20141123 HDB lessees should not contribute to sinking fund

There is no such thing as ownership of public property by citizens, HDB flats included.

Our HDB flats are all on a 99-year lease and it is stated clearly on the lease agreement. ‘Owners’ are in fact ‘lessees’.

It is precisely we are lessees that we DO NOT have any control over our ‘asset’. The thousand-and-one-forever-being-tweaked rules pertaining to public housing are dictated by HDB because HDB is the owner.

‘Owners’ are in fact ‘lessees’ as stated in our LEASE agreement. (below)

And the ‘lessor’, as stated, is of course the HDB.

What would happen if the PAP government had not redefined, through legislation, ‘lessees’ as ‘owners’?

According to Wikipedia, Singapore’s home ownership rate of 90.5% ties with Hungary in third place. But if all the 872,411 HDB owners (page 11, excluding rental units) are correctly classified as lessees, Singapore would become the country with the lowest home ownership rate in the world!

The main issue is not the embarrassment of having the lowest home ownership rate but HDB lessees being transformed into owners and made to pay monthly contribution to the town council’s sinking fund. (The sinking fund is used to “fund major repairs and maintenance” and co-pay for the Lift Upgrading Programme.)

As lessees, we should not be required to pay for lift upgrading and repair/maintenance of HDB assets, just as landlords do not require tenants to pay an additional amount for maintenance of the unit/room, household appliances, etc.

HDB lessees are being shortchanged, contributing to the maintenance of HDB assets but with the government retaining control of citizens through its control of public housing.

The question of the true ownership of HDB flats was posed to the HDB without any satisfactory/logical answer.

On 29 May, I queried the HDB on the status of ownership. HDB replied that “basically lessee/owner means the same. HDB (the lessor) has granted the lease to you (lessee).”

A lessor could be the owner of the property but lessee = owner ? Really?

On 8 June, I wrote to Dr Cheong, HDB CEO, for a clarification. A few days later, HDB legal counsel clarified and stated:

– HDB “lessees” are “owners” of their flats.
– “owner” has been defined in the Housing and Development Act (not the conventional meaning)

In other words, we are owners only after being legislated as such. Clearly we are pseudo owners. This is uniquely Singapore where the government could anyhow claim citizens are owners but with total control of HDB flats retained by the PAP government.

This reminds me of our CPF which has been legislated as Singapore’s foreign reserves. So CPF is our money but the PAP also has total control over how it is invested and how much (low) CPF members should be paid.

Conclusion

HDB ‘owners’ are in fact ‘lessees’. The PAP uses legislation to redefine the status of ownership. HDB is the lessor/owner of public housing flats.

The PAP has abdicated its responsibility to maintain public property at the stroke of a pen, forcing HDB lessees to contribute to maintaining public property and common areas.

HDB lessees should also not be made to contribute a single cent to the sinking fund to maintain HDB assets.

Advertisements
This entry was posted in HOUSING, POLITICS. Bookmark the permalink.

6 Responses to 20141123 HDB lessees should not contribute to sinking fund

  1. Xmen says:

    When the lease has fewer than 30 years remaining, even the “owner” will awaken to the fact that his time is up! It will be interesting to see the political ramifications when sufficient “owners” recognize the fact.

  2. James says:

    No, X-men, you are wrong. An HDB apartment is potentially “worthless” when the lease falls below 65 years. Reason? CPF Board will not release CPF funds for the purchase of such flats (the only exception being new studio flats) and the banks naturally adopt the same approach for loans. Not many people are aware of this. Up till now, they were able to avert a crisis through a device known as Selective Enbloc Redevelopment. But it is highly doubtful if they can continue with this for much longer as each precinct of flats have become more and more dense. So what will happen to flat owners when their lease runs down? Think about it.

    • Xmen says:

      I am unaware of the 65 years rule. If it is true that potential buyers can’t use CPF or obtain bank loans to purchase such flats, they will have lower resale values, perhaps by as much as 10% below the market price. I assume such restrictions were designed primarily to motivate Enbloc sale, and will be lifted when there is no demand for such sale.

  3. abc says:

    Lessee = Owner only in legislation of HDB and IRAS. Purely as excuse to collect fees which would otherwise only apply to owners:
    HDB –> Town councils –> Conservancy fees
    IRAS –> Property tax

    However in the REAL LAW as practiced in s’pore’s court of law, Lessee = Lessee and Owner = Owner.
    In over 50 years of HDB history, I have never come across any court case where HDB lessee is acknowledged as “owner”. All court cases regarding HDB flats spell out your true position: LESSEE.

    Because HDB buyers are only Lessees, this is why you:-
    1) Have to wait 5 years before renting out “your” flat.
    2) Have to pay regular admin fees to HDB in order to rent out “your” flat every 1.5 years.
    3) Cannot rent to whoever you like — must follow quota.
    4) Must follow cap on number of tenants as specified by HDB.
    5) Must write in & seek permission if you want to use “your” flat as office — you can bochap, but if discovered, HDB can punish you.
    6) Cannot fence up “your” HDB neighbourhood.
    7) Cannot have your own swimming pool or tennis courts.
    8) Cannot have security guards to patrol your estate.
    9) Can have strangers and foreigners loitering in your void decks and outside your corridors — these are public property and any tom, dick, harry can smoke, gamble, fight & sleep there.
    10) Cannot declare your own en-bloc together with neighbours when property market is hot.
    11) Instead HDB will declare their own SERS when they feel like it, and whether you want or not. SERS compensation is based just on market valuation & definitely less than what you can get if you are allowed to en-bloc on your own.

    • phillip ang says:

      🙂 I found this article written by a HDB legal officer stating clearly our ‘lessee’ status. (link below)
      http://www.lawgazette.com.sg/2000-9/Sep00-focus3.htm
      There is really nothing we can do but continue to pay and pay as Parliament has been silent for decades. Hope you could share and educate fellow HDB ‘owners’ on our real status. We have been overpaying for decades to be controlled!
      Thanks.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s