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What Are the Differences Between the 3 Types of Occupants in a HDB Flat?


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Applicant, Essential Occupier and Occupier


Introduction

Often, people are confused with the terms used in HDB transactions. They are very different and the public should know what does each term mean. We will be covering the differences between applicants, essential occupiers, occupiers and occupants (not exactly a category).


Applicant

Applicants, or co-applicants, are the owners of the flat. They will need to qualify for the flat, qualify to use all the sources of finances like loans and CPF savings, and actually pay for the flat. They are also fully bounded by conditions like the Minimum Occupation Period (MOP). They can choose to hold the flat either in Joint Tenancy (JT) or Tenancy-in-Common (TIC). Applicants and co-applicants also have both the legal interest and the equitable interest when their mortgage is fully redeemed.

Applicants and co-applicants are actually ranked equally. However, the main applicant is almost always the Singapore Citizen (SC). It is called main applicant for the ease of identifying the main qualifying person since eligibility schemes, grants and HDB loans primarily requires a SC.


Essential Occupier

The essential occupier is not the owner of the flat, but they need to fit into the eligibility schemes and its condition because they help the applicant to qualify for the purchase of the flat. Without essential occupiers, the applicants would not have been able to make the purchase (or take grant, retaining the flat or take HDB loan) themselves. They are seen like an owner when decisions are made on the flat (ie buying, selling, retaining a flat, taking a grant, taking a HDB loan, fitting into an eligibility scheme etc). If an essential occupier leaves the household, the applicant also loses the ability to retain the flat. Essential occupiers usually help the applicant form a family nucleus. Apart from that, they have got no other rights or obligations. Essential occupiers are not liable to a loan, they cannot take a grant (so there is no subsidy opportunity being used up), they cannot use their CPF OA savings to help finance the flat. However, if the cash is shared among a couple, there is no reason why the essential occupier will not want to help the applicant finance the flat to reduce the loan. Essential occupiers have no legal interest but has equitable interest. Essential occupiers are also bounded by the MOP.

Essential occupiers are usually the spouse, unmarried child or the parents. For example, under the Non-Citizen Spouse Scheme (NC Spouse Scheme), the non-citizen (NC) is the essential occupier of the main SC applicant. Without the NC spouse, the SC would not have qualified under this scheme.

The status need not change even when the circumstances changes. For the NC Spouse Scheme, even if the NC becomes a SC eventually, they can continue to be an essential occupier if everything remains the same (ie not taking citizen top-up grant etc). Under the public scheme, even if the unmarried child becomes of a legal age now, the child need not change the status to an applicant. It is only at the time of purchase, if a person can be an applicant or an essential occupier, they must be the applicant.


Occupier

An occupier is not the owner of the flat. They do not need to fit into the eligibility schemes and cannot finance the flat. They cannot take grant (subsidy opportunity is not used up), loan, or use their CPF savings to pay for the flat. However, if they have cash, they can give it to the applicant to pay for the flat. This is not usually recommended as the occupier does not have any legal interest in the flat. An occupier has equitable interest in the flat.

For SPR households, all SPR occupiers will also need to be SPR for at least 3 years before they can be listed as an occupier. It would help greatly if SPRs have relatives who are SC that are able to take them in. All occupiers in a SPR household must also not have any interest in any private property.

For a SC household, if Minimum Occupation Period (MOP) is not reached, the proposed occupiers can be an ex-owner of private property (does not matter when the private property was sold), but still cannot have any interest in private property. If MOP is cleared, then proposed occupiers can own private property for investment purposes. SPR occupiers in a SC household will be able to own a private residential property for investment and continue to be an occupier of the HDB flat that has already completed the MOP.


Occupants

Occupants are actually not a separate group of people. Instead, it is the supra group of applicants, essential occupiers and occupiers. As long as a person physically stays in the HDB flat, the person is an occupant. It does not matter if the person is an applicant, essential occupier or occupier.


Conclusion

This article is aimed at addressing the differences between terms like applicants, essential occupier, occupier, occupants. As the HDB website uses these terms very frequently, readers should read carefully on the people that HDB is addressing. Normally HDB also refer essential occupiers as occupiers. If HDB says about occupiers, it includes essential occupiers. If they specifically mentioned essential occupiers only, then only the essential occupiers are affected and the occupiers are not included.



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Applicant, Essential Occupier and Occupier


Introduction

Often, people are confused with the terms used in HDB transactions. They are very different and the public should know what does each term mean because every Singaporean needs a home to live. We will be covering the differences between applicants, essential occupiers, occupiers and occupants.


Applicant

Applicants, or co-applicants, are the owners of the flat. They will need to fit into the eligibility schemes and its conditions, and they have to finance the flat. This means that they can take bank loan or HDB loan (if eligible), take grants and consequently use up one time subsidy opportunity, use their savings from CPF Ordinary Account (CPF OA). However, they can choose to hold the flat either in Joint Tenancy (JT) or Tenancy-in-Common (TIC). If they are Joint Tenants, the loan is taken jointly. If they are Tenants-in-Common, they can each take their own loan. Applicants and co-applicants also have both the legal interest and the equitable interest when their mortgage is fully redeemed. Obviously, they are also bounded by the Minimum Occupation Period (MOP).

Applicants and co-applicants are actually ranked equally. However, the main applicant is almost always the Singapore Citizen (SC). It is called main applicant for the ease of identifying the main qualifying person. For example, in a SC-SPR combination, the SC is the main applicant because most of the application, whether it is HDB loan, eligibility schemes, grants etc requires a SC. Even in a SC-SC combination, it is easy to identify since the main applicant is always a SC. For a SPR-SPR household, then one of the SPR is obviously the main applicant. The bottom line is, the main applicant and the co-applicant have equal rights.


Essential Occupier

The essential occupier is not the owner of the flat, but they need to fit into the eligibility schemes and its condition because they help the applicant to qualify for the purchase of the flat. Without essential occupiers, the applicants would not have been able to make the purchase (or take grant, retaining the flat or take HDB loan) themselves. They are seen like an owner when decisions are made on the flat (ie buying, selling, retaining a flat, taking a grant, taking a HDB loan, fitting into an eligibility scheme etc). If an essential occupier leaves the household, the applicant also loses the ability to retain the flat. Essential occupiers usually help the applicant form a family nucleus. Apart from that, they have got no other rights or obligations. Essential occupiers are not liable to a loan, they cannot take a grant (so there is no subsidy opportunity being used up), they cannot use their CPF OA savings to help finance the flat. However, if the cash is shared among a couple, there is no reason why the essential occupier will not want to help the applicant finance the flat to reduce the loan. Essential occupiers have no legal interest but has equitable interest. Essential occupiers are also bounded by the MOP.

Essential occupiers are usually someone very close to the main applicant. They are usually the spouse, unmarried child or the parents. For example, under the Non-Citizen Spouse Scheme (NC Spouse Scheme), the non-citizen (NC) is the essential occupier of the main SC applicant. Without the NC spouse, the SC would not have qualified under this scheme. Another example is the public scheme for single parents. Parents who are divorced or widowed and have children with full legal custody under 21 years old can purchase a flat and the underaged child is the essential occupier. However, if the child is unmarried and above 21 years old, then the child needs to be a co-applicant.

The status need not change even when the circumstances changes. For the NC Spouse Scheme, even if the NC becomes a SC eventually, they can continue to be an essential occupier if everything remains the same (ie not taking citizen top-up grant etc). Under the public scheme, even if the unmarried child becomes of a legal age now, the child need not change the status to an applicant. It is only at the time of purchase, if a person can be an applicant or an essential occupier, they must be the applicant.

Since we are at this topic, we will also talk a little on family nucleus. Parents and unmarried children is a family nucleus. Spouse can also form a family nucleus with a person, even without children. Unmarried siblings themselves cannot form a family nucleus unfortunately. Married child and the parents is considered 2 different family nucleus because the married child is also responsible for the spouse. In fact, the system sees a spouse to be closer than a parent/child because when possible, the spouse should be the co-applicant instead of the parents/children. The married couple is usually seen as one entity. A person cannot let his/her parents/children be the co-applicant if the spouse can be a co-applicant as well. It is only when the spouse do not qualify to be an applicant and there are no other suitable eligibility schemes (ie NC or mentally incapacitated spouse), then the parents/children can be a co-applicant. If the parent/child and the spouse both only qualify to be essential occupier, then the spouse has to be the essential occupier. If the 2 family nucleuses decided to live together (married child, their spouse and the parents) with grandchildren or non-married siblings, then it will qualify as a multi generation family nucleus.


Occupier

An occupier is not the owner of the flat. They do not need to fit into the eligibility schemes and cannot finance the flat. They cannot take grant (subsidy opportunity is not used up), loan, or use their CPF savings to pay for the flat. However, if they have cash, they can give it to the applicant to pay for the flat. This is not usually recommended as the occupier does not have any legal interest in the flat. An occupier has equitable interest in the flat.

For a SC household, if Minimum Occupation Period (MOP) is not reached, the proposed occupiers can be an ex-owner of private property, but still cannot have any interest in private property. If MOP is cleared, then proposed occupiers can own private property for investment purposes. SPR occupiers in a SC household will be able to own a private residential property for investment and continue to be an occupier of the HDB flat that has already completed the MOP.

When we tried to clarify with HDB Officers, the answer we received is that for subsidized HDB flats at the point of purchase, the proposed occupiers must not have disposed interest of private property within the last 30 months. However, when the subsidized flat is within the MOP and you want to add an occupier in, it does not matter when the private property was sold. This also translates to the same meaning as, proposed occupiers can be added in later on even if his private property is disposed less than 30 months ago.


Occupants

Occupants are actually not a separate group of people. Instead, it is the supra group of applicants, essential occupiers and occupiers. As long as a person physically stays in the HDB flat, the person is an occupant. It does not matter if the person is an applicant, essential occupier or occupier.

Be very careful when you want to remove an occupant (may be an essential occupier or occupier) from a flat. If it renders you ineligible in any of the eligibility schemes (mainly formation of family nucleus), you may not be able to retain the flat. If the flat cannot be retained under an eligibility scheme, approval may be granted to surrender the HDB flat back to HDB. The compensation for the surrender is dependent on several factors determined by HDB and it generally will not be higher than 95% of the purchased price.


Conclusion

This article is aimed at addressing the differences between terms like applicants, essential occupier, occupier, occupants. As the HDB website uses these terms very frequently, readers should read carefully on the people that HDB is addressing. Normally HDB also refer essential occupiers as occupiers. If HDB says about occupiers, it includes essential occupiers. If they specifically mentioned essential occupiers only, then only the essential occupiers are affected and the occupiers are not included.



Date first posted on 18 June 2019; Last Edited on 14 July 2019

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