HDB clamps down on illegal subletting
Showing that they mean business, HDB will repossess a flat that had been illegally rented out after being tipped off.The 4rm flat at Blk 336 Bukit Batok Street 32 belonging to a registered real estate agent was rented out to 3 Burmese couples without HDB's approval for $1,900 a month. It was bought in 2007 for $150,000 in cash (so cheap!?) and is now roughly worth $320,000 based on recently transacted prices. HDB however will return the owner $150,000 (the original price) less penalties which was not specified.
Although the owner might have missed out on potential capital gains, it might not have been a loss making venture if the penalties are not too severe - considering the owner already pocketed roughly $45,600 in rental if it was rented out for the full 2 years.
And for those wondering what kind of annual yield this translates to, it is a staggering 15.2% annual return on investment (~$1,900 rent x 12 months / $150,000 capital cost).
It was also reported that the owner was connected to two other cases of illegal HDB subletting, which HDB will also be taking legal action to compulsorily acquire.
The best part? The owner who owns 5 other private properties and is also a registered housing agent by profession claims that he is unaware of HDB rules.
HDB has also taken action against 56 other errant owners (out of ~1,000,000 flats in Singapore?) between January 2008 and December 2009 and fining them between $1,000 and $21,000 (peanuts if the owners were yielding as much as the highlighted case). But if this news really make errant owners think twice before illegally subletting, we suspect this might cause rental prices to climb.
So what are you waiting for? Call 1800-5556370 (HDB Hotline) to report any "suspected cases" now and see if that nasty neighbor of yours can still flash his new beemer around your HDB car park!
FYI:
Maximum number of subtenants allowed in HDB flats:
- 1 & 2rm: 4 people
- 3rm: 6 people
- 4rm and larger: 9 people
Minimum Occupation period for subletting of whole flats:
- Flats bought directly from HDB: 5 Years
- Resale Flats bought with CPF Housing Grant: 5 Years
- Resale Flats bought without CPF Housing Grant: 3 Years
Your thoughts here.
via Today Online, Channelnewsasia, Straits Times
Posted on 15-03-2010 10:53 | By Francis
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