Recent high profile cases of illegal subletting in Singapore have once again raised the question: Is subletting allowed in Singapore? And if so, under what circumstances? Whether you’re a landlord looking to rent out your property, or a main tenant of a residential home looking to offset a portion of your monthly rent, this article will serve as a quick guide on all you need to know about renting a property in the city state.
Is subletting private property legal in Singapore?
The short answer to the question is yes, but with conditions. Since June 2017, the Urban Redevelopment Authority (URA) mandated that all rental leases must last for a minimum of three consecutive months. This duration was lowered from the previous minimum stay duration of six months. In other words, short-term stays, including those listed on online booking sites, are considered to be illegal.
If you are a tenant looking to sublet your property, you must also receive your landlord’s consent, which can be easier said than done. This is because subletting a property typically means introducing more people and consequently increasing the chances of disputes within a landlord’s home. Understandably, most landlords will wish to avoid such possibilities whenever they can.
As such, most tenancy agreements will typically include a clause that disallows subletting. That said, the need for subletting can often arise several months or years after you move in, such as when your financial circumstances change, or when you have to live overseas for an extended period of time and do not wish to give up your current place or continue paying rent while you are not around. Negotiating with your landlord for an amendment of terms during the recontracting period is usually an option, especially when you’re coming towards the end of your lease.
Why is short-term subletting illegal in Singapore?
The URA’s prohibition of short-term stays of less than three months is a result of extensive stakeholder consultation which has been done since 2015. While the URA had previously collaborated with relevant agencies to come up with guidelines for short-term stay in private residential properties in April 2018, a series of face-to-face interviews with private homeowners in the latter half of that year brought about the following concerns:
- Compromised residential security
- Loss of privacy
- Noise pollution, especially during after work hours
- Damage or overuse of common facilities
- Greater risk of fire
Between 55-68% of residents raised their concerns for these issues, as compared to a mere 7% of surveyed residents who expressed a desire to let out their homes and investment properties for short-term accommodations. While recognising that short-term accommodations could provide a steady source of alternative income, it was ultimately determined that the potential downsides greatly outweighed the benefits. Thus, URA decided to stick with their ruling against short-term accommodations.
Rules for renting out private property in Singapore
The following list of rules applies to both landlords and main tenants who are looking to rent out a residential property. Local authorities do conduct checks to make sure that houses in Singapore are being used for their intended purpose — to provide affordable housing, and have also stated that property owners are responsible for ensuring that their houses are not rented out illegally.
Maximum occupancy cap for unrelated persons
An occupancy cap of six unrelated persons per property unit applies to all types of private residential property. Unrelated persons refers to people who do not belong to the same family unit.
For example, a family of three who stays in their property while renting out another part of it can legally accommodate a maximum of three additional tenants. Domestic helpers are also considered part of the same family unit. As such, a family with four children may still hire a stay-in domestic helper without flouting the occupancy cap rules. Multi-generational families consisting of grandparents and caregiver relatives are not subject to the occupancy cap as well.
Landlords must do their due diligence to make sure that tenants comply with occupancy rules during their time away. The occupancy cap is meant to prevent overcrowding homes with non-familial individuals, which can be disruptive for the neighbours due to noise pollution or competition for common amenities.
Residential property is sometimes bought out by private enterprises for the purposes of housing foreign employees. Under such scenarios, the occupancy cap of six unrelated persons per property still applies. While this cap was previously raised to eight persons between 2008 and 2017, URA lowered the occupancy cap back down to six persons in February 2017 after it was deemed that sufficient alternative accommodation such as hostels and dormitories had been built.
Partitioning to create subunits
Partitioning a unit is typically done by landlords to create more subunits which in turn allows them to rent out their home to more tenants. A landlord must apply for Planning Permission with the URA before they can legally conduct such reworks.
Additionally, partitioning features must not prevent a unit from functioning as a self-sufficient residential unit. In other words, all occupants within a home must still have access to features that are considered to be essential for living comfortably, such as the dining area, living area, kitchen, and bathrooms.
Registration of tenants with the URA
While property owners are not obliged to register their tenants with URA, tenants are required to update their official addresses with their employers. For cases where property is being rented out to accommodate foreign employees, landlords who will be away for extended periods of time may check for the list of persons registered to their homes via the Ministry of Manpower’s website.
Homeowners and tenants of residential properties may also apply for the Home Office Scheme to run administrative functions of a business, with a hiring cap of up to two non-resident employees at any one time. The types of permitted business activities are limited to those that can be conducted without clients or customers visiting the residential premises, such as consultancies or knowledge intensive businesses.
Short-term accommodation of all types
There are no workarounds when it comes to the aforementioned three month minimum period. Individuals who participate in the provision of short-term accommodations, including non-property owners, will face a minimum fine of up to $5,000 for their first offence, with recent penalties growing more severe owing to the frequency of such rule flouting.
High profile cases of illegal subletting
Renting to foreigners on short-term visits
While homeowners and tenants may think of themselves as capable of escaping the long arm of the law, recent cases where offenders of local subletting rules have proved otherwise. Just this year on May 30 2022, a man and his accomplice girlfriend were fined $1.16 million and $84,000 respectively for leasing and subletting a total of 14 units for short-term stay on platforms such as Airbnb and HomeAway.
As former real estate agents, both offenders were also stripped of their registered licences. Convicted with a total of 13 charges between them, the culprits will have their offences and rehabilitation efforts measured against them should they decide to reapply as real estate agents with the Council for Estate Agencies in the future. Violators of the Planning Act can be fined up to $20,000 or imprisoned for a period of up to 12 months per charge, or both.
This case goes to show that it is important for owners and tenants to conduct their due diligence. In this particular instance, the landlords were unaware that their homes had been sublet to foreigners. The foreigners, who were staying on illegally leased homes for periods between a few days and 12 months, were also unaware of the severity of the situation having booked their accomodations on popular short-term stay platforms. They were also required to assist with police investigations.
In response, Airbnb has also clarified that they now require hosts in Singapore to provide licence numbers and confirmation of authorisations in order to retain their online listings and statuses as hosts. Listings that do not set a minimum required stay of three months or are not updated with licence numbers have also since been delisted from the Singapore platform.
Hosting private parties in condo units
A woman going by the alias of Ms S also confessed to hosting parties of up to 10 to 15 people for special occasions at various apartments around town. Her reasoning was that hotels were too small and chalets were overrated. Such listings are typically characterised by an absence of a stipulated minimum rental period, drawing in customers who are looking for an accommodation deal that is much cheaper than private hotels.
Unfortunately, many landlords and tenants continue to participate in illegal short-term stays despite knowing the official rulings on the matter. In 2019 alone, URA investigated 800 suspected cases of illegal short-term sublettings, a rise in the 750 cases in 2018. Considering the uptick in unauthorised arrangements, URA has also stressed that property owners will be held responsible for offences committed within their property, including those done by a tenant.
Authorities are also working closely with the Condominium Management Corporation Strata Titles (MCST) to eradicate cases of illegal subletting. MCST’s existing measures include getting on-site security guards to check and register all visitors, as well as issuing warnings to owners who receive complaints from their neighbours. In addition, condo residents are also urged to report on suspected cases to their condo managers and URA via their official hotline.
All in all, renting and subletting still remains a viable means for landlords and tenants to diversify their income streams as long as they remain within the guidelines of local authorities. Short-term accommodations may not be permissible, but renting out parts or an entirety of a residential unit still remains a viable option. In fact, it might prove to be the more stable one since you won’t have to deal with the hassle of drafting new contracts, scheduling for home visits and getting reacquainted with your new tenant or housemates.
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