When is cancelling your HDB booking acceptable

Imposing a 1-year ban on those who back out of a HDB booking sounds like a crazy idea for a time when property prices are so high and the demand, driven largely by a growing population, is even higher. One would think HDB would relax more on its policies to ensure everyone has a place to live.

Yet the number of cancellations has increased steadily. Despite demands for homes, many have cancelled bookings based on trivialities such as a preference to live in another area.

As a result of this, flat applicants who cancel their booking will be barred for a year from applying or be included as an essential occupier of an Executive Condominium (EC), Design, Build and Sell Scheme (DBSS) flat, a new flat and a resale flat with housing grants.

Prior to this, flat applicants have to pay a non-refundable booking fee (which will be lost if they back out) when they select a unit and 10% down payment once they’ve signed the Purchase Agreement. This will still be in effect along with the 1-year ban.

HDB is aware that there may be various reasons as to why someone would cancel their bookings and is willing to evaluate the requests to stay the ban on ‘exceptional circumstances’ which are beyond the control of applicants.

As there are no precedents set forth by HDB as to what constitutes an ‘exceptional circumstance’, we can only theorize realistically on situations that HDB may be lenient on.

• Change of layout: During the course of the development, some layout change may occur. If the new layout becomes too small or too cramped for your family and you decide to pull out and bid for another development with a bigger space, this may be considered an exceptional circumstance. In addition, any other significant changes HDB may make to the flats which may affect your living standards can be considered circumstances that are beyond the control of applicants.

• Leaving Singapore: If you have to pull out of your application because you have to leave Singapore urgently, due to temporary job relocation or in the event when a family member overseas is sick, HDB may waive the ban in this circumstance.

• Death: In the unfortunate situation where an essential occupier and/or contributor to the income ceiling pass away, it is realistic to think that HDB will waive the 1-year ban.

It is very difficult to guess what HDB has internally determined to be mitigating factors influencing a waiver of the ban. It is fair to suggest that the above mentioned circumstances would warrant a closer look by HDB.

For those who back out of an application due to marriage issues such as a divorce, HDB may not consider this a circumstance beyond the applicant’s control.

As the Government expects couples to get married and have children to support the economy, having a divorce flies against this intent. As HDB is part of the Government, it is therefore reasonable to expect that they may not consider your request to waive the 1-year ban if you had a divorce.

It is still worth a try to submit a letter to them just in case but realistically, this should not be a valid reason.

The best thing to do is to be sure of your intent to purchase a HDB flat, be it BTO, EC or any of the other variants and stick to it. With a growing population of Singapore Permanent Residents, the demand for public homes will increase and in a bid to cater to the growing number of New Citizens and to some extent, natural born Singaporeans, you can expect HDB to be very strict when it comes to penalizing those who back out of their HDB booking.