Harder for PRs to sublet HDB flats now!

By Ethan Lou-my paper
Thursday, Jul 12, 2012

Flat owners who are permanent residents (PRs) will now have to meet more stringent conditions if they want to sublet their flats.


With effect from yesterday, they will be able to sublet their flats only if they have not done so before.

This is on top of the Housing Board's (HDB's) existing requirement that they have to occupy the flat for a minimum period of five years.

HDB said in a statement yesterday that PRs can sublet their flats for only a one-year period, after which they would have to apply for an extension. But the application would be assessed on a case-by-case basis.

Approval will be granted only if there are "extenuating reasons", said HDB. The total period of subletting during the owners' entire flat ownership cannot exceed five years as well.

Previously, the subletting conditions for PRs were the same as those for Singapore citizens - they had been allowed to sublet their flat for up to three years per application, and there had been no cap on the number of renewals or the total period allowed for subletting.

The subletting conditions for Singaporeans remain unchanged.

On the changes, HDB said: "The revised rules are to reinforce the policy intent of providing HDB flats as homes to PRs, and to deter those who are buying the flats for rental yield or investment."

HDB added that while it allows PR owners who have met the minimum occupation period to sublet their flat, "the subletting should be on a temporary basis".

It added: "If the PR families no longer need the flat for their own occupation, they should sell the flat instead of subletting it."

HDB said that as of April, 2,142 PR flat owners are legally subletting their flats. They form about 5 per cent of the total approved subletting applications.

A total of 56 owners were taken to task last year for unauthorised subletting. Most were fined, while 18 had their flats taken away.

Property analysts told my paper it is unlikely that the stricter conditions for PRs were a result of higher rates of illegal subletting among them.

Mr Lee Sze Teck, a senior manager at Dennis Wee Group, said that the changes could be due to last year's General Election, "when sentiments on the ground reflected that there should be clearer distinction between citizens and PRs".

Rental prices might go up initially, with fewer rental flats in the market because PR flat owners face tighter rental conditions, said Mr Mark Teo, executive group division director with ERA Realty Network.

But he added that government policies that have tightened immigration and restricted who can rent flats will help reduce demand for rental flats.


ethanlou@sph.com.sg
Ref:asiaone

HDB Steps Up Enforcement against Unauthorised Subletting and Revises Subletting Rule for SPRs

Date issued : 11 Jul 2012

HDB flats are primarily meant for owner occupation. Those who wish to sublet their flats must meet the Minimum Occupation Period (MOP) and obtain HDB’s approval before they can do so. This rule applies to both Singapore Citizens (SCs) and Singapore Permanent Residents (SPRs).

Enforcement Actions Taken Against Unauthorised Subletting

2: In 2011, HDB carried out 7,000 flat inspections and took action against 56 flat owners for unauthorised subletting. Of these, HDB has initiated compulsory acquisition action against 18 flat owners for blatantly infringing subletting rules. (See Annex A  (PDF 22KB) for details of 3 cases where HDB has initiated compulsory acquisition actions as the flat owners have blatantly abused the public housing system and flouted HDB rules.)

Revised Subletting Rules for Singapore Permanent Residents (SPRs)

3: HDB reviews policies and rules regularly to keep them relevant. As part of ongoing reviews, the rules for subletting by flat owners who are SPRs will be revised with effect from 11 Jul 2012.

Current Rule

4: Currently, both SC and SPR flat owners are allowed to sublet their flat after meeting the MOP. The approval is granted for a maximum of 3 years per application. Owners can apply to renew the period of subletting upon the expiry of each 3-year period, with no cap on the number of renewals and the total period of subletting.

Revised Rule

5: Under the revised rule, SPR flat owners will be allowed to sublet their flat after meeting the MOP, if they have not sublet the flat before. The approval will be granted for 1 year only, instead of 3 years. Upon expiry of the 1-year period, the application to extend the approval will be assessed on a case-by-case basis and approval will be granted only if there are extenuating reasons. The total period of subletting during the flat owners' entire duration of the flat ownership is capped at 5 years.

6: The revised rule is to reinforce the policy intent of providing HDB flats as homes to SPRs, and to deter those who are buying the flats for rental yield or investment. While HDB allows SPR owners who have met the MOP to sublet their flat, the subletting should be on a temporary basis. If the SPR families no longer need the flats for their own occupation, they should sell the flat instead of subletting them.

7: There will be no change to the subletting rules for flat owners who are Singapore citizens.

Advice to Homeowners and Tenants

8: HDB would like to remind all flat owners to comply with its terms and conditions for subletting, such as ensuring that the number of tenants does not exceed the maximum number allowed for the various flat types and that the flats are only occupied by the listed tenants. They must also monitor their tenants to prevent nuisance or misuse of the flat, such as further subletting the flat to non-authorised occupants for short-term stays.

9: HDB takes a serious view of any unauthorised subletting and will take stern actions against owners, including compulsory acquisition, even if it is the owner’s first infringement. This is especially for cases where the flat owners had bought the flat purely for monetary gains, with no intention of occupying it. HDB has also encountered cases where flat owners try to circumvent HDB’s rules by locking up one room and subletting the rest of the flat without physically staying in it. Such cases will be treated as unauthorised subletting of the entire flat. Subletting of flats or bedrooms for short-term stay to tourists is also not allowed.

10: Prospective tenants are also advised to familiarise themselves with the eligibility conditions for subletting, e.g. whether the flat owner has obtained HDB's approval to sublet the flat. More information can be found on HDB’s website www.hdb.gov.sg, under the section “Living in HDB flats”.

11: HDB flat owners who intend to rent out their flats/rooms and tenants who are renting a flat/room are advised to check CEA’s Public Register of Estate Agents and Salespersons at www.cea.gov.sg to verify their salespersons are registered with CEA before engaging their services. In addition, flat owners and tenants should not allow their salespersons to handle rental payments or rental deposits as they are prohibited from handling transaction monies for or on behalf of any party in the lease of HDB properties.

12: Consumers should only engage salespersons who are registered with CEA. They are also advised not to respond to any real estate agency flyer, leaflet or advertisement that does not provide a salesperson’s details or registration number. Consumers should report to CEA when they encounter any person not listed on the Public Register but carrying out estate agency work illegally or handling transaction monies in the lease of HDB properties. They can report the matter to the CEA at 1800-6432555 or feedback@cea.gov.sg.

For Enquiries

13: The public can call the following numbers for more information or enquiries on subletting or report suspected cases of unauthorised subletting or unauthorised use of flat:

a) For information or enquires on subletting
HDB Branch Office Service Line @ 1800-225-5432
b) For report on suspected unauthorised subletting / use of flat:
HDB’s dedicated hotline @ 1800-555-6370
(All feedback will be kept strictly confidential)

Page 1 of 1

ANNEX A

HDB has stepped up enforcement against unauthorised subletting since 2010.

It carried out 7,000 flat inspections each year in 2010 and 2011, up from 3,000 inspections in 2009.

2. In 2011, HDB took action against 56 flat owners for unauthorised subletting.

Actions included compulsory acquisition of the flats and imposing financial penalties.

Of the 56 penalised flat owners, HDB has initiated compulsory acquisition action against 18 flat owners for blatantly infringing subletting rules.

Case 1 : Sublet flat immediately after flat purchase without HDB's approval while staying in parents’ flat 

Ms A purchased a 4-room flat at Bedok North in Nov 2010 from the open market.

HDB’s investigation revealed that the flat was sublet to 2 tenants at a monthly rental of $1,800/- since Jan 2011. The tenant confirmed that the flat owner was not residing in the flat and one of the bedrooms was locked up by the flat owner. The monthly utilities bills were paid by the tenants.

The flat owner has sublet the flat without HDB's approval immediately after the flat purchase. This indicates that she has purchased the flat for investment purposes and not for occupation.

Case 2 : Sublet flat immediately after flat purchase without HDB's approval 

Mr B, Mr C and Mr D purchased a 4-room flat at Cantonment Close in Oct 2009 from the open market. HDB’s investigation revealed that the flat was sublet to 5 tenants at a monthly rental of $1,900/- immediately after the flat purchase. A tenant confirmed that the flat owners were not residing in the flat and the monthly utilities bills were paid by the tenants. As the lessees have sublet the flat without HDB's approval immediately after the flat purchase, this shows that they have purchased the flat for investment purposes and not for their own occupation.

Case 3 : Misuse flat as a lodging house 

Mr and Mrs F had purchased the executive apartment in Tampines in Sep 2009 from the open market. They advertised their flat on the internet for transient use on a daily basis.

HDB's investigations revealed that the flat was sublet to different groups of people for short-term stay. Evidence gathered confirmed that the flat has been misused as a lodging house for tourists. As this is a serious infringement, HDB has taken action to compulsorily acquire the flat.

Ref:.hdb.gov.sg

PRs who no longer need to stay in their flats should sell them instead of subletting, says HDB

By Joanne Chan

SINGAPORE – Singapore permanent residents (PRs) who want to rent out their public flats will now face stricter subletting rules, such as a shorter rental period of one year.

The Housing and Development Board (HDB) announced several revisions yesterday, which take immediate effect, to “reinforce the policy intent of providing HDB flats as homes to the SPRs and to deter those who are buying the flats for rental yield or investment purposes”.

Singapore citizen homeowners will not be affected by the changes.

Previously, all flat owners – both Singaporeans and PRs – who meet the minimum occupation period could apply to rent out their flats for a period of three years. They could then ask for an extension, with no cap on the number of renewals, or the total period of subletting.

Under the new rules, when the new one-year rental period expires for PRs, any extension will be assessed on a case-by-case basis and approval will be granted only if there are extenuating reasons, said the HDB.

In addition, PRs can now only rent out their flats for a total period not exceeding five years.

For PR homeowners already renting out their flats, the HDB said they would be allowed to see out the three-year agreement, after which they would be subject to the new rules.

Said the HDB: “If the SPR families no longer need the flats for their own occupation, they should sell the flat instead of subletting them.”

As of April, 49,190 flats are owned by Singapore PRs. Of this number, 2,142 owners currently sublet their flats, making up just 5 per cent of the total approved sublet cases.

However, property firm ERA said its figures showed that more PRs are renting out their HDB flats, and this might have prompted the revision of the rules.

ERA Key Executive Officer Eugene Lim said the new rules are “just to put a check on the potential numbers of PR households that would actually consider renting out their flats”.

Another market watcher, Dennis Wee Group Senior Manager of Research and Consultancy Lee Sze Teck, felt the changes better fit the housing needs of PRs.

“PRs may only be here for work-related purposes … one year is good enough for them.”

Chairperson of the Government Parliamentary Committee for National Development Lee Bee Wah supported the changes, saying that PRs should not be “entitled to the same privileges or benefits that Singapore-born citizens enjoy”.

She added: “This will also resolve some of the concerns residents have pertaining to an influx of strangers and foreigners in their neighbourhoods as a result of their neighbours subletting their flats freely.”

The changes come two days after the Manpower Ministry tightened the criteria for work pass holders to sponsor dependents, as part of plans to moderate the growth of Singapore’s non-resident population.

As for the impact on the rental market, PropNex CEO Mohamed Ismail said that PRs held too small a share of the HDB sublet pie for the move to have a significant impact on rental supply and prices. JOANNE CHAN

Ref:singaporewatch.org