If you are a first-time seller or buyer, the term ‘extension of stay’ would sound alien to you.
While most sellers or buyers are usually focusing on the price of the property, this clause in the contract should not be overlooked.
As an agent, I am entrusted to serve my clients to achieve not only the optimal price but also a smooth transaction in the whole property process.
Sometimes, there are also deals where we have to forgo the highest price offered as a result of a non-agreement of the temporary extension of stay.
So what is an extension of stay and why is this important to note?
What is a Temporary Extension of Stay?
For HDB transactions, you can arrange an agreement with the other parties for a temporary extension of stay in the flat for up to 3 months after the resale completion.
A temporary extension of stay is usually required when the seller needs more time to move out.
For example, renovation time needed for the next place.
In any case, HDB must be informed and the seller must have to be committed to buy a completed property in Singapore.
Conditions for flat sellers by HDB
To be eligible for the temporary extension, you must:
- Have committed to buying a completed property in Singapore at the time of the resale application
- Not be renting out the whole flat at the time of resale application
- Be the contra party if the transactions are under the Enhanced Contra Facility
The temporary extension of stay is regarded as a private arrangement between the flat sellers and buyers.
Protecting the interests of all parties
In my case, I would draft an agreement form for both parties to sign.
This is to protect the interest of the parties I’m serving.
In most cases, the sellers will bear the cost of the property tax, town council fees, utilities and the $20 administrative fees.
The downside of the extension for buyers
From the day of the resale completion date, the buyers are the new owners of the flat.
- They will not be able to move in even though they are the legal owners
- As legal owners, the buyers would have to stay paying for the instalments already.
- Their Minimum Occupation Period will commence only after the extension of stay is terminated.
Be prepared for an extension of stay
Most of the time, sellers would need an extension of stay and it is a norm in HDB transactions.
This is mainly because of the logistic issues and it is much easier to request an extension of stay prior to the negotiation.
Sellers who do not need an extension of stay would have likely bought a BTO which has already been constructed or bought another property without needing to wait for their sales proceeds.