Owners lose 5-room HDB flat after renting it out illegally
The owner of this five-room HDB home thought that by hiring a realty broker willing to go beyond the minimum period for occupation (MOP), the Housing Board would not have to enforce the MOP.
The rogue agent even submitted a fictitious tenancy to cover their tracks.
The trick was discovered only one month after the tenants were moved in. The HDB had to repossess the owner’s apartment, while the rogue agency was fined and banned by the Council for Estate Agencies.
CEA websites highlight cases of estate agent misconduct and serve as a warning to homeowners.
A property investor came up a clever scheme to make it foolproof. He would buy a newly built public housing unit. He would then hire an estate agent who was shady and ignore HDB’s rules in order to rent them out. What could possibly happen?
HDB has easy access to such data, which allows it to identify illegal rentals.
A levy is required to validate all tenancy arrangements. Both the landlord and the tenant should not avoid this procedure because they both risk losing a great deal if either of them decides to breach their contract.
It is clear from past experience that the enforcement of laws can be quick and swift – often within a few weeks after an offense has been committed.
In the end, it’s all true, although it shows us how to be penny wise and pound fool.
If you think that the authorities will not check all of your lines, then it’s foolish.
As most of these documents are now stored online, it’s easier for authorities detect any infractions. They can do this by putting in place an automated system that flags suspicious instances.
This owner had three bedroom so he could rent them out legally, while still living in the third. In fact, the rule requiring minimum occupancy was designed to achieve this. He had to live in his apartment for at least 5 years, starting from August 2018, when he first bought it.
But in the month of May, 2019, the owner called an agent and asked to rent his entire apartment. He had violated the rule for over four-years. The agent nevertheless went ahead with the marketing of the flat. A couple who were foreigners turned up at the viewing in late August.
HDB agents visited the flat several days after receiving this letter. They discovered that the tenant was living with his family. Following inquiries, it was confirmed that neither the owner nor the tenant resided in the apartment.
Due to this, the tenant was forced to vacate his home and move the following month. As a result, they suffered great discomfort and lost money because they had to search and move into a brand new home in such a short period of time.
The couple rented the flat because they were told that their children can “use the whole apartment”.
When signing the tenancy, the couple worried that they signed a contract for “room renting” instead of the entire apartment. But the agent assured the couple that they were able to use all of the rooms. She added that it was only a “formality”.
After signing, the agent sent the agreement to Singapore’s Inland Revenue Authority for stamping and validating. By doing so, the agent falsely declared that the flats were partially leased. However, the tenants owned all the units.
Shortly after tenants moved in, a letter was received by the HDB from September reminding the owner that it was against the terms and condition if the owner did not live there or rented the entire flat out without written approval.
The HDB subsequently acquired the flat, with the agent suspended for 4 months and ordered to pay legal costs plus $7,000.