Housing and Development (Amendment) Bill Second Reading Speech by MOS Desmond Lee at the parliamentary session on 13 April 2015

Apr 13, 2015

1. Madam, Speaker, I beg to move, “That the Bill be now read a second time.”

Objectives of Amendment Bill

2. The Housing and Development Act, enacted in 1960, empowers HDB to carry out its duty to build good, affordable public housing and to provide a safe and pleasant living environment for Singaporeans. The Act may be 55 years old, but we have amended it from time to time. The last time we did so was in 2012and it is timely to update the Act, to enable HDB to better meet residents’ needs and address emerging challenges. In particular, this Bill empowers HDB to better tackle misuse of HDB property, especially when it involves public health and safety concerns to residents. 

Key Clauses in Bill

3. Madam, let me now highlight the key aspects of this Bill. 

HDB’s Entry into Flat to Investigate and Repair

4. Clause 3 of the Bill introduces two new powers that will allow HDB officers to enter a flat to investigate whether any urgent work or repair is required, and if so, to carry out this work. The first, under new Section 26A, permits entry with a warrant obtained from the court. The second, under new Section 26B, permits entry without need for a court warrant, if there are reasonable grounds for believing that there is an imminent danger from within the flat which would affect public health or public safety. Let me explain the purpose of these amendments. 

5. HDB inspects its buildings regularly to ensure that they are safe and in good condition. Homeowners also play an important role in ensuring the safety of their own flats. Sometimes, homeowners, because of ignorance or carelessness, do things that may endanger themselves and their neighbours. For example, they may unknowingly demolish an important structural wall. 

6. In June 2013, a Bishan homeowner and his friend removed part of a structural column while renovating the flat. The owner did not even apply for a renovation permit from HDB. Had he done so, HDB would have told him right away that he could not demolish the structural column because it was critical to the structural integrity of the building. Fortunately, a concerned resident alerted HDB about this. HDB engineers rushed in to prop up the affected beams, and worked throughout the night to reinstate the column. The home owner was prosecuted in court, convicted and fined. His reckless act may have endangered an entire block of residents. 

7. And just a few months later, in Simei, a renovation contractor demolished part of the prefabricated Reinforced Concrete or RC walls by creating 3 openings. This is strictly not allowed, because the RC walls serve as supporting structures of the building. Again, HDB engineers had to rush in to carry out urgent repair works. The contractor was prosecuted, convicted and fined. In both cases, fortunately, the owners had the good sense to allow HDB officers to enter their flats to conduct emergency repair. Had the owners refused entry, for whatever reason, HDB could have been caught in a legal grey zone, and many residents would have been placed in unnecessary danger. 

8. In such situations, it is imperative for HDB to be able to intervene, and intervene quickly. They must be able to investigate and rectify the situation without delay. New Section 26B will give HDB the power to enter the flat for such repair works without the need to apply for a warrant. Members will agree with me that imposing a statutory requirement for HDB to only enter the flat with a court warrant will lose precious hours, when there is severe risk to life and property. 

9. Let me now explain the need for Section 26A, which gives HDB power to enter a flat, with a court warrant, for urgent repair works. This will help to address cases, for example, where ceiling leaks have become serious and urgent, which can be a source of distress and frustration or potential danger for some HDB residents if not resolved quickly. 

10. Currently, when HDB receives feedback from residents on ceiling leaks, HDB will help them seek their upper floor neighbours’ cooperation to investigate and to repair the leak, if they have not already done so. HDB also helps to carry out the investigations to identify the cause of the leaks, on a goodwill basis. Most upper-floor neighbours are mindful of the inconvenience that their lower-floor neighbours face, and will agree to the repairs once they are told of this. To facilitate repairs and early resolution of the leaks, HDB has implemented a Goodwill Repair or GRA Scheme to assist lessees to repair the ceiling leak and to co-pay 50% of the cost of repairing the leak. While the GRA scheme has helped many flat owners resolve leak problems effectively and at a subsidised cost, HDB has encountered some upper-floor neighbours who refuse to co-operate and delay the repair unnecessarily. Over the last four years, on average per year, one in four cases takes more than four months to resolve.

11. For such cases, HDB will engage the upper floor neighbours a number of times to seek their cooperation to carry out the repairs. Grassroots leaders may also be asked to step in to persuade them to cooperate. If all these efforts fail, HDB will have no choice then but to take legal action and apply for a Court Order to compel the upper floor neighbours to carry out the repairs within a specified period. From 2012 to 2014, HDB took legal action against 400 households, after it exhausted all efforts to engage and persuade the upper floor neighbours to cooperate. But, this process of reaching resolution is protracted and can take up to 12 months. In the meantime, the delay could cause the leak to worsen and spread or result in severe spalling concrete, inconveniencing and in some cases, even endangering the safety of the lower-floor neighbours. We hear of many cases of residents who are frustrated and who hope that HDB can do more to help them. 

12. Let me cite two actual cases to give Members a sense of the circumstances where we envisage Section 26A may be used. In the first case, in Yishun, the ceilings in the master bedroom toilet and kitchen were leaking so badly and for such a long time that stalactites had started to form in the toilets. The leaks had also resulted in spalling concrete on the ceiling where the reinforcement bars had been exposed. Now, imagine the inconvenience and anxiety of the lower floor residents. Should the spalling concrete deteriorate further, loose chunks of concrete, small, large, could fall and hurt the occupants. The case remains unresolved since it was reported to HDB in June 2012. And HDB is still trying to resolve this.

13. In the second case, this time in Bukit Batok, the leak from the kitchen ceiling was so severe that the lower-floor residents had to perpetually place pails in the kitchen to collect the water. Similar to the Yishun case, stalactites had formed on the kitchen ceiling. And what started as ceiling leak in the kitchen, because it was not resolved, had also spread to other walls in the living room. For these two cases, HDB and the local grassroots leaders had tried tirelessly to help these residents by persuading the upper-floor neighbours to cooperate, but were met with limited success. It took almost two years for this case to be resolved.

14. The proposed power of entry with a warrant will allow HDB to better help those suffering from serious ceiling leaks, among other things. Prior to HDB’s application for a court warrant for entry, HDB will give the relevant unit 24-hours’ notice at least. Should they still refuse to cooperate, HDB may then apply to court for a warrant to enter the flat to investigate the leak and carry out repairs. 

15. We are mindful that the proposed powers to enter a flat without the owner’s permission can be perceived as a drastic measure. Let me assure this House that HDB will only do so as a last resort, after exhausting all other avenues to get the owner's cooperation. HDB will use these powers sparingly, and judiciously.

16. These powers will also be balanced with proper safeguards. The Bill mandates that only officers authorised by the Board are empowered to enter the flat to investigate and to carry out repair. The officers will be required to show proof of identity to the lessees or occupiers. There will be at least one HDB officer present in the flat during the investigation and repair work, and the officer will be required to show proof of identity to the owners or occupiers of the flat.

Renovation Activities

17. Madam, let me now turn to Clause 4 of the Bill. 

18. From time to time, some HDB homeowners will hire contractors to renovate their flats to suit their lifestyles, tastes and preferences. To ensure that these renovation contractors do not unintentionally, in the course of their work, damage the block or compromise the structural integrity of the building, HDB has in place, since 1975, a Registered Renovation Contractors’ (RRC) Scheme or RRC Scheme to regulate renovation works carried out by renovation contractors in HDB flats. Flat owners who wish to renovate their flats must engage RRCs, who are qualified contractors and should be familiar with HDB’s requirements for carrying out renovations. To complement the RRC Scheme, HDB has also put in place a demerit point system. And, they could also be debarred from carrying out future renovation works in HDB flats. 

19. For more serious cases, HDB will bring the errant parties to court. In 2006, HDB further enacted Rules to govern how renovations should be carried out in HDB flats. Renovation contractors, including those not registered under the RRC Scheme, as well as flat owners would be held accountable for breaches to these Rules. If convicted in court, they face a fine of up to $5,000.

20. While the absolute number of unauthorised renovation works remains small, we observe a gradual increase. In 2014, there were 5 cases of major structural infringements, compared to 3 cases in 2005. Overall, for the 10-year period from 2005 to 2014, there were over 60 cases of both major and minor infringements.

21. We are concerned about this increase in numbers, because any compromise to the structural integrity of HDB blocks can have catastrophic consequences. Hence, Clause 4 of the Bill will amend Section 27, to do three things. First, any security deposit placed by the RRC for contravening any obligation imposed on the RRC in the permit may be forfeited. Second, HDB may impose a financial penalty not exceeding $10,000 on errant renovation contractors and flat owners for contravening any condition of a license, the contravention of which does not amount to an offence. And third, the penalty against errant renovation contractors, including those not registered with HDB, and flat owners will be raised, by increasing the maximum court fine from $5,000 to $20,000 and providing the courts with an option to impose an imprisonment term of up to 1 year. 

Financial Penalties for Lease Infringements 

22. Madam, let me now move on to Clause 12 of the Bill, which allows HDB to impose variable penalties for lease infringements.

23. HDB stipulates a set of conditions in each lease agreement for two main reasons. First, they ensure that HDB flats are used for its intended purpose. The Home Ownership Scheme was introduced in 1964 to enable Singaporeans to own their homes, and have a stake in the country’s future. Thus, HDB flats are highly subsidised, and meant primarily for owner-occupation. To ensure that this system is not abused, potential buyers must meet certain eligibility criteria, such as citizenship requirements and household income before they can apply for an HDB flat. In addition, lessees must live in their flats for a minimum period, before they can sell or sublet their whole flat. Second, HDB also plays a key role in building communities and fostering neighbourly ties in our public housing estates. The conditions in the lease agreement facilitate this by spelling out appropriate behaviour, so that all residents can enjoy a pleasant living environment in a densely populated city. 

24. From time to time, however, some flat owners have abused the system. Most commonly, flat owners contravene the lease terms such as the five year MOP, and sublet their whole flat without obtaining HDB’s approval to do so. HDB has also encountered cases of flat owners using their homes as illegal gambling dens, or as illegal worker dormitories, which create an undesirable and sometimes unsafe living environment for genuine HDB residents. 

25. Under the Act today, HDB may compulsorily acquire a flat, vest a flat or terminate the lease of a flat. Under the Rules, HDB may impose a penalty instead of compulsorily acquiring the flat. However, HDB is unable, at this time, to vary the magnitude of the penalty to make it proportionate to the severity of the infringement in some cases, even if there are good reasons to do so. This puts HDB in a very difficult position: should it exercise compulsory acquisition, which can be draconian and traumatic to the home owner, or should it impose a penalty that it feels may be out of proportion to the severity of the infringement in that particular case? In some of such cases, the practical reality is that HDB has erred on the side of compassion and waived the penalty in full. But this is not ideal, and can create a moral hazard.

26. To set this right, Clause 12 of the Bill amends Section 65 of the Act to allow HDB to impose a variable range of penalties, not exceeding $50,000, instead of compulsory acquisition or vesting of flat, depending on the severity of the infringement under Sections 47, 55 and 56 of the Act. With these amendments, HDB can now implement a calibrated penalty framework instead of being faced with the stark choice of compulsory acquisition on the one hand or a fixed quantum penalty on the other.

Enhanced Powers of Investigation 

27. Madam, let me now elaborate on the enhanced powers to investigate lease infringements.

28. As I have explained earlier, HDB takes a serious view of the misuse of public housing. This is because HDB flats are highly subsidised, and are meant primarily for owner-occupation. The misuse of flats can cause dis-amenities to fellow residents, and HDB needs to be able to investigate suspected cases of misuse and take appropriate action where necessary.

29. Today, HDB's powers to conduct a thorough investigation into suspected lease infringements are limited. From time to time, HDB officers meet resistance from flat owners. Some have refused to cooperate with HDB, others go so far as to challenge HDB’s right to investigate the matter. However, HDB is not able to compel flat owners to cooperate with the investigation. This makes it very difficult for HDB officers to carry out their public duty.

30. Clause 8 of the Bill therefore introduces two new provisions that will give HDB officers the power to investigate the serious infringements set out under Section 56. New Section 56A authorises HDB officers to enter and search any flat or other premises that the owner or occupier may be residing in, and record evidence in the form of photographs, videos and audio. As a safeguard, the Act requires HDB to first obtain a warrant from the court. The officer must also identify himself to the flat owner or occupier, and show him the court warrant as well as official proof of identity. New Section 56B enables HDB officers to examine witnesses, take statements and produce documents relevant to their fact-finding. 

31. These powers will enable HDB to conduct proper fact-finding and establish whether there have been serious breaches of HDB rules that may require action to be taken. HDB will use these powers judiciously and only when necessary, and officers who carry out such investigations will be properly trained to use them professionally. 

32. Madam, let me now move on to the remaining miscellaneous amendments in the Bill.

Other Amendments

33. Section 61(1) of the Act makes it an offence for HDB home owners to sublet their flats without HDB's prior written consent. As HDB is already empowered under Section 56 to take action against unauthorised subletting, we think that should suffice. Moreover, HDB has not charged any person under this section. Clause 11 therefore repeals Section 61. 

34. Section 59(1) empowers HDB to remove the belongings of ex-lessees or occupants after recovering possession of the flats that have been compulsorily acquired. Clause 10 inserts a new provision to allow HDB to sell or dispose any unclaimed moveable property found in the flat if the owner does not take delivery of the property, and to pay the proceeds, less expenses, to the owner or into Court.

35. Currently, compulsory acquisition notices arising from serious infringements of HDB rules can only be served on flat owners or, if they have passed on, on their personal representatives. Clause 7 rationalises this procedure to allow compulsory acquisition notices to be served in situations where no personal representative has been appointed. In such situations, HDB will affix the notice on a conspicuous place outside the flat.

36. Section 58(2) allows HDB to deposit the compulsory acquisition compensation with the Court under two circumstances. First, when HDB is unable to pay out the compensation to the relevant parties if the persons refuse to accept the compensation or dispute the amount of compensation. Second, when HDB is unable to locate the lessees or interested parties. Clause 9 widens this and introduces three additional circumstances under which HDB can deposit the compensation in Court so that HDB will not have to hold on to the compensation monies indefinitely. These are (1) where the person is mentally incapacitated and has not executed a lasting power of attorney or appointed a deputy to manage his affairs; (2) where the person has passed on and no personal representative and (3) where the persons involved have a dispute as to the entitlement to the compensation.

37. Clause 14 amends Section 81 to provide that all fines paid or recovered under the Act are to be paid into the Consolidated Fund.


38. Madam, the amendments proposed today will enable and empower HDB to be more nimble, effective and relevant, for current and future generations of home owners.

Madam, I beg to move.