3-room Bidadari flat rented out at S$4,100, before reaching MOP, with HDB approval

3-room Bidadari flat rented out at S$4,100, before reaching MOP, with HDB approval

SINGAPORE — Despite the fact that any HDB flat that has not been occupied for five years typically cannot be rented out, a three-room HDB flat in Bidadari was being rented out for S$4,100 a month with approval from the Housing Development Board (HDB).

HDB flat owners are required to physically occupy the flat during the Mandatory Occupation Period (MOP) before they are allowed to sell their flat on the open market or rent it out.

However, a listing on 99.co showed that a three-room flat in Alkaff Oasis, a Built-To-Order project by HDB at 108A Bidadari Park Drive, was up for rent at S$1,700 more than the median rent for a similar flat in Toa Payoh in the fourth quarter of 2022.

The development is only two years old, which means that its five-year MOP is not up yet.

According to HDB’s launch details, a 3-room flat at Alkaff Oasis costs between $303,000 and $356,000.

If the flat was rented out at $4,100 a month, the flat owners could recoup the cost of the flat within years.

The listing on 99.co, however, was removed on Thursday.

HDB explained that exceptions are granted on a case-by-case basis

However, according to MSNews, HDB explained that exceptions can be granted on a case-by-case basis if owners submit an appeal due to “unforeseen and genuine circumstances”, such as being overseas for work or studies, medical reasons, or financial hardship.

As for the case of the two-year-old Bidadari flat being allowed to be rented out, HDB said the owners were posted overseas for a period, and they were unable to stay in the unit.

HDB also noted that there is a time limit of one or two years for approvals, and flat owners will have to serve out the full MOP when they resume occupation of the flat.

In other words, the period when the owner rents out the flat is not counted in their MOP.

HDB added that out of the 117,587 applications for renting out whole flats that were approved from 2020 to 2022, less than 1.5% were flats that were allowed to be rented out during the MOP due to “extenuating circumstances”.

HDB has reiterated that they take a serious view of violations of the MOP rules, despite the exception granted for the mentioned Bidadari flat.

HDB stated that they “will not hesitate to carry out enforcement actions against those who have flouted the rules.”

Between 2020 and 2022, the Board has taken action against 368 homeowners who rented out their flats without seeking approval.

Depending on the severity and circumstances of the breach, HDB may impose a financial penalty of up to S$50,000, issue a written warning, or compulsorily acquire the flat.

Netizens urged HDB to regulate rental price

Singapore’s private and public housing rental market is expected to continue upward in 2023 due to rising costs and surging demand.

The Business Times even described that 2023 would be “another year of pain for tenants” as higher property taxes and interest rates are likely to contribute to more increases in rents.

Putting aside the exceptions granted on a case-by-case basis, some netizens have raised concerns about the need for authorities to monitor the rental market, given the current high rental prices that could be exploited for speculation.

One netizen who commented on MSNews’ Facebook post suggested that HDB should increase enforcement actions as they believe that many HDB flats are being rented out illegally due to the attractive rental prices.

Another comment suggested that HDB should limit the owner’s rental price to cover only the monthly installments and prevent them from earning extra income:

A netizen commented on Mothership’s Facebook post, questioning whether HDB should have control over the rental prices, given that the units have not yet reached their MOP and require approval before being rented out.

A netizen expressed concern that HDB’s exception on renting out flats still under MOP period could lead to a slippery slope, as paying the loan is not related to occupancy and allowing owners to rent out their flats goes against public housing objectives from 50 years ago.

More netizens astonished by the excessive high rental price

Several netizens were shocked by the exorbitant rental price of a 3-room Bidadari flat, with one commenting that the price of $4,100 equates to an estimated annual sum of $50,000, and suggesting that such high rental prices could enable one to retire in Malaysia and live solely on the rental income.

A netizen questioned what would qualify as “extenuating” reasons to enjoy the exception to rent out his 2-year old BTOs and move back to live with their parents, and suggested that some people might be eager to rent out their BTOs for extra income due to the lucrative rental market.


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