Some agents are facilitating short-term rentals due to the sluggish housing market.
Property agents who violate the rules against short-term leases of residential properties for less than six months may lose their licence, according to the Council for Estate Agencies (CEA), reported The Business Times.
“Property agents have to be mindful at all times that they are required to comply with the Estate Agents Act (EAA) and its regulations when conducting estate agency work. They should not do anything that abets or facilitates anyone to breach any law or regulation,” said Acting Deputy Director for Licensing, Chua Geck Siang.
However, there are some agents who facilitate short-term rentals due to the sluggish housing market, even though the commission for facilitating such transactions is not as high as brokering sales. They usually receive half-a-month commission per year of tenancy.
Some agents were found to be referring potential clients for stays of under six months at St Thomas Lodge, Devonshire Apartments and Oxley Thanksgiving Residence, even though none of the three have been granted permission to be operated as a serviced residence.
“Agents who engage in these activities are either desperate or not well-informed. If they want to earn this kind of money, they might as well drive (for) Uber to earn money legally,” said Eugene Lim, Key Executive Officer, ERA Realty.
However, enforcing the rules against short-term leases is tough, especially for private properties. To skirt the rules, some landlords use a standard contract of six months with early termination clauses.
Further exacerbating the problem is the popularity of short-term rental portals like Airbnb and Homeaway, as well as the significant supply of studio and shoebox units, coupled with the strong demand from foreigners who work or study for a few months in Singapore.
As such, Century 21 Singapore CEO, Ku Swee Yong, is urging the various government agencies to work together to define the laws and increase enforcement against short-term leases.