Property: How to avoid tenant trouble

Design: The Scientist

It is certainly not easy being a HDB flat landlord, especially when there are lots of 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 (MOP) of five years, before you can seek permission from the HDB to do so.

• You also need to provide the names, passport and work documents details, as well as update the HDB promptly on tenant changes.

Tenants To Avoid

• Those who urgently need to move in. There is a chance that they were evicted by their previous landlord. Our evicted tenants packed and vanished within days, clearing out quickly as if they’d done this countless times before. And as soon as we advertised for new tenants, we received offers with urgent requests to move in almost immediately. We suspect that the same few tenants flat-hop upon get kicked out after their little ruse gets uncovered.   

• Tenants 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?

• Tenants 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/Employment Pass. Take note of the expiration dates and make sure that it is within the rental lease period. As the landlord, you must practise due diligence and ensure they have the right and valid papers, or you’ll be guilty of harbouring an illegal immigrant.

• Generally, someone whose work or study visa expires 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 I always meet my tenants personally, at least during the handover of keys. Take the opportunity to remind your main tenant that he or she is not allowed to sublet your unit to anyone else who is not on the official list of tenants.

• I also met up with 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.” My HDB officer told me that, indeed, we must make regular checks and we have all rights to do so, as the property belongs to us.

• 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, so you get a better idea of whether they have been illegally subletting your unit. Look out for tell-tale 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; an unusually large number of shoes, cooking utensils, luggage, clothes or toiletries; unauthorised partitions in the bedrooms or living room; furniture you had provided being replaced with dormitory-style bunk beds. We actually found four bunk beds, to accommodate eight, in each room. My tenants also used extra cupboards as partitions in the living room to squeeze in more people.

• 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.

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 only stayed for 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 – to prevent colluding in your testimony, I suppose – which can be very intimidating. Be truthful. If you are an innocent victim of scheming tenants, like I was, you can be assured that the HDB will sort it out.

• Bring all documents that can prove your innocence. In our case, we produced proof that we had updated all tenants’ contacts with the HDB, as well as paid up our property and income tax on the rental promptly. Our rental lease contract clearly stated that our tenants were not allowed to add new tenants without our knowledge and consent; any additional tenant, up to a maximum of nine in accordance to the HDB’s regulations, will be subjected to an extra $200 rent each. You may consider adding a similar clause, which can eventually serve as proof of informing tenants in writing that subletting is illegal.

• The HDB will ask for your and the tenant’s agents’ contact and license details, as well as all your subtenants’ information. We don’t know if any action against first-time offenders will be taken, but it is kept on record.

• If you are lucky, the HDB may let you off with an official letter of warning. In serious cases of willful law-flouting, you may end up losing your flat.