HDB RENTAL FLAT TENANTS IN ARREARS

[Mr Speaker in the Chair]

Mr Chng Hee Kok asked the Minister for National Development if the Housing and Development Board will indicate the number of cases of tenants of rental flats who are in arrears of rent for six months or more.

The Minister for National Development (Mr S. Dhanabalan): Mr Speaker, Sir, the number of tenants of rental flats who are in arrears of rent for six months or more is about 1,990 cases. This is as at 31st December 1987. This makes up 2.7% of the total rental units occupied. The total rental units occupied is 74,243. The actual amount owed is about $1.7 million or 27.9% of the total monthly rental collectable. The rental arrears come mainly from the 1-room and 2-room rental flat tenants.

Mr Philip Tan Tee Yong (Paya Lebar): Sir, could the Minister tell the House the steps HDB will take to assist those who are in arrears of rent and those who are in arrears of instalment payments?

Mr Dhanabalan: Mr Speaker, Sir, for tenants of HDB flats who are in arrears of rent, first of all, HDB can assist by allowing them to pay their arrears by instalments. If they happen to occupy a 3-room rental flat - there are not many but there are some who are in 3-room rental flats - then they will be allowed to sublet one of the rooms and supplement their income, thus enabling them to pay their rental. In some cases, they can be helped by allowing them to do some home-based work in the flat to help them generate additional income to pay their rents. When all these measures are not sufficient and they happen to occupy large flats, 3- or 4-room rental flats, then they will have to transfer to smaller flats.

In the case of mortgage loan repayments, those who are in arrears of instalment payments, the measures are similar. First of all, they will be allowed to reschedule their loans if it can be shown that they can meet their new schedule. In some cases, they may have taken loans for 10 years or 12 years on the basis of their financial circumstances at the time they bought the flat and now find that they cannot meet a 10- or 12-year loan repayment schedule. In such cases, we can extend the loan repayment schedule up to 25 years to enable them to pay.

We can also allow, and HDB does allow, purchasers of HDB flats to rent out one of their rooms for additional income. In some cases, a balooning repayment schedule will be of assistance. In such cases, we will reschedule their loans. And in some cases, they may have to sell their flat, if it is a 5-room flat or 4-room flat, and purchase a smaller flat. In other extreme cases, they may not be able to purchase a flat at all. They may have to move to a rental flat.

In all these cases, I have told HDB that if these people have to downgrade they should be offered an alternative flat immediately so that they are not in a position where they have no place to live.

I think Members, from their own experience, know by now that the people who cannot pay or are in arrears fall into various categories. There are those who cannot be helped by any of the measures that I have mentioned. These are mostly old people, with very low income, in poor health, maybe with children who are very ill. Quite a few have children who have mental problems. And they normally live in 1-room or 2-room rental flats. HDB has identified about 500 such cases which they think are genuine, financially strapped, cases. These cases were referred to the Ministry of Community Development. Further checks by MCD showed that not all of them are not able to pay. Some, in fact, as soon as MCD approached them said that they had no problem. They could get their children to pay or they had other sources. And they paid up.

But there are genuine hardship cases who cannot be helped by any of the measures that I have mentioned and who really cannot afford to pay the rent. These are basically people living in 1-room rental flats. At present, the measures that we have to assist them are rather ad hoc. For those who qualify for public assistance, we refer them to MCD. HDB does try to refer them to other welfare agencies, private charities, but we do not have a proper system of dealing with these cases. I have asked the HDB to work together with MCD to come out with a scheme that can assist this small number who genuinely cannot afford to pay even the rent of a 1-room rental flat.

There is another category who have genuine financial difficulties who can be helped with the measures that I have just mentioned. With some assistance, they can continue to occupy the rental or purchase flat that they now occupy. Others may require more time, as I mentioned. Their financial circumstances at the time they bought the flat may be different from what it is now. But if there is enough evidence that either they have got a new job or a son is coming out of NS and is starting work or a daughter is starting work, in other words, if they can show that they can meet the arrears if it is rescheduled, HDB will certainly consider. In fact, it will allow such rescheduling. I want to give an assurance to Members that this rescheduling will be allowed at any stage of the proceedings, as long as they can show quite clearly that they are able to meet such a rescheduled payment of a loan or arrears of rental. But after months of trying and discussions with HDB, if there is really no alternative and there seems to be no end to the financial problems that they have and it is quite clear that their financial circumstances have changed such that they cannot continue to occupy a 4- or 5-room purchase flat or even a 3-room purchase flat, then I am afraid that they will have to consider moving to either a rental flat or moving to a smaller purchase flat.

There are other cases which appear to have financial difficulties who cannot meet payments. But this is basically because of very poor budgetting habits, gambling, drunkenness and so on. In some cases, they may find that the measures that HDB has will be able to assist them. But HDB will in all these cases press hard for payment. HDB does not really have the manpower resources to counsel these people or to help them. They have to help themselves. From all the evidence, they have sufficient income to meet the payments but they do not have the right priorities or financial discipline. They must learn financial discipline.

Mr Chng Hee Kok (Radin Mas): Sir, will the Minister confirm that formal measures or schemes will be announced once the HDB has completed its study with the MCD?

Mr Dhanabalan: Sir, if the Member is referring to the few genuine cases that cannot even meet the rental payments, yes, of course, when we have completed our studies, I will announce it.

Dr Koh Lam Son (Telok Blangah): Sir, under what circumstances, if any, will HDB evict a tenant who is in arrears of rent?

Mr Dhanabalan: When all the measures that I have spelt out have been tried and they still cannot pay and they do not want to downgrade or their incomes are obviously sufficient but because of lack of financial discipline they are not able to meet, HDB will evict.

Dr Augustine H.H. Tan (Whampoa): Mr Speaker, Sir, will the HDB consider helping out with relocation expenses in the event of these hardship cases having to be relocated to smaller flats?

Mr Dhanabalan: I am afraid we have no such scheme at the present moment but there are enough charities in Singapore who can help genuine cases.