Wednesday, April 13, 2011

Illegal subletting: HDB seizes 39 flats

FLAT owners who lock up one room to pretend they are living there, while illegally subletting the rest of their Housing Board (HDB) flats, are now less likely to get away with it.

The HDB said yesterday that it has more than doubled its enforcement checks, and a fast growing number of whistle-blowing neighbours is making its work easier.

Some 95 flat owners found this out the hard way last year when they were caught by the HDB.

Of these, 39 had their units compulsorily acquired immediately because they had 'blatantly infringed' the subletting rules, it added.

They included an owner of a flat at Pinnacle@Duxton who rented out his entire flat shortly after getting his keys.

Owners must live in their flats for five years before renting the whole unit out.

The rest of the 95 owners were fined from $2,500 to more than $22,000.

Giving its sternest warning in recent years, the HDB said in its statement that it takes 'a very serious view' of any illegal subletting.

And there may be no warning letter either to give offenders a second chance.

'We will take stern action against owners, including compulsory acquisition, even if it is the owner's first infringement,' it said.

As for the old trick of locking up one room to sublet the entire flat, this will be treated as unauthorised subletting of the entire flat, the HDB emphasised.

The enforcement numbers are up from the 28 flat owners that the HDB took action against in 2009. Then, only two faced compulsory acquisition while the rest were fined or warned.

The board more than doubled the number of checks to 7,000 last year from 3,000 in 2009.

It was also assisted by tip-offs from residents. About one in four - or 1,800 - inspections were done in response to these tip-offs, almost double the number in 2009.

The HDB said the most common tip-offs involved 'sightings of unfamiliar persons residing in the flat' over an extended time.

Industry experts said these tell-tale signs would include frequent changing of occupants, or foreign accents that give away the nationality of tenants.

OrangeTee senior manager Willy Wihardja, 29, for example, said he had tipped off the HDB when five Filipinos moved into the flat belonging to his Chinese neighbours shortly after they had bought it.

Agents and consultants said locking up a room to pretend an owner is living in his flat is still 'very prevalent'. But numbers have come down since the Council of Estate Agencies (CEA) was set up at the end of last year to regulate and license property agents.

Dennis Wee Group director Chris Koh said agents used to get around HDB rules in all sorts of ways, such as 'room rental agreements' which tenants sign officially to rent just one or two rooms, but have use of the whole flat in reality.

Since the CEA was set up, agents no longer dare to advise clients to do this because it is not worth the risk of losing their licences, he added.

Property agency PropNex's chief executive Mohamed Ismail said some offenders could be new flat owners who had not fulfilled the minimum occupation period of five years but needed money for cash flow or to service debts.

Another group would comprise private property owners who view their HDB resale flats as investments which give a good rental yield.

Before new rules kicked in last August to restrict the ownership of public flats, private property owners were allowed to buy HDB resale flats. They needed to live in it for only a year before being able to rent out the whole flat.

This sparked public concern that these buyers were speculating in the public housing market and abusing the HDB system.

The HDB put the number of private property buyers of resale flats last year at one in 10.

It reiterated yesterday that its flats are primarily meant for owner-occupation and those who wish to sublet must get its approval. It has a hotline (1800-555 6370) which the public can call to report suspected infringements.

All feedback will be kept confidential, it said.

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