URA limits number of unrelated tenants to 6

This article is more than 12 months old

Change in occupancy cap for private homes to take effect on Monday

When she moved out of her family home last year, Ms Yvette Lim, 34, thought she could eventually sublet her old bedroom to help her family pay the rent.

With a floor area of 4,500 sq ft, her Choa Chu Kang house, where six of her family members now live, could easily accommodate a few more tenants, she calculated. But her plans have been dashed.

From Monday, landlords can rent out private homes to no more than six unrelated people.

If there are six related people living in the residence, no tenants are allowed.

The move reduces the occupancy cap from eight.

Existing tenancy agreements with seven or eight tenants will be allowed to run their course until May 15, 2019.

After that, the rules will kick in, regardless of the contract's expiration date, said the Urban Redevelopment Authority (URA) in a letter on Thursday to registered property agents.

For HDB flats, the maximum subtenants allowed for a three-room unit and a four-room or bigger unit remains unchanged at six and nine, respectively.

Ms Lim, an administrative assistant, told The Straits Times: "Eight was just nice for us, but it is a pity now, because the house will be quite empty. One of the five bedrooms will be unused."

Responding to queries from ST, a URA spokesman said the rule change ensures that residential premises are "consistent with the character of the local community and integrate better with the neighbourhood".

He added that it takes into account "the strong supply of alternative accommodation" that caters to non-familial groups of occupants, such as hostels and dormitories.

Some residents and property watchers ST spoke to welcomed the move, saying it will reduce disruption and noise caused by overcrowded units.

PropNex Realty chief executive officer Ismail Gafoor said: "Private properties are meant to be exclusive, with owners of the development having the quiet enjoyment of the facilities and lifestyle. In order to maintain this exclusivity, the cap of six tenants is reasonable."

However, landlords such as Mr Peter Chia do not agree.

The retiree, who is in his 60s, relies on rental income from his four-bedroom unit in Pacific Mansion in the River Valley area, where he lives with five tenants.

He hopes to get two more.

Mr Chia will have to take down his advertisement if he is unable to rent out the empty bedroom in his 1,500 sq ft apartment by Monday. This is a loss of $900 to $1,200 in potential monthly rent, he said.

The new rule will also affect home-sharing, such as AirBnb, in the future.

URA is studying the option of creating a new category of private homes that will allow short-term rentals.

An occupancy cap of six means future home-sharing hosts will not be able to lease out an apartment to, say, two large families, said Mr Ku.

Some analysts wondered if the cap could have better reflected the size of the home.

Cushman & Wakefield research director Christine Li said: "A better implementation could have been to peg occupancy caps to the number of bedrooms, similar to that for HDB flats."

URA said this is not the case as there are various types of private property from small apartments to bungalows. Said a spokesman: “We have simplified the control for greater clarity to the public by not adopting a stratified occupancy cap control based on unit sizes.”

The Thursday announcement gave three days for real estate agents to react and could trigger a surge in rental contracts being renewed or signed over the weekend, said ERA Realty key executive officer Eugene Lim.

On social media, some agents have started asking landlords with a sizable number of tenants to quickly renew their tenancy pacts.

Said Mr Lim: “We have not seen any surge of sign-ups yet, but we do not rule out that some landlords will try (to do so) over the next few days, before May 15 arrives.”

Mr Lim believes HDB occupancy caps may soon follow suit too.“There is a possibility that HDB may align the caps accordingly since the spirit of this rule change is to prevent overcrowding within residential units,” he said.