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There can be several reasons for renting out your HDB flat, to earn more cash to get by, or for passive rental income while you’re living in another property (e.g. a condo/a child’s apartment). That said, there are a handful of regulations you must know.

One reason for regulating the renting out of flats is to preserve the intention of HDB housing for owner occupation, rather than for investment. The other objective is to preserve the quality of life and living environment of our HDB estates.

Assumption #1: Anyone can rent out their flat after the Minimum Occupancy Period (MOP)

Many HDB flat owners are acquainted with the MOP, where they need to wait at least five years before renting out the entire flat. Still, there are certain conditions that one needs to be aware of:

Singapore Permanent Residents (PRs) are not allowed to sublet their flat, even if they have fulfilled the MOP.
One can however, rent out spare rooms in their HDB flat even during the MOP, as long as you get the necessary approval from HDB.
You’ll need to check the tenant’s eligibility to rent the entire HDB flat as well. Since Jan 1 2017, non-Malaysian work permit holders from the manufacturing/process sector are no longer allowed to rent the entire HDB flat, joining the list of non-Malaysian work permit holders in the construction and marine industry who are not allowed to do so.
Even if you have fulfilled the MOP, you still need the prior approval of HDB before you go on to rent out the entire flat.

Assumption #2: I can rent out my flat during the MOP by keeping one room locked

Under HDB rules, it’s mandatory that the owners and all authorised occupiers to continue to live in the flat with the subtenants during the MOP period. To skirt around the rule against renting out the entire flat during the MOP, some home-owners rent out the whole flat minus one bedroom, keeping it locked and with the excuse that they are “frequent travellers”, if anyone asks.

Well, all we can say is that HDB regularly carries out random checks on suspicious rental acitivity. For instance, when they see that a room rental takes place but the rent is suspiciously high, they’ll carry out investigations and have the right to enter your flat for checks, to the extent of interrogating your tenant. If they seem that you have illegally sublet your entire flat, they may take action against you under the Housing & Development Act. The worst case scenario is repossession of the flat.

subletting hdb flat lock door — Try the “lock one room” trick at your own risk.

Assumption #3: I can rent out my HDB to more tenants if I have a bigger flat

There is a such a thing as an occupany cap, which specifies the maximum number of occupants in a unit when renting out a HDB flat. FYI, flat owners are not allowed to sublet bedrooms for 1-room and 2-room flats, whereas the maximum number of occupiers allowed in a HDB flat is 6, even if you live in a sprawling executive mansionette or a HDB jumbo flat.

Occupancy Cap for Renting Out of HDB Flats

HDB Unit Type	Maximum no. of occupants
3-room and larger	6
Smaller than 3-room	4

If renting out rooms, the stay-in landlord and any other non-tenants in the house also count towards the occupany cap.

Assumption #4: I do not need to register a tenant if he/she is my relative or friend

As long as you are collecting rent for someone’s stay in your flat, you will need to register the tenant. This is to ensure the person is legally allowed to stay in Singapore, and that the subletting quota for the neighbourhood is observed.

FYI, there’s a limit on the number of foreigners and non-Malaysian Singapore PRs who are allowed to reside in a block of flats. The current quota for non-Malaysian tenants is set at 8% at the neighbourhood level and 11% at the block level. Landlords should check here before renting out their flat.

If you are renting a HDB flat/room to a friend or relative who is a Singaporean, you need to ensure that they do not currently own other HDB properties as well, unless they are divorced or rent out their property within one month of renting a flat/bedroom from you.

Assumption #5: I can rent out the HDB flat/room to the same tenant for as long as I want

HDB flats are public housing primary for Singaporeans’ own stay. If you are thinking of renting them out long term to the same tenant,that’s not allowed. Although the maximum subletting period is 3 years per application, it’s reduced to 1.5 years if one or more subtenants is a non-Malaysian/non-citizen.

You can however, rent out the HDB flat or room continuously to a different tenant each time. FYI, the minimum subletting period for a HDB room or whole flat is 6 months.

Old man crossing his arms in an X — Screen your tenants carefully, with the help of an agent if necessary to save you time.

Assumption #6: If I rent out the entire HDB flat, I’m not liable for what my tenant does

Your tenant is not allowed subletting the rooms in the HDB flat he/she rents. If they do, or flout any law while living in your flat, the HDB flat owner may be held liable.

Under the Women’s Charter, for instance, an owner or tenant who rents out⁠—or sublets⁠—premises that are used as a brothel will be held criminally liable.

Hence, it’s prudent that the landlord interviews all prospective tenants face-to-face (or via video call). Frequent checks of the property, such as a visit once every two months, are also recommended to make sure that there are no unauthorised occupants and nothing fishy/illegal is happening behind closed doors. If you’re unavailable (e.g. overseas), you can task someone you trust to do these checks.

5 days ago · 6 min read · by Lynette Tan

Source: 99.co (12 Jun 2020)

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Friday, 12 June 2020

Subletting HDB flats? These assumptions could land you in trouble - 99.co