DE-COUPLING

DE-COUPLING | There are many reasons why a co-owner might want to buy another co-owner’s share of the property that they own, the process is known as “de-coupling”. De-coupling results in the property being solely owned by a single owner, with the previous co-owner usually becoming an authorized occupier.

There is a difference between decoupling for HDB flats such as Sengkang HDB and decoupling for private properties.

The main differences between decoupling for HDB flats and private properties are that HDB flats cannot be decoupled for married couples while it can be done for private properties. This process is called an “open secret”, as it effectively allows the previous co-owner to be free to purchase another property without having to incur the Additional Buyers’ Stamp Duty (ABSD) on the second property they share. Here are the procedures, as well as any limitations, involved in the de-coupling process.

Methods of De-Coupling

Generally, there are two methods of carrying out de-coupling: ownership in the property may be
transferred by way of gift or it may be transferred through a sale of the part share in the property.

1. Gifting

Transferring the property by way of gift refers to a transfer in which no consideration is paid to the exiting co-owner is subjected to the property being fully paid. For example, when a co-owner transfers his share in the property for $0. Generally, such a transfer will only be valid when the property is unencumbered, for example, when there is no outstanding mortgage, or CPF charge on the property. Otherwise, there must be an adequate sum to repay the outstanding loan or refund of CPF funds for the ransfer to occur.

2. Transfer by way of sale

The second method of de-coupling involves the sale of the exiting co-owner’s part share to the other co-owner. The rules governing de-coupling for private properties and Housing & Development Board (HDB) flats differ; both of which are explained below.

 De-Coupling for Private Properties and HDB Flats

1. Private properties

The procedure for purchasing a part share of private property is rather flexible. Generally, three essential elements to the contract should be specified: the property, price and the parties. It is best for the sale to be concluded by a formal contract or agreement in writing, executed by the parties, as this would allow the agreement to be enforceable, fulfilling section 6(d) of the Civil Law Act.

Joint tenancy versus tenancy-in-common

Co-owners who own the property as tenants-in-common can de-couple. This is because tenants-in-
common own the property in undivided shares, which basically means that each co-owner owns his
specified share in the property. Therefore, it is possible for one co-owner to transfer his specified share in the property to the other co-owner.

On the other hand, co-owners who own the property as joint tenants will not be able to de-couple. Joint tenancy is a form of co-ownership in which there are no shares – this means that the co-owners both own the property as a whole interest. Therefore, for as long as the manner of holding is a joint tenancy, it would be impossible to de-couple as they are viewed as owning the property as one entire share.

Notwithstanding the above, de-coupling is not completely off the table for joint tenants. Joint tenants can de-couple if they perform the act of severance to become tenants in common.

There are several ways to perform severance for joint tenants. A common way of severance is carried
out through deed or registration. This is performed through a individual declaration, by lodging and
registering the Instrument of Declaration with the Singapore Land Authority.  The co-owner must then serve a copy of the Instrument of Declaration personally or by registered post on the other joint tenants.

2. HDB flats

Currently, HDB flat owners are not permitted to transfer their ownership to their spouse through a gift
or sale of their part share in the property, except for specific circumstances. For example, the existing
flat owners may transfer their flat ownership to immediate family members if the proposed owners
meet all the eligibility conditions, which include the following:

• A change in the existing family structure such as divorce, marriage or the demise of an owner;
• The proposed owners, both remaining and incoming, must be able to take ownership of the flat
• under one of the existing eligibility schemes, such as the Public Scheme, or the Joint Singles Scheme;
• The proposed owners must not be an existing owner or be listed as the essential occupier of another HDB flat.

P/S: De-coupling ni macam pemahaman Sis tukar milik nama harta, haa gitule lebih kurang, korang bacalah yer..