Owner lost 5-room HDB apartment after renting it illegally
Recent cases show how enforcement action can be fast and furious, within weeks following the offence.
The flat owner, who had three rooms, could legally rent two while living in the other. It is for this reason that the minimum occupation requirement was imposed, which stipulated he had to reside in the flat from August 2018, the date he bought the property, for a period of at least five consecutive years.
But in May 2019 the owner contacted a leasing agent to lease his entire apartment. This is a violation that exceeds four years. The agent decided to sell the flat anyway, and an international couple came for a viewing in August.
The couple agreed that they would rent the apartment because they had been assured by the landlord that both the parents and children could “use” the entire flat.
The owner who bought the HDB flat with five rooms thought he was able to get around the Housing Board’s MOP, which is usually five years. This was because he found an agent who went the extra mile.
Even a phony tenancy agreement was submitted by the rogue agents to try and cover up their deed.
But, the scam was exposed only a few weeks after the tenants had moved in. Both parties suffered severe punishments – HDB repossessed the flat and censured the agent.
A clever investor created a scheme that was “foolproof”. He bought a new unit of public housing, hired a dubious estate agent and ignored HDB rules when renting it out. What could go horribly wrong?
It happens that pretty much everything is wrong, even if it gives us all a perfect example of pennywise pound stupid behaviour.
CEA highlights professional misconduct cases by estate agents on its website. They serve as cautionary tales for homeowners because these stories offer important lessons to protect your investments.
As an example, it would be foolish for you to think that you could fool the authorities using false and misleading documents and assuming that no one is going to check each line.
HDB can detect illegal rentals easily, as they already have this data. This is especially true when owners are still not up to date with their MOP.
By implementing a system for flagging suspicious situations, the authorities will be able to detect any violations.
To be considered valid for tenancy agreements, you must pay a mandatory levy. The process is essential for both tenants and landlords, because either party could end up losing out if the agreement is not followed.
The couple was concerned when it came time to sign the tenancy agreements that they had signed one for “room rent” and not the entire flat. They were told by the agent they could rent all the rooms.
After the tenants moved into the unit, the owner, in September received a notice from HDB reminding him that he had violated the terms of conditions by not living there or renting out the whole apartment without written approval.
HDB officers arrived at the flat just a few days later and found the tenant living alone with his relatives. Inquiries made later confirmed that the owner didn’t live in the flat and that it was rented by the tenant.
After the agreement had been signed, the agent went to the Inland Revenue Authority of Singapore and asked them to stamp it. In so doing, she made an inaccurate declaration, namely, that the flat was partly leased out, when the tenants actually had the entire unit to themselves.
The HDB then acquired the apartment compulsorily. Meanwhile, the agent had to be suspended for four-months and pay a penalty of $7,000 plus legal expenses.
They had to move out the following month. They had to relocate and find a new place in a very short time. This caused them great hardship and cost money.