Many Singapore citizens sublet their HDB flats or rent out their flats to generate passive income from the whole space or a room that no one's using. However, HDB flat owners must learn and follow government regulations on renting out a flat.
If you are a flat owner, you have to abide by the HDB rules for subletting. These HDB flats are primarily intended as affordable homes, not investments. They are built for Singapore permanent residents who want affordable housing.
These HDB estates are meant for Singaporeans to have shelter and not to earn money by becoming landlords. But you can earn by subletting your flat as long as you follow the existing HDB rules.
Let's talk about these rules that an HDB flat owner must know about renting out of flat.
To make it easier, here's a list of the 11 things a flat owner must know before deciding to sublet an HDB room or the whole HDB flat. Take a look at the following to make everything legal and avoid getting into unauthorised rental or tenancy agreement:
The Minimum Occupation Period MOP states how long a landlord or an HDB flat owner must live in the flat before renting or selling it. All flat owners must abide by the rule.
In many cases, the MOP for HDB flats is five years. This means that Singapore permanent residents owning HDB flats can only sell or rent out their flats after living there for a minimum of five years.
What if you need extra income but still haven't reached the Minimum Occupation Period requirement? In this case, you can offer a room rental, or you will offer an HDB room for rent. But you have to live with the tenants during the period. Also, ensure you only rent out a spare bedroom but not the entire house.
Many flat owners try to get sneaky with the rules by locking one room to pretend they live in the place and rent out their flats. This goes against the rules of having the landlords live with all the tenants if they decide to sublet the rest of the flat while still trying to complete the MOP requirement.
Flat owners caught committing this violation of the Housing and Development Act will have their subletting registration revoked. It will also be ruled that they are renting out the whole flat or the entire HDB flat.
Once HDB finds out you are only pretending but not living in your HDB unit, you will be penalised according to the Housing and Development Act rules. HDB will rule that you are renting out the whole flat and not owning it. This will lead to the revocation of your registration for subletting the rooms in your HDB flat.
This is something that some HDB landlords commit because they think they can easily get away with it. However, this is worse than locking a room to pretend you're living in the flat.
Some landlords ask their tenants to say they are the actual owners when asked by the authorities and their neighbours. This violation will get a more serious penalty than pretending to live in the place.
This is even worse than the second and third on this list. HDB wants the tenants to comply with its rules to obtain HDB's approval. This is done to check the legality of the tenants in renting out a room in an HDB flat. This means that getting tenants but failing to register them is illegal.
First, HDB must ensure the tenant is a Singapore citizen or legally residing in Singapore. Other tenants' particulars include the ownership of any of the following:
Employment Pass
Long-Term Social Visit Pass
Dependant Pass
S Pass
Work permit holders
Valid student pass
You need to seek HDB's approval before entering into any rental contract or deciding the rental period and the number of tenants allowed to rent out your flat. Each application can be done online and requires an administrative fee of $20.
Before entering into any deal, ensure you read about the HDB rental application process for HDB properties, bigger HDB flats, and other HDB properties.
According to HDB rules, citizenship is a factor in obtaining approval from the HDB regarding rental. But in cases where it's a big flat type with three bedrooms or more, aside from Singaporeans, SPRs or Singapore Permanent Residents are allowed to rent out unused rooms. However, for any rental processes, whether only bedrooms or whole units, landlords need to inform HDB and obtain approval.
You may have heard of non-Malaysian non-citizens or non-Malaysian Non-Citizen Quota, but what do these all mean? HDB imposes the Non-Citizen Quota in renting out HDB flats. The only exclusion to the rule is Malaysians. But it applies to non-citizens, meaning foreign tenants or Singapore PRs and non-Malaysian.
The quota for the block is 11 per cent, and for the neighbourhood, it's 8 per cent. Once the numbers are reached, only Singaporeans and Malaysians are allowed to rent in the block or neighbourhood.
Again, check with HDB and get their approval to rent out the entire flat.
HDB doesn't allow short-term leases. So you cannot turn your flat into an Airbnb to earn more rental income. HDB imposes a minimum rental period, maximum rental period, the flat type, maximum number of occupants, and who is allowed to rent to ensure a harmonious living environment in the block and flats at all times.
Moreover, short-term leases may risk the occupants' safety and disrupt the community's peace.
These flats are public housing first and foremost, with the maximum period for subletting of three years for every application for Malaysians or Singaporeans prospective tenants.
On the other hand, the maximum rental period is two years for foreigners or Singapore PRs. This means you cannot rent the flat to one person for as long as you want. You must apply for re-approval whenever you renew your application or sublet your flat.
HDB has rules about the maximum number of people who can live in a whole flat, which depends on the flat types. They are the following:
Executive - 6 tenants
With 5 rooms - 6 tenants
With 4 rooms - 6 tenants
With 3 rooms - 6 tenants
With 2 rooms - 4 tenants
With 1 room - 4 tenants
Remember that you still have responsibilities to your HDB flat even after renting out its entirety. You still need to look after its property tax, ensure the living environment is always healthy for the neighbourhood, deal with process sectors, look for a potential tenant or tenants that are work permit holders, and so on.
You also have to shoulder the damages incurred in the flat or property. You were entitled to the housing grant, and with it comes the responsibility that you will take care of it.
Under the Tenancy Agreement signed between you and your tenant, you must stipulate the terms and rules they must abide by while staying in your flat. You have to constantly monitor the tenant's compliance, all the covenants are followed, and they are not doing anything illegal and are not causing disturbance to the community.
It's not prohibited to sublet your HDB property. Many flat owners rent out their flats to earn additional income. However, you must always be mindful of your responsibilities as the owner and abide by all the stipulated regulations under HDB rules.
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