Divorce as you Approach the 3-year Mark: Understanding what Happens to your BTO Flat if MOP is Not Reached?

When approaching the three-year mark in marriage and contemplating divorce in Singapore, one primary concern might be your jointly owned Build-to-Order (BTO) flat, especially if you still need to meet the five-year Minimum Occupation Period (MOP).

MOP is generally a period of five years during which a couple must occupy the flat. The flat cannot be sold or rented out entirely during this period.

Understanding what can happen to your flat during a divorce is crucial.

Returning the BTO Flat to HDB

As a general rule, if MOP has not been met, you will need to surrender the flat to the Housing and Development Board (HDB). The return isn't typically at market value but at a price determined by HDB, which may be lower than the original purchase price, resulting in a potential financial loss.

Read more: What Happens to My HDB Flat if I Divorce Before MOP?

Children's Welfare and Flat Retention

If you have children from the marriage, the party granted care and control of the children may be a relevant factor. HDB may allow the flat to be retained by the parent who is granted care and control, provided the parent fulfils the eligibility conditions, such as being able to secure a mortgage loan on their own.

Retaining the Flat under Singles Scheme

If one party qualifies for the Singles Scheme – be at least 35 years of age and a Singapore citizen – HDB may permit them to take over the flat. However, certain factors need to be met under this scheme, including specific income requirements.

Read more: The Cost of Defaulting on a BTO: Breakdown of a Breakup

Division of the Matrimonial Home

In situations where the flat can be retained by one party, the matter of compensating the other may arise. Generally, the person keeping the flat must buy out the other's share. This division is either mutually agreed between parties or determined by the court order during the division of matrimonial assets.

Read more: Home After Divorce: Who Retains the HDB or Private Property?

Outstanding Housing Loan

If there's an outstanding housing loan with HDB or a bank, both parties continue to be responsible for servicing the loan until it is taken over entirely by the other party. This aspect further complicates the decision-making process during a divorce.

HDB Discretion and Legal Advice

HDB has the discretion to make decisions in these matters, and their rules and regulations can change over time. It is therefore advised to consult with HDB when facing such circumstances.

Read more: Can I Force the Sale of my House in a Divorce?

Divorce, especially before the MOP is completed, can be complicated. Understanding what happens to your BTO flat can help prepare for the possible scenarios and implications.

Our divorce lawyers at GJC Law can help you understand your rights and responsibilities fully and to help guide you through the property division process. Remember, while it's a challenging journey, having clarity on property matters can alleviate some of the stress involved.