Subletting HDB flats? These 5 assumptions could land you in trouble

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There can be several reasons for renting out your HDB flat, such as to earn more cash to cover your monthly expenditure 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.

To stay on the right side of the law, you'll need to know what you can and cannot do when subletting HDB flats. (FYI: the HDB's technical term for flat owners' is "tenants", hence the term "subletting".) Here are the most common (and wrong) assumptions people make:

Assumption one: 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.

Assumption two: 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 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 homeowners 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 activity. 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 deem that you've 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.

Try the "lock one room" trick at your own risk.

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

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

Occupancy Cap for renting out HDB flats

HDB unit type Maximum no. of occupants
Three-room and larger Six
Smaller than three-room Four

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

Assumption four: 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 per cent at the neighbourhood level and 11 per cent 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're divorced or rent out their property within one month of renting a flat/bedroom from you.

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

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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 three years per application, it's reduced to two years if one or more subtenants is a non-Malaysian/non-citizen.

Each time you rent out your flat or renew the rental application, you need to reapply for approval.

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 six months per application.

Screen your tenants carefully, with the help of an agent if necessary to save you time.

Assumption six: If I rent out the entire HDB flat, I'm not liable for what my tenant does

Your tenant is not allowed to sublet 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 ask someone you trust to do these checks.

ALSO READ: The new landlord's guide to subletting your flat

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