Management of Rental Arrears Cases for HDB Rental Flats

Ms Sylvia Lim asked the Minister for National Development (a) how HDB manages cases involving families in arrears of rental for HDB rental flats under its direct management; and (b) what due diligence does HDB exercise before issuing notices of eviction in such cases.

The Senior Parliamentary Secretary to Minister for National Development (Dr Mohamad Maliki Bin Osman) (for the Minister for National Development): Mr Speaker, Sir, HDB has a proactive programme to help families in rental arrears. It will look into the circumstances of each case and tailor the assistance measures according to their needs. These may include providing financial counselling to help them better manage their finances, allowing them to pay their rent arrears in instalments, and working with the Community Development Councils (CDCs) to help them under the relevant ComCare schemes.

Unfortunately, some tenants are not cooperative and refuse to pay their rent, despite HDB's best efforts to engage them. An eviction order may then become inevitable. This will typically be after several warnings have been issued to the tenants. In practice, almost all tenants will cooperate with the HDB and avoid an eviction.

Ms Sylvia Lim (Aljunied): Sir, I have four supplementary questions for the Senior Parliamentary Secretary. Firstly, I would like him to clarify what are the trigger points at which the notice to quit will be issued to the tenant, that is, how many months of arrears typically before the notice to quit is issued? Secondly, if nothing is heard from the tenant, am I right that there are actually no checks done at the premises itself to determine whether the resident has any particular hardship before the notice to quit is sent? I have come across cases where there is a job change, for example, the tenant has lost his job but the notice to quit has still come despite that and apparently no questions were asked of the tenant prior to that. Thirdly, I have noticed also that when tenants request for reduction of rental in the midst of the tenancy agreement, this is usually turned down. So, is it the HDB's default position that there will be no change in the rental amount in the middle of the agreement, or are there any circumstances under which the rental fee could be changed in the midst of the tenancy agreement? Last of all, after the notice to quit is issued, of course, there is a period of time for the tenant to attempt to remedy the situation. But just prior to the eviction, I would like to ask whether there is any attempt made to check whether there is really a hardship case that has somehow slipped through the cracks or failed the attention of the authorities.

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Dr Mohamad Maliki Bin Osman: Sir, I thank Ms Sylvia Lim for the supplementary questions. First, I would like to assure Ms Lim and Members of the House that HDB is very sensitive to the needs of families in rental flats. On the trigger point for notices to quit (NTQs), firstly, usually HDB will send reminder letters to tenants who have not been paying their rent, after the first month and the second month, reminder letters, as in any other agencies. The NTQ is issued if the tenant has not responded after the third month of arrears. What happens usually is that in the reminder letters, we encourage the tenants to come to the Branch Office to talk to the HDB officers for us to understand their circumstances better. If they do not turn up, HDB officers do visit the families to understand the situation better. Sometimes, the Member is right, it is an issue of them losing their jobs, temporarily being affected by inadequate finances within their households.

Under such circumstances, HDB will work very closely with CDCs. They will refer the families to CDCs for the Work Support Programme. In the Work Support Programme, the families are then assessed as to how they can be assisted which includes, at some points, rental vouchers that the CDCs may offer to the families.

On the question of reduction of rental fees during the mid-point of their tenancy periods – often times, we do not change the tenancy fees midway because the financial situation of the families may vary across time. The tenancy agreement is for two years. We review tenancy agreements for two years because we want to encourage families to do better. And some families do actually do better because a large proportion of our rental flat tenants are first-timers who have the potential to own flats subsequently. We do not want them to be entrenched in their rental flats. Within that two-year period, if they do improve, we will try to get them to move on to purchased flats. Sir, because of that, we do not change the rental rates in the middle of the tenancy agreement. We try to help them with the Work Support Programmes with the CDCs so that they can try to get back to where they were. During the renewal of the tenancy, we look at whether they are able to move on to purchased flats or at some points where their income situation has improved, it is fair to raise the rental a little bit to be fair to the other rental tenants. More importantly is that we will assess the case individually to understand that if they do need help, help will always be available.

To the point on when we evict, although the notice to quit is issued at the point of the third month, I can assure Ms Lim and Members of the House that many, many months afterwards, HDB continues to work with the families. HDB continues to help the families. We do not usually take any further action until nine months or even several years after the family is in arrears. Since 2003, only three cases have been evicted because we tried very, very hard to make sure that the circumstances of the families are well understood and the families are given the necessary assistance.

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We acknowledge that when it comes to rental arrears, it is more than just a housing issue. It is really a social issue that sometimes families are trapped with. There are social service systems that we have put in place and we will galvanise the social service systems to help these families.