What are the rules on subletting your HDB flat

What are the rules on subletting your HDB flat

Assalamualaikum...

Finally getting another new property in Singapore and planning to get your HDB flats or house rent out in Singapore to earn some extra passive income. Furthermore, subletting the property seems to be a less tedious work to do as compared to flipping their properties. If you are planning to sublet your HDB flat, there are a few things that you have to take note of before you get to the lease agreement.

            First of all, your HDB has to fulfill the condition of a 3 or 5 year Minimum Occupation Period (MOP) if you plan to rent out the whole HDB flat. Those who bought a non-subsidized flat from the open market before 30^th August 2010 will have to live at the HDB flat for at least 3 years or 5 years if you received your documents after the date. Whereas for people who have bought the HDB flats from HDB directly or people who have a housing grant granted by the CPF board must live there for 5 years. That being said, you will also have to be aware of your tenants as you are not allowed to rent your HDB flats to owners of Executive Condominium units if they have not met their 5 years MOP or owners who have rented out the flats of their own. However, there is an exception for it. It is only allowed if the tenant is already divorced or separated

            Next, if you were to sublet your HDB flat to foreigners, you have to make sure that they have their valid permits or pass, such as Employment Pass, Work Permit, S Pass, Dependent Pass or Student Pass for international students. Be sure that their passes are still valid and have not expired. Do take note of the number of tenants you are allowed to keep within your HDB flat.

        You will have to get HDB’s approval before having your HDB flat or house for rent in Singapore. You can have your application submitted online and will only need to pay $20 to sublet your HDB flat for a period of 3 years. Tenants will have to pay for stamp duty as well to the Inland Revenue Authority of Singapore.

As for subletting rooms instead of a whole HDB flat, you do not have to seek for approval from HDB, however, your tenant’s details have to be registered within 7 days of the lease. Your tenants will have to pay for stamp duty as well even if he or she is renting only a room. Do note that you are allowed to only rent out the rooms if your HDB flat has at least 3 rooms. For a 3 bedroom HDB flat, you are allowed to sublet 1 unoccupied room and for a 4 bedroom or bigger units, you are allowed to sublet 2 rooms.

Subletting a private property or room do not need approval from government authorities but you have to make sure of the period of the tenant’s permits or pass. Make sure the permit is up to date and not expired. And most important, make sure they pay for stamp duty to the Inland Revenue Authority of Singapore.

Most owners or landlords have a misconception of subletting the rest of their HDB flat so long as they have one bedroom locked. However, this is not allowed and it is against the HDB rules of subletting. You could even risk getting your unit confiscated by HDB. The owner has to physically stay in the HDB flat if he or she is subletting the rooms in the HDB flat. Unless you have fulfilled the 5 years MOP, you are not allowed to sublet the whole HDB flat.

There are also some rules and responsibilities that both the landlord and tenants should abide during the tenancy period. First and foremost, the landlord is not allowed to interrupt the tenants unnecessarily or ask for the rental before due date. If the tenant frequently delays his or her rental, a 10% interest fee per year will be charged, usually if the payment is overdue 14 days or more, as it is stated in most contracts. All the fees that are borne by the landlord should be duly paid as well to avoid unnecessary issues from the government or authorities. In the event where the tenant damages the furnishing or any electrical appliances, the tenant will have to pay for the first $150 of repairing costs as stated in the contract that is agreed by both the landlord and tenant. However, all contracts typically come with a one month warranty period. That being said, if there is any damage of furnishing or any electrical appliances within one month, the repair costs will then be borne by the landlord himself. The landlord is also not liable for any requests by the tenants that is not stated in the agreement or contract. If there I any request from the tenant, he or she will have to seek for approval from the landlord before getting it done, and of course, at the tenant’s own cost.

In addition, the tenant is allowed to use his or her security deposit to contra his or her final month of rent. But do make sure to check with your inventory list and check for any missing items and damages of furnishing or electrical appliances. If there are damages to your furnishes or electrical appliances, you may then use the security deposit to cover the replacements of those items or repairing costs before refunding.

Last but not least, the most dreaded situation – tenant with a 1 year contract wanting to break the contract halfway. For situation where the tenant ends the contract early, the tenant will then have to find a new tenant to replace for the remaining lease. And if the new tenant pays a lower rent than the first tenant, the first tenant has to pay for the difference in rental. However, if the landlord breaks the contract and causes the tenant to rent a similar house with higher cost, the landlord has to bear the difference of rental and other expenses when the tenant shifts to the new house. As for the agent’s commission, the party that failed to fulfill the contract has to compensate the allocated commission to the other party.

As tedious as it seems, renting a house in Singapore is actually much simpler than flipping your properties in Singapore. Just make sure you follow the rules and tips when you get your house for rent.

Marsha
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