Why does HDB allow flat owners to sublet their flat?

Posted on 28 Jun 2017 |

HDB flats are meant primarily for owner-occupation. The flexibility to sublet is an option open to those who are eligible, and who need to supplement their household income, such as retired seniors and families in need.

There are, however, strict conditions in place to ensure that HDB flats are not exploited for profit-generating purposes right after purchase. For example, flat owners must obtain HDB’s approval before they can sublet their whole flat, and ensure that their subtenants meet all eligibility criteria, and the non-citizen quota for subletting of flats. Neither are owners who are Permanent Residents allowed to sublet their entire flat.

Another important condition to be met is the Minimum Occupation Period (MOP), which refers to the period of time that flat owners have to occupy their flat physically, before being able to sublet.

The number of flats that are currently being sublet forms only about five percent of the total number of home-ownership flats. This means that the vast majority of our flat buyers do purchase flats for occupation.

However, some have abused this policy and its good intentions. There are occasional accounts about how some flat owners are treating their flats as investment vehicles and are renting them out for profit, with no or little intention of occupying them in person within the MOP. Those who do so in contravention of the rules face the prospect of losing their flat, as HDB takes a serious view on unauthorised subletting. In 2016, HDB carried out about 8,000 flat inspections and took action against 38 flat owners for unauthorised subletting. This includes issuance of warning letter, imposition of a penalty, and repossession of flats.

Find out more on HDB’s stand towards unauthorised subletting .