Planning to rent out or sublet your Housing Board flat? Arm yourself with the necessary know-how to better protect yourself as a landlord, and avoid common pitfalls.
It’s every HDB flat landlord’s greatest nightmare to be hauled up for an “interview”, because they have exceeded the total number of tenants allowed (see sidebar), or for some other tenant-related matter that they might have even been kept in the dark about. Certainly, it’s not easy being a HDB flat landlord, especially when there are many rules to abide by. To avoid getting into the HDB’s bad books, here’s what you need to know:
Before leasing out
When it comes to leasing out your whole unit, you need to first fulfil the minimum occupation period of five years, before you can seek permission from the HDB to do so.
You will need to provide the names, passport and work-document details, as well as update the HDB promptly on tenant changes.
Who to avoid leasing to
Those who urgently need to move in. There is a chance that they were evicted by their previous landlord. This could mean rogue tenants.
Those whose names cannot be submitted via the HDB’s website. This means their name is already tied to another two properties and their previous landlords have not removed it – possibly because they were evicted very recently.
Those who refuse or are unable to show you their original documents. Even if your agent has already made photocopies for you, always insist on matching them against the original passport, work permit, S Pass and/or employment pass. Take note of the expiration dates and make sure that they are within the rental lease period.
Those whose work or study visa is expiring soon. This means they may move out anytime and leave you stranded with a shortened lease – after you’ve already paid your agent his full fees. Do note that your agent will not refund your fees if your tenant leaves
During the lease
Some landlords let their agent handle everything, but always meet your tenants personally, at least during the handover of keys. Take the opportunity to remind your main tenant that they are not allowed to sublet your unit to anyone who is not on the official list of tenants.
It is recommended to meet all the tenants at least once after they have moved in, to ensure that they are aware of the rules and regulations that the HDB imposes. Remind them that should they not comply, both the landlord and tenant will be in trouble.
Conduct regular checks, even if your agent tells you that you should not disturb your tenants. Show them this statement from the HDB: “Even if you have obtained approval to sublet your flat, you should conduct regular checks to ensure that the rules and regulations are met.” After all, you have every right to do so, as the property belongs to you.
Warn your tenants that the HDB also conducts regular checks to take enforcement action against unauthorised subletting. This is usually in response to complaints by neighbours. From January 2013 to December 2014, the HDB carried out more than 13,000 flat inspections and took action against 24 flat owners for unauthorised subletting.
Do surprise checks or give your tenants very little notice before a visit, so you get a better idea of whether they have been illegally subletting your unit. Look out for telltale signs: Your main tenant may be reluctant to let you visit or concoct elaborate excuses to keep you away; the lock may have been changed; there may be an unusually large number of shoes, cooking utensils, luggage, clothes or toiletries; unauthorised partitions in the bedrooms or living room; or furniture you had provided have been replaced with dormitory-style bunk beds.
If you notice the same people loitering near (but not inside) your home whenever you make a scheduled visit, pay extra attention. These could be the illegal squatters who leave your home temporarily while you’re visiting.
Before subletting to non-Malaysians or non-citizens, check on the Non- Citizen Quota for Subletting of Flat on the HDB’s website. This rule is to maintain a good ethnic mix in HDB estates. If the quota for that month is already met, you can rent only to Singaporeans and Malaysians.
If tenants cause trouble
Immediately evict all tenants who are not listed in the original lease contract.
Your agent is not obliged to refund your fees, even if your tenants stayed for only a couple of months. Try negotiating for a replacement tenant, especially if this is your regular agent.
If the HDB has been investigating your case, you will be called in for an interview. Both homeowners will be spoken to separately, which can be very intimidating. Be truthful. If you are an innocent victim of scheming tenants, you can be assured that the HDB will sort it out.
Bring all documents that can exonerate you. This could include proof that you have updated all tenants’ contacts with the HDB, as well as statements showing that you have paid your property and income tax on the rental promptly. It could also help serve as proof of informing tenants in writing that subletting is illegal, if your rental lease contract clearly states that tenants are not allowed to add new subtenants without your knowledge and consent.
The HDB will ask for the contact and licence details of your and the tenant’s agents, as well as all your subtenants’ information. It is not known if any action against first-time offenders will be taken, but it will be kept on record.
If you are lucky, the HDB may let you off with an official letter of warning. In serious cases of wilful law-flouting, you may end up losing your flat.
If you sublet your flat illegally, the consequences can be dire. This could include a heavy fine, repossession of your flat and bans on HDB flat purchases and rentals for 10 years. Your agent could also get into trouble.