Complete Property Market Updates of Singapore

June 24, 2008

Tenants cashing in on rental flats

Filed under: General,HBD Reviews,Legal Ground,Regulators,Rental News — Propertymarketupdates @ 3:50 am

Heavily subsidised HDB units, which are much in demand, are often sub-let to foreigners

SOME tenants in heavily subsidised HDB rental flats have been illegally sub-letting their homes to cash in on surging demand for cheap accommodation.

There are no official figures but tenants in some estates say that as many as one in five rental flats is rented out to foreign workers – a clear breach of HDB rules.

The flats are often leased to workers from Malaysia, China and India – who are either unaware that they are renting illegally or do so because the units are the cheapest option.

Property agents and tenants told The Straits Times that there is an increasing number of such flats put up for rent by people keen to cash in on foreign workers’ demand for cheap housing.

A Malaysian, who declined to be named, told The Straits Times that she leases a two-room HDB rental flat in Toa Payoh with a friend for $700 a month.

That could be as much as $650 more than the subsidised rent – a tidy profit for the original tenant.

Their ‘landlord’ told them to keep windows shut and not to answer the door. The 35-year-old said she knew the deal was illegal but she was ‘desperate for cheap housing’, adding in Mandarin that ‘If I didn’t rent this flat, I can’t afford anything else’.

The abuse of HDB rental flats comes amid soaring demand for such homes, which are meant for needy Singaporean families.

The waiting list has shot up by at least 30 per cent over the past few months, with about 4,000 applicants in the queue. This translates to a 15-month wait, which is double the time in 2006.

Eligible Singaporeans can apply for HDB rental flats and pay $26 to $205 for a one-roomer and $44 to $275 for a two-roomer, depending on household income and other factors. The HDB manages about 43,000 such flats and plans to add 20 per cent more.

A Member of Parliament for Ang Mo Kio GRC, Ms Lee Bee Wah, told The Straits Times that residents had complained about the problem when she visited Teck Ghee last month.

‘People tell me their neighbours are renting their flats out. They should not be hogging the flats if they have an alternative place to stay,’ said Ms Lee.

When The Straits Times called five property agents last week, four said they had one- and two-room flats available for rent. Most of these flats would be rental units, said HDB.

And it is not just low-paid foreign workers renting such flats.

A Singapore permanent resident from Malaysia said he used to rent such flats as they were the cheapest on the market.

The 28-year-old finance executive rented a two-room subsidised flat in Owen Road for $550 in 2006. A similar unit on the open market would cost at least $1,000. Now, government-subsidised flats can fetch $1,000 in good locations, he added.

When The Straits Times visited Toa Payoh rental blocks last week, some tenants said they noticed an increasing number of workers from China and Bangladesh living in their blocks.

Coffeeshop worker Poh Lee Tee, 45, said her neighbour frequently rented out his flat to Indian workers, who kept her up when they came home from work.

‘But I don’t want to report my neighbours, in case I get into trouble,’ said Madam Poh.

Mr Wu Mu Song, 74, who has lived in one of the rental blocks for the past 30 years, estimated that two out of 10 flats are rented out illegally. ‘This is unfair; there are others who need these flats more,’ he said in Mandarin.

Although abuse of rental units is on the rise, Mr Wu said it was hard to catch illegal tenants as they often ignore visitors – including HDB officers.

Tenants illegally renting out their home can lose the flat and face a five-year ban from renting or buying HDB property.

The HDB recovered 17 flats in 2005 and 27 last year. The increase was due ‘to better public awareness and feedback’, it said.

It also conducts inspections at least once a year and carries out regular ‘enforcement blitzes’.

One blitz recovered 57 rental flats in three months in 2003 and 35 in a crackdown that began last year in areas like Tampines, Ang Mo Kio, Toa Payoh and Bukit Merah.

Anyone aware of illegal renting can contact the HDB at flw1@hdb.gov.sg. or call 6490 2410.

Source : Straits Times – 29 May 2008

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