soon: Mr Speaker, Sir, can I ask the Minister, out of the 216 who had opted to return their flats to the HDB, how many were successful; how many belong to the category just mentioned by my colleague, that is, those who had indicated earlier that they have committed themselves to purchasing some other property and have had the permission of HDB to sell the HUDC flat?

Mr Teh Cheang Wan: Mr Speaker, Sir, HDB bought back 40 units of HUDC flats, and HDB has committed in writing to buy back another 26 units of HUDC flats. So HDB will abide by this undertaking.

As for those people, ie, the 216 HUDC lessees less 66, that means the remaining 150 cases, HDB will not be able to buy back their flats. However, HDB has offered them various assistance. Under the HDB rules, anybody who purchases an HDB flat is not allowed to sell his flat in the first five years. In this instance, HDB has waived this restriction to allow these HUDC owners, who want to sell their HUDC flats, to sell their HUDC flats in the first five years of ownership. On top of that, HDB has also waived the levy. Under the HDB rules, HUDC owners who sell their flats to buyers of their own choice have to pay 30% of the selling price to HDB as a levy. But HDB has waived the levy. In other words, HDB has made it easier, very much easier, for these owners to sell their HUDC flats in the first five years.

Mr Heng Chiang Meng (Jalan Kayu): Sir, may I ask the Hon. Minister whether the policy of not buying back HUDC flats would be extended to HDB flats, considering that there are quite a lot of flats unsold and not wanted at this moment in estates like Yishun, for example?

Mr Teh Cheang Wan: Mr Speaker, Sir, HDB made a press release earlier to say that HDB will continue to buy back the HDB flats from those who want to give up HDB flats in the first five years after purchase. The reason is a rational one. HDB buys back HUDC flats because, as I have explained earlier, at that time HDB considered that there was a large waiting list of HUDC flats and the applicants were prepared to buy the old flats which are in a better locality. But at present owing to the large number of withdrawal of HUDC applicants, the waiting list has been reduced to a very small one, and also the people on the waiting list are not prepared to buy old HUDC flats. Therefore, HDB cannot assist the HUDC owners in buying back the old flats and selling them to the applicants on the waiting list. But, as far as HDB flats are concerned, that is, from 1-room flats to executive flats, HDB has a large waiting list of people who want to buy these flats. Therefore, HDB can continue to buy back HDB flats from owners who want to give up their HDB flats within the first five years of their purchase. In fact, this number is very very small, and the waiting list to buy HDB flats is very large. Therefore, this policy will not affect HDB flats from 1-room up to executive flats.

Dr Koh Lam Son (Telok Blangah): Sir, may I ask the Minister whether he personally was aware, before his announcement of the "no buy-back policy", that there were HUDC owners who had committed themselves to buying property in the private sector not based on written consent from the Ministry but based on verbal assurance, which was the standard practice before his announcement? If this is the case, would he not at least feel partly responsible for the plight that these people have found themselves in today?

Mr Teh Cheang Wan: Mr Speaker, Sir, the Government's policy is based on the written undertaking. It is not possible for Government to ---

Mr Jeyaretnam: You don't honour your oral statements.

Mr Teh Cheang Wan: Mr Speaker, Sir, for all HDB dealings on the buying back of flats, if the owners go to the HDB Area Office to make enquiry about the procedures, the HDB officer will inform them about the procedure adopted by HDB. And if they want to sell their flats back to HDB, what they should do is to get a written undertaking by HDB to buy back their flats. And as I have mentioned earlier, there are 26 cases where HDB has given the written undertaking to buy back these flats, and HDB will abide by that written undertaking.

Mr Philip Tan Tee Yong (Paya Lebar): Sir, I declare my interest in that I have an HUDC flat.

Can the Minister explain why HDB adopts a separate practice for HUDC which is governed and restricted under the same rules as the HDB flats?

Mr Teh Cheang Wan: Mr Speaker, Sir, as I have explained earlier, under the HDB rules HDB has no obligation to buy back any flat. In fact, anybody who looks at the HDB Sales lease will understand that. There is no provision for HDB to buy back the flat. HDB is only buying back the flat as an assistance to the HDB owners. As usual, this is the Government's policy to assist --- 12 noon

Mr Speaker: Order. End of Question Time*, Mr Teh.

*Pursuant to Standing Order 21(2), Questions Nos. 20 and 21 remaining on the Order Paper accordingly stood over to the next sitting of Parliament, as signified by the Members concerned.