HOUSING AND DEVELOPMENT BOARD (Shop rent increase on assignment of tenancy)

Mr Ho See Beng asked the Minister for National Development and Communications whether he is aware that notice of a 100 per cent increase in rent has been served on a private limited company in a Housing and Development Board estate because of an increase in the number of shareholders in that company, and what is the rationale behind the increase.

Dr Tan Eng Liang (for the Minister for National Development and Communications): Mr Speaker, Sir, the shop referred to by the hon. Member was originally let out 4 1/2 years ago in October 1972. Recently, it was discovered that the tenant formed a private limited company with many shareholders. This constitutes an assignment of the tenancy. In accordance with the Board's policy, such assignment can be allowed subject to increase in the rental to the prevailing market level. Such increase is normal practice in transactions such as this. Obviously the 'old' rental is no longer applicable and the prevailing market rental must apply to the changed tenancy. The proposed new rental is based on recent letting of similar shops in the vicinity and is considered reasonable.

Mr Ho See Beng (Khe Bong): Mr Speaker, Sir, I would like to know whether or not this assignment constitutes an infringement.

Dr Tan Eng Liang: Mr Speaker, Sir, I really do not know whether or not it is legal. But where there is a tenancy agreement, it must be an agreement made between the parties concerned and, in this case, the HDB and the tenant in question, whoever it may be. But there is also provision in the agreement to say that should there be a change in the tenancy, the Board has the right to review the rental that is being charged. So if the Member wants a definite answer whether or not this is legal, I can check the document and find out. But this is the Board's practice and I am sure this is made known to most of the people who rent HDB shops.

Mr Ho See Beng: Mr Speaker, Sir, I want to know the meaning of the word "assignment." Does it mean a change of tenant in the tenancy agreement, or does it mean that a private limited company is not allowed to use its business name? What does it mean? I would like to know, because the word "assignment" is very vague.

Dr Tan Eng Liang: Mr Speaker, Sir, to satisfy the hon. Member with a good answer, I suggest that he let me go back and check so that I can give him a correct interpretation of what the word "assignment" means.