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Renting out your HDB flat or private property, or even a spare bedroom, can generate attractive passive income. With the new hefty seller’s stamp duty aimed at curbing speculators, some private property owners may also prefer to sublet instead of flipping their property to avoid a dent in their profits.
Propnex group district director Kelvin Fong and Marcia Lai, director of Faith Property Network, detail all the HDB rent rules you need to know before you draw up that rental lease agreement.
14 HDB Rent & Sublet Rules
1. Must complete Minimum Occupation Period (MOP)
As a general rule of thumb, to rent out the whole HDB flat, make sure you satisfy the 5-year Minimum Occupation Period (MOP).
- Most HDB flats: 5-year MOP
- Resale HDB without grants bought before 30 Aug 2010: 3-year MOP
For homeowners of a non-subsidised (never receive grants) resale HDB flat bought off the open market without a housing grant – if your application to purchase was dated before Aug 30, 2010, you need to live there for 3 years, or 5 years if your papers were received after this date. Those who bought a flat directly from the HDB or enjoyed a housing grant from the CPF board must fulfil the MOP of 5 years.
2. Foreigners must have valid visa passes
Make sure foreign tenants have valid papers – Employment Pass, S Pass, Work Permit, Student Pass or Dependant Pass. “Take note of the expiry date and make sure it is valid throughout your tenancy,” says Kelvin.
3. Maximum number of tenants
Keep within the maximum number of tenants allowed to occupy your home. For example, 4 tenants are allowed in a 1 and 2-room HDB flat, 6 persons in a 3-room HDB, and 8 in 4-room and larger HDB units.
| HDB Flat | Maximum tenants | Bedrooms you can rent | Total no. of people living in the house |
|---|---|---|---|
| 1 & 2-Room | 4 | 0 | 0 |
| 3-Room | 6 | 1 | 6 |
| 4-Room & larger | 8 | 2 | 8 |
*Information from HDB
Graphic stickers on the balcony doors play up the linear aspect of the interiors in this 4-bedroom Executive Condominium (EC).
4. Cannot rent to HDB & EC owners
Take note that you cannot rent out your flat to owners of HDB flat owners (even if they rented out their own HDB), and Executive Condominium (EC) homeowners who have not met their 5-year MOP. The only exceptions are if the potential tenant is divorced or legally separated, or is eligible to sublet his or her own flat.
5. Get HDB's online approval before renting
Finally, remember to get the HDB’s approval before you rent out your unit. Submit your application via the online HDB portal. It costs $9 per bedroom rental application, and allows you to sublet your flat for three years.
Your tenant must also pay stamp duty to the Inland Revenue Authority of Singapore. The same MOP rules apply to Executive Condominium owners who have taken a grant or bought it directly from HDB.
6. You can only rent out 1 bedroom for 3-room HDBs
You are only allowed to rent out bedrooms if you own a 3-room or larger HDB flat. For 3-room HDB flats, you can sublet 1 bedroom, and for 4-room or bigger HDB flats, you can rent out 2 bedrooms. Although you don’t need to seek approval from the HDB, you are required to register your tenant’s details within seven days of subletting a bedroom.
The other rules regarding your tenant’s property ownership status and valid papers for foreigners still apply. “Do take note that your tenant must still pay stamp duty for room rental,” says Kelvin.
A smart home kitchen setup in Blossoms by the Park condominium. Photo Veronica Tay. Art direction Nonie Chen
7. Rent out condominium rooms
You don’t have to seek approval from any government agency to sublet private property but do ensure that the duration of your tenant’s work permit is valid to avoid running afoul of immigration rules. Again – make sure your tenant pays stamp duty.
8. "Lock 1 bedroom door" is a myth
"A property agent told me that as long as I "lock one bedroom door", I can sublet the rest of my HDB unit. Is there any truth to this?"
“No. This is against HDB rules and they can confiscate your unit,” warns Marcia. The landlord has to physically live in the home if he is subletting his rooms, or fulfill the five-year MOP and other requirements if he opts to let the whole unit.
Homeowner Mrs Liang XL, feared she’d lose her 5-room HDB flat when she received a warning letter from the HDB for subletting it illegally. “I’d thought that as long as I kept one room for my occasional use, it was okay to rent out the rest of the house! Fortunately, because I had fulfilled the MOP of five years, the HDB officer advised me to apply for approval and let me off with a stern warning.”
9. Landlord cannot disturb tenant unnecessarily
What are the responsibilities of a landlord to the tenant? Likewise, vice versa, what are the tenants' responsibilities?
Cannot collect rent before due date
The landlord should not disturb the tenant unnecessarily and cannot ask to collect rent before the due date, says Marcia. Make sure all fees borne by the homeowner are duly paid. “One tenant who rented an HDB unit was annoyed to come home to a court notice stuck on the gate,” recalls Marcia. “It was issued by the Town Council – turns out the owner had not paid the conservancy fees for months.”
“The tenant must also heed the tenancy agreement, including important terms like ensuring that only registered occupiers are allowed to stay on the premises,” advises Kelvin. “They are not to sublet or sub-divide the unit to lease to others.” If the landlord decides to sell off the apartment, the tenant must also allow pre-arranged viewings.
10. First month repair costs by homeowner
"What happens if tenant damages my furniture or home appliances?"
The contract generally comes with a warranty period of one month. All repair costs within the first month are borne by the owner. After this, the tenant has to bear the first $150 (or depending on the amount agreed by both parties) of repair costs, while the landlord takes care of the rest. For appliances that cannot be fixed, the landlord has to replace it at his own cost.
Tenant should service the Aircon every quarter
If your HDB unit comes with air-conditioning, the tenant must get it serviced every quarter, says Marcia. “But if it is beyond repair and the tenant has receipts to prove that he has fulfilled the servicing requirements, he has the right to ask for a replacement.”
11. Landlord or tenant pay for wall painting?
"My tenant wants me to repaint the walls at my cost, but this was not requested in our contract. Am I indeed liable?"
No, says Kelvin. “Any request from the tenant must be accepted by the landlord in the contract. After it is signed, the landlord is not liable to pay for such requests. The tenant must also seek the landlord’s approval if he wants to repaint the walls at his own cost, and must return the apartment to its original condition when he hands it back.”
12. Tenant pays rent late
"My tenant often pays his rent late. Can I impose an interest charge?"
“Most contracts state that a 10 per cent interest fee per annum will be charged once the rent is overdue for more than 14 days,” says Marcia.
In one extreme case, a tenant defaulted on his rent for three months despite receiving a Letter of Demand from the landlord’s lawyer that required him to pay up within 7 days. On the 8th day, Marcia accompanied her client to the police station to make a report before evicting the tenant. “Having a police report in hand protects the landlord in case the tenant creates trouble.”
13. Offset final month of rent with security deposit
"My tenant has asked me to use his 1-month security deposit to offset his final month of rent. Is this okay?"
Some landlords who let out their HDB bedroom or unit without hiring a property agent think there is no harm in doing so. However, when your tenant hands over the room or unit, you should check against your inventory list and take note of damages or missing items. The security deposit is your safety net to cover the necessary repairs or replacements before you refund the rest.
14. Can I back out of the rental contract halfway?
"I've signed a 1-year contract with my tenant. What happens if one of us wants to back out halfway?"
This hinges on how the tenancy agreement is worded. “If you broke the contract and your tenant now has to rent a similar property at a higher cost, you must compensate the difference and for any expenses incurred when they shift to the new place,” says Kelvin.
If your tenant bails out early, he must find you a replacement tenant for the remaining period of the lease. If the new tenant is paying lower rent, your first tenant must cover the difference.
15. Property agent commission for rent
What about the property agent’s commission? If this clause is provided for in the contract, the party that defaulted has to reimburse the pro-rated commission to the other side.
“Landlords can take these costs out of the security deposit,” says Marcia. What happens if your tenant has to terminate his contract because he loses his job in Singapore or is posted abroad? This depends on whether you have agreed to a diplomatic clause in the contract and if he can show documented proof from his company. If he gives sufficient notice as stated in the contract, he is free to leave without incurring any charges.