What happens to your BTO when you divorce?

young Couple stress and  sitting on the sofa
young Couple stress and sitting on the sofa

It is extremely bad when young people start using Build-To-Order (BTO) flats as a time gauge for when to get married. A commodity when taken as motivation to enter a lifelong commitment with someone instead of when they are ready, can create problems like divorce.

In fact, more people in Singapore are getting divorced as of 2016. Although it is unfair to suggest that all this is a result of people jumping the gun to buy a flat before they tie the knot, it doesn’t do anyone any favours to ignore this as one reason.

Therefore, the elephant in the room is what happens to the BTO flat when people decide to go through with a divorce?

HDB has several contingency plans in place to ease an already troublesome matter and if you are taking this path in life, then it behoves you to understand the process and the criteria.

Most couples expect to sell the flat and have the proceeds split down the middle however, this is unlikely to happen, regardless of whomever has paid more for the flat. Mitigating factors like daily home maintenance, grocery buying, even cooking may affect who gets what, in court.

Going through a divorce is already hard enough without having property to fight over

Going through a divorce is already hard enough without having property to fight over

The first thing HDB will determine is if the flat is a matrimonial asset. If the flat was purchased during your marriage or under the fiancé-fiancée scheme, then it is a matrimonial asset.

The second critical thing is the fulfilment of the Minimum Occupation Period (MOP). If your flat has failed to fulfil the MOP of five years, neither party will be allowed to retain or sell the asset. Instead, HDB reclaims the flat at whatever the prevailing price is at the time of the divorce.

In addition, the divorce must not be a result of non-consummation and/or an annulment. The difference between a divorce and an annulment is that a divorce is a legal dissolution of the marriage whereas an annulment treats the marriage as if it never happened. If your marriage is annulled, then the flat must be returned to HDB at the prevailing cost.

Simply said, if you wish to retain the right to sell the flat, then it must be a matrimonial asset with the MOP fulfilled and the marriage consummated.

The pair must then understand that the proceeds will not be an equal split. If both parties are unable to agree on a proper division of the proceeds, then the court will step in. Under section 112(2) of the Women’s Charter, there are also several prevailing factors that the court will take into consideration when coming to a decision.

Things like contribution one has made to the family in terms of welfare, caring for an aged parent, as well as any costs put toward maintaining and improving the home. This is not a completed list by far but it should give people an idea of what the court will consider when determining the fairness of the split.

Basically, even if one party had made full payment alone for the asset, the other party by taking care and maintaining the household, will not go empty-handed. The division won’t be affected by cost alone, but also effort.

Retaining the flat

If either party wish to retain the flat, then the criteria is less complicated but no less decisive. You stand the chance of retaining the flat as long (1) your parents’ name was originally listed in the application or (2) you have custody of your child.

The party that has custody of the child will more likely be the one whom retains the flat. The child’s needs, along with either party’s financial ability will also factor into the division of the flat.

If neither option is applicable, then the party that fulfils the Single Singaporean Scheme will be able to retain the flat.

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