Tag Archives: CEA

URA, CEA look into possible rental violations

The Urban Redevelopment Authority (URA) and the Council for Estate Agencies (CEA) are currently investigating possible violations of the minimum rental period for private residential properties, reported The Business Times (BT).

“CEA and URA have been investigating the cases cited by The Business Times,” Chua Geck Siang, CEA’s Acting Deputy Director (Licensing), told the newspaper.

Under the URA’s guidelines, the leasing of an entire flat or rooms to residential tenants is only permitted for six months and above. Anything below that is only allowed for hotels and serviced apartments.

However, a BT report earlier this month revealed that some accommodation service providers have been offering short-term stays in private residential properties. They were able to skirt the agency’s rules due to the clever wording of the tenancy agreements.

For example, tenancy agreements issued by Uncharted Homes, on behalf of BS Shenton Pte Ltd, stipulate a tenancy period of at least six months, but come with a diplomatic clause permitting the tenant to rescind the contract without penalty.

Another accommodation service provider, LMB Housing Services, uses an open-ended agreement that lays down a minimum lease of six months without specifying the last date of stay. It also gives tenants the right to end the lease without incurring a penalty if they submit a termination letter 30 days before departing.

Despite these legal machinations, the URA pointed out that the rules were still broken if the units were rented out for less than six months.

Among the many service providers that offer short-term stays, the only other ones named in the BT report were International Service Apartments and Atas Residence, previously known as Overseas Students Placement Centre (OSPC).

Moreover, as the function of these accommodation service providers overlaps with the line of work of property agents, the operations of these firms raises the question of why they are not under the purview of the CEA.

Under the Estate Agents Act, entities and individuals doing estate agency work in Singapore must be licensed and registered with the CEA.

Property agents who broker short-term leases may lose licence

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.