While for some, undergoing an en bloc sale (whether you’re in an HDB or private property) can be extremely inconvenient and headache-inducing, for others, it can be the payday they’ve been praying for. Especially since a successful en bloc could result in a huge windfall, like the recent one for Dublin Lodge that launched with $67.55 million.
However, with only 4% of all HDBs being chosen for the Selective En Bloc Redevelopment Scheme (SERS) since 1995, maybe it’s best you don’t get your hopes up. Regardless of your stance towards en bloc, here’s all you need to know about SERS for HDB dwellers, just in case your block gets selected.
SERS is an urban redevelopment strategy that is essentially the HDB counterpart of en bloc. It happens when the government decides to take over the entire HDB development (usually older ones) to renew or redevelop it.
If your HDB gets selected for SERS, you’ll be relocated to a new HDB replacement site with a new 99-year lease, or other housing options like a Build-To-Order flat or a resale flat according to your preferences. On top of getting compensated, the price of the replacement site unit will also be sold at a subsidised rate to owners.
For most, they would believe that getting selected for an en bloc would be akin to striking the lottery, as they will be compensated handsomely. As the government is buying over your flat, they will compensate you according to market value. You’ll also get a SERS grant and fee waivers, essentially making it a lot more affordable than when you move on your own.
Aside from the monetary compensation, it also means getting a new flat that comes with a new 99-year lease, usually within the same neighbourhood, and sold to you at a subsidised rate. Though some may think of it as an unnecessary hassle, others would be excited about the idea of a new home.
You’ll be compensated based on the valuation of the house at market value, which could depend on factors like the floor of the unit, renovations done to the home, size and type of the unit, length of lease remaining as well as past transactions done in the area.
On top of that, you’ll be given a S$30,000 SERS grant to offset the price for your replacement flat, S$10,000 for removal allowance, and compensated for stamp duties and conveyancing fees. Additionally, if you’re planning to renovate your new home, you can also request up to $35,000 to offset the costs.
The term ‘en bloc’, also known as collective sale, originated from French, and translates to ‘as a whole’ or ‘in a block’. En blocs are only for private properties, where the government or a property developer wants to buy over the property for redevelopment. The HDB counterpart is known as SERS.
In the case of an en bloc, both the property developer and residents can initiate one, so if you think your property is worthy (and want some extra cash), you can gather up willing parties and create an en bloc committee. Residents living in the property chosen for an en bloc are also compensated above market value, which can go up to millions, making it highly coveted.
Before we jump into the factors that determine whether your HDB flat will be chosen for the next SERS, here are the latest HDB flats that were selected in past years, with the most recent being in 2018.
For your flat to qualify and be selected for SERS, it should be 50 years and older. This is so the government can renew it or redevelop the land. So if your flat is still relatively young, tough luck!
Aside from being old, your flat also has to be situated in a good location for the government to deem it worthwhile to redevelop the plot of land. One good indicator would be its proximity to an MRT station – one of the top factors of fetching a good flat price.
More often than not, flats chosen to undergo SERS are not efficiently used. This could mean that the blocks are located too far apart or are low-rise, typical of older HDBs that were constructed way back. In these cases, the government would be more incentivised to take over these developments and rebuild them to become more densely packed and well-utilised.
If you’re starting to get hopeful about your block getting selected, I’ll have to burst your bubble. The likelihood of that is pretty slim since SERS follows strict criteria and is subjected to the availability of a replacement site as well as the government’s financial capabilities.
But if you’re currently on a house hunt, you can consider purchasing a BTO flat. BTO flats are known to have a potentially high profit margin since they are new, and would also typically be cheaper to renovate. Aside from that, resale flats are also a strong contender since you can get them a lot sooner than a BTO flat. However, if you’re tight on finances, maybe it wouldn’t be a good idea to opt for one now due to the sky-high COVs that might eat into your budget quite a bit.
First things first, you’ll receive a notification that your HDB flat has been selected to undergo SERS.
A SERS exhibition will be built near your home. Feel free to visit the exhibition and fire away with any burning questions that you have. You’ll also get to learn more about the entire process of SERS and what you can expect.
Knock knock! A valuer will come down to your flat to access its value, which will then determine the amount of compensation you receive from the government. (Quick tip: keeping your house tidy and neat can help to bump up your valuation.)
Head down for your appointment at HDB Hub, where you’ll meet the HDB officer-in-charge who will perform the Collector’s Inquiry. This is when all the necessary paperwork is carried out to validate you as the owner of the flat. The officer will also go through financial planning with you for the flat replacement, and conduct a survey to help the government decide which replacement flat will best accommodate your needs.
You’ll go through a precinct survey to decide what kind of facilities and amenities you want to have in your new neighbourhood. You’ll also get the chance to name your new flat!
HDB will inform you of the amount of compensation you’ll receive.
At this stage, you can select your rehousing option (replacement site, BTO or resale) with the HDB officers helping you through every step of the way. Instead of the SERS housing benefits that you’re entitled to, you can choose to receive an ex-gratia payment of up to S$60,000 instead.
For those who prefer to move to the designated replacement site, this is when you can register for a new flat by submitting an application.
We all know that the community is more important than the flat itself. So If you’ve got neighbours you can’t bear to leave behind, don’t fret. Under the Joint Selection Scheme, you and six households can select the flat on the same day to continue living close to one another.
Head down to HDB for an appointment to book your new flat. Don’t worry if you don’t have much information – sales brochure, price lists and balloted queue numbers will be provided before you select your new home.
Finally, it’s key collection day! Head down to HDB Hub to collect your key and make payment for your new flat. You can use the money that you received as compensation for the SERS acquisition.
Do note that you’ll also have to pay off your outstanding loans and top up your CPF if any of these funds were used to help pay for your current flat. You can also submit a request at this stage to offset up to $35,000 of the renovation costs for your new home.
After you’ve collected your key, you have up to four months to renovate and move into your new flat. When you return your SERS flat, you’ll also receive the balance compensation (if any). Congratulations on your new home! The whole process is finally complete.
Text: Deborah Gan/SingSaver
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