Tag Archives: Sublet

HDB message to PR owners: Live in it or sell it

The Republic will cap the amount of time that permanent residents can sublet their Housing and Development Board flats, according to new rules aimed at deterring PRs from buying flats for investment or rental yield.

Analysts say the move could lead to a slight, short- term spike in HDB rental rates, although the overall impact should be muted.

Currently, Singapore citizen and PR flat owners may sublet their flats after meeting the minimum occupancy period, which is five years for most cases and three years for resale flats purchased without the CPF Housing Grant.

The approval to sublet is granted for up to three years per application, and owners can seek to renew the approval at expiry without limit.

Under the new rules, which take immediate effect, PR owners will be allowed to sublet the flats after a minimum occupancy for just one year, instead of three.

After that year, an extension will be granted only if there are extenuating reasons. The total period of subletting during the flat owner’s entire duration of ownership is capped at five years. There will be no change in policy for citizens.

“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,” HDB said in a statement.

“While HDB allows SPR owners who have met the (minimum occupancy period) 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.”

SLP International Property Consultancy head of research Nicholas Mak said that there are about 5,000 flats owned by PRs that have been approved for subletting, making up about 5 per cent of the HDB sublet market.

While “there could be an increase in the supply of HDB flats” as some PR owners are induced to sell, “I think the impact will be small”, he said.

ERA key executive officer Eugene Lim noted that the number of subletting approvals has risen rapidly by almost 89 per cent, or almost 7 per cent per quarter, from 2009 to 2012.

“The rapid increase in subletting approvals means less flats are put on the resale market and this could have contributed to the continued increase in HDB resale prices despite the government’s efforts of making more BTO (build-to-order) flats available,” he said.

The supply of flats available for subletting might diminish in the coming quarters, which would drive up HDB rents in the short term.

“However, as policies on the employment of foreign manpower are also being tightened, the resulting reduction in demand for renting HDB flats may just prevent HDB rents from a runaway increase,” Mr Lim said, adding that the rise in HDB rents might just be a temporary phenomenon over the short term.

Source : AsiaOne – 2012 Jul 14

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Stricter rules for PRs to sublet HDB flats

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).

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.

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.

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.

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.

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

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.

Source : PropertyGuru – 2012 Jul 11

See : Can HDB step up enforcement

See: HDB has stepped up its efforts against illegal subletting