It is a norm for HDB resale flat sellers to request a temporary extension of stay in the resale transaction.
For the terms and conditions of the HDB temporary extension of stay, you can read them yourself:
https://www.hdb.gov.sg/residential/selling-a-flat/resale-application/request-for-temporary-extension-of-stay
We are here to highlight the practical aspect of a temporary extension of stay.
Why do sellers need extension stay?
• Sellers need more time to move out of the existing flat (e.g., renovation of the next property).
• Sellers need the sale proceeds (CPF / Cash proceeds) from the existing flat to finance the next property.
Use our HDB sales proceeds calculator to see how much proceeds you might receive from the sale.
When does the seller need to request an extension of stay?
When a temporary extension of stay is a must-have option for the seller, the seller’s agent should inform the buyers during the enquiry. If the sales conditions don’t match, it is a waste of everyone's time to view the flat.
Pros of a temporary extension of stay
• Sellers have a smooth transition to the next property, this involves HDB resale timeline planning.
• Use CPF funds and cash proceeds from the existing flat to finance the next property.
• The seller saves on moving costs and time; without an extension of stay, the seller may need to move to a temporary accommodation.
Cons of a temporary extension of stay
• The buyer pool can be smaller, which may reduce the seller's negotiation power and take a longer time to sell the flat.
• You have a shorter time to look for your next property if you sell your existing flat first and then buy your next property.
• If your next property is an HDB resale flat, your choice can be limited because the sellers of the flat you are buying may also need an extension of stay.
What is temporary extension of stay agreement?
The temporary extension of stay agreement is a private arrangement between the seller and buyer of the HDB resale flat and is a separate and distinct agreement from the resale transaction. This agreement shall clearly state the period of the temporary extension of stay, the responsibilities of each party, and the compensation in the event either party cancels the extension of stay before the completion date of the resale flat. HDB will not mediate if there is a dispute between the buyers and sellers.
HDB extension of stay dispute
For the seller, the worst scenario is that the buyer cancels the temporary extension of stay before the completion date of the resale flat. In this event, the seller needs to move out of the existing flat before the completion date. Signing an extension of stay agreement is important as it becomes binding for both parties, reducing the chance of dispute.
Bear in mind that the seller is not the owner of the flat during the extension of stay; the seller needs to be responsible for the flat during the extension of stay and make sure the flat is properly handed over to the buyer at the end of the extension.
HDB extension of stay agreement template
There is no standard extension of stay agreement template available; your property agent may help you draft an extension of stay agreement.
To avoid a potential dispute between the seller and buyer, the seller's agent must inform the buyer or buyer's agent that an extension of stay is required by the seller before viewing the flat. Instead of a verbal agreement, have an extension of stay agreement signed by both the seller and buyer.
Learn more about selling your HDB flat smoothly with a temporary extension of stay. Feel free to schedule a non-obligation discussion now!
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