New cap for tenants renting private properties

Singapore – According to a letter sent by the Urban Redevelopment Authority (URA) to the real estate agencies, private residential properties may be rented out to at most six unrelated persons effective from May 15. However, the previous threshold was 8 unrelated persons. After the prescribed, the existing tenants will not be allowed to complete their rental tenure.


The letter also stated that the new occupancy rules will apply irrespective of whether the tenancy agreement expires after the implementation date. All the landlords are bound to comply with the rules while failing to comply with the rules may lead them to investigations and they may have to face legal consequences. The changes in the occupancy cap were passed in the Parliament as part of the amendment in the Planning Bill.


As per Mr. Ku Swee Yong, the International Property Advisor, the small or medium sized businesses that rent out their entire apartments to their employees or work permit holders, are most likely to get affected by this new rule.


The costs of the small businesses are likely to be increased because the businesses having 8 employees, will now have to rent two apartments instead of one. Home sharing will also suffer as part of the new rule and landlords will not be able to rent out their apartments to two large families.


This new bill will help in controlling the security situation in the country, according to the defense analysts. However, this will have a positive impact on the economy as well. The income tax on the income generated from the rental of property will increase and the government will be able to accumulate more funds.


It is also anticipated that this new rule will ignite the fire of protests and processions held by the owners of small or medium sized businesses. They are hardly able to meet their expenses and by this new rule, either they would have to refuse residency to their work permit holder workers or they would have to rent two apartments which are undoubtedly costly. Both the cases are probable. The URA, on the other hand, is studying the option of creating a new category of private homes that will allow short term rentals.


The owners of Housing Board flats, however, can allow a maximum of six subtenants for a three room unit while a four room unit can hold a maximum of nine subtenants.




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