ILLEGAL SUBLETTING

ILLEGAL SUBLETTING: 7.

Ms Audrey Wong Wai Yen asked the Minister for National Development (a) whether there is an estimate of the number of HDB flats that have been sublet without permission from HDB; and (b) what is the cost to the Government in terms of rebates on service and conservancy charges given to owners who illegally sublet their flats.

The Senior Minister of State for National Development (Ms Grace Fu Hai Yien) (for the Minister for National Development): Mr Speaker, Sir, subletting HDB flats without HDB's approval is an infringement of the lease conditions. We take a serious view of this, as HDB flats are primarily meant for owner-occupation. Flat owners caught subletting their flats without approval may have their flats compulsorily acquired by HDB or incur a financial penalty. HDB will also recover the rebates on service and conservancy charges given during the period of unauthorised subletting.

However, we recognise that some flat owners need to sublet their flats for supplementary income. They may obtain HDB's permission to do so if they meet the required Minimum Occupation Period (MOP). Today, 3% (or about 27,300 units) of the total stock of HDB flats have obtained approval for subletting.

The number of subletting transactions increased by about 69% from 3,902 cases in fourth quarter 2009 to 6,606 cases in first quarter 2010. Some of the

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increase in approvals may be due to increased publicity of HDB's enforcement against unauthorised subletting. However, we are unable to estimate the number of unauthorised subletting or the cost to Government in terms of rebates on service and conservancy charges given to such owners.

Between January 2008 and March 2010, 59 flat owners were found to have sublet their flats without HDB's approval. Of these 59 cases, HDB repossessed seven flats and imposed fines of between $1,000 and $21,000 on the rest.

HDB has stepped up enforcement on unauthorised subletting. Besides routine inspections and spot checks, HDB also seeks the assistance of residents to call its dedicated toll-free hotline to report suspected cases of unauthorised subletting. HDB lessees who have sublet their flats without authorisation should regularise it immediately by seeking HDB's approval.

Ms Audrey Wong Wai Yen (Nominated Member): Thank you, Senior Minister of State, for your reply. I have just one supplementary question. My question was actually motivated by the fact that the number of officially authorised sublet flats seemed lower than what you see in the classified advertisements. My question is: is there enough supply of flats in the market to satisfy the demand from Singaporeans, PRs or foreigners who may not want to buy flats or cannot buy their own flats, and need to rent?

Ms Grace Fu Hai Yien: We recognise that HDB provides housing for a very wide range of occupants, including, as the Member said, permanent residents or foreign workers who require housing on a rental basis. That is the reason for us to review our rules for subletting. If you look at the longer term in the past, we have

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been relaxing the rules to allow more flats to be available for subletting. We believe it is an area that we need to continue to review and we will do so, and we will basically look at the total demand of housing in Singapore.