HDB SALES TRANSACTIONS (Handling by HDB appointed agents and private individuals)

Mr R. Sinnakaruppan asked the Minister for National Development (a) the rationale for allowing the Housing and Development Board sales transactions handled by appointed agents to be completed in 4 weeks while allowing those transacted by private individuals to take seven weeks and (b) what measures are in place to deal with those appointed agents who misrepresent to the Housing and Development Board on the purchase prices.

The Minister for National Development (Mr Lim Hng Kiang): Mr Speaker, Sir, HDB's target for resale transactions by private individuals is five weeks. In other words, private individual applicants will be given their first appointment about five weeks after the submission of their applications, provided they submit all relevant documents and valuation report together with the application form, as in the case of applications submitted by the listed agents.

Such transactions require one week more than the four-week target for the listed housing agents because HDB will need to do additional checks to ensure that all the documents and valuation reports are in order. In the case of the listed agents, HDB expects these agents to do all these checks before submission to HDB.

On the second part of the Question, listed housing agencies who are found to have misrepresented the resale prices will be:

i) prosecuted under the Penal Code for making a false statutory declaration. The penalty is an unlimited fine and a term of imprisonment not exceeding three years;

ii) debarred from handling resale transactions for a one-year period; and

iii) dropped from the list. HDB will also publicise the delisting of the agency in the mass media.

Mr R. Sinnakaruppan (Kampong Glam GRC): Sir, it was reported in the papers last month that the private individual transactions will actually take seven weeks. I am happy to hear now that the target is five weeks. But I really want to understand why there is still a one-week difference. Are we trying to encourage people to go to an agent? A 1% fee for an agent for a flat, say, in Bishan, which is now $770,000, is $7,700. So it is quite significant. Why can we not make it four weeks for private individuals who submit all their documents on time just as in the case of agents? Why do we not make it the same for both cases? Also, can we not make the punishment for private individuals the same as that for the agents?

Mr Lim Hng Kiang: As I explained in my answer, there is additional processing time required by HDB. The agents do provide a certain level of service and because of this additional processing time individuals will require five weeks whereas the listed agents require four weeks. One week does not make that big a difference. In fact, HDB encourages individuals to do the resale transactions on their own. HDB has been running seminars on Saturday afternoons and they intend to run seminars now on every first Saturday of the month. So individuals who are planning to buy or sell resale flats can book into one of these seminars. HDB will explain the procedures clearly and what is required, and they are welcome to do the transactions themselves. But those who want to engage housing agents must be prepared to pay the commission and we hope the housing agents will provide the level of service expected in earning that commission.

Mr Sinnakaruppan: I agree that one week is not too much of a difference. But I want to make the point that HDB should deal with private individuals as well as agents on equal terms. Let us try and target for four weeks. Secondly, we should publicise what the Minister has said. HDB must publicise more of this to the public so that they are aware because right now they think that their transactions take seven weeks while it is four weeks for the agents and that the HDB is really trying to encourage them to use the services of the agents.

Mr Lim Hng Kiang: That is why we appreciate the Member raising this question here for us to clarify the situation and to explain that HDB does run these seminars. These seminars will also in time be conducted in Mandarin so that the ordinary persons can do these transactions on their own. But if they want to hire an agent, the agent does provide a service by linking a willing buyer and willing seller. We hope the agents would provide that level of service as required.

Mr Sinnakaruppan: How about my question to allow 4 weeks as well for private individuals?

Mr Lim Hng Kiang: As I have explained, there is extra work to be done by HDB when an individual submits an application. Some portion of the work is done by the agent. If an individual does it, he is not doing that segment of the work. So that part is done by HDB, and HDB takes an extra one week.