Private properties rental – what regulations should you take heed of?

Image credit: Wikimedia Commons

Those that are considering private properties rental, must adhere to several regulations before they do so.

Before you consider private properties rental, be mindful that private properties approved for residential use may not be used for short-term rentals on a daily or weekly basis. Private residential properties must be rented out for at least three consecutive months.

Before private properties rental, you have to adhere to the following rules.

private properties rental
Image credit: Wikimedia Commons

Be mindful of the Occupancy cap before you rent out private properties you own

With effect from 15 May 2017, the maximum number of unrelated occupants that may be accommodated in a property is six. This applies to all persons residing within your home. Unrelated occupants refer to any persons who are not part of the same family unit. Domestic caregivers hired by a family are considered part of the same family unit.

Example: A family of four intends to rent out a part of their home. They will only be able to accommodate two additional persons.

For multi-generational families, including any domestic workers and caregivers that may be hired to serve in such families, are considered as part of the same family unit.

Example: A family of five has a domestic worker and a caregiver. They are considered as part of the same family unit and are not subject to the occupancy cap.

Before private properties rental to companies, you have to know that employees of the same company are not considered related occupants and will be subject to the occupancy cap.

There is a cut-off date for all tenancies above the occupancy cap. For example, if you have already signed a tenancy for seven or eight persons before 15 May 2017, it may run its course until the cut-off date of 15 May 2019. This will apply to all tenancies regardless of their contracted end-date.

If you want to do partitioning before you rent out private properties you own, you have to be mindful that any internal partitioning works carried out on the property must not compromise the nature of the property as a single self-sufficient residential unit with essential features such as a living/dining area and kitchen.

URA announced on May 8 that the minimum stay duration of three months will continue to apply for any short-term accommodation in private residential properties. This decision is taken after extensive consultations with diverse groups of stakeholders on the proposed regulatory framework for the use of private residential properties for short-term accommodation (STA).

Based on a national survey commissioned by URA, the majority of Singaporeans supported the proposed regulatory framework for STA. But several home-sharing platform operators said that the proposed rules were overly restrictive and wanted a lighter touch approach.

Given this impasse, URA will not proceed with the proposed regulations at this stage.  Instead, it will continue to monitor the situation, as well as broader developments on the STA scene. URA remains open to reviewing the position in future, if and when platform operators demonstrate that they are prepared to adhere to the regulatory framework.

In the meantime, the use of private residential properties for short-term accommodation of less than three consecutive months remains illegal.

Extensive consultations on STA and proposed regulatory framework

To better understand the complex issue of STA, URA has been consulting key stakeholders extensively since 2015. These include members of the public, Management Corporations (MCSTs) and Managing Agents (MAs) of condominiums, neighbourhood committees, hotel and serviced apartment industry players, as well as home-sharing platform operators.

In April 2018, URA and relevant agencies formulated a regulatory framework to facilitate STA in private residential properties, while safeguarding the safety, privacy and security of homes, and the residential character of local communities. URA also commissioned a national survey in the second half of 2018, consisting of face-to-face interviews with more than a thousand private homeowners.

URA  said that while the majority of Singaporeans supported the proposed rules, there were several key stakeholders who expressed reservations. The MCSTs expressed concerns with the greater responsibilities placed on them and their ability to administer the controls within their estates.

Several platform operators who were engaged said that they could not support the proposed regulatory framework. In particular, they did not support the proposed threshold for owners’ consent, and the cap on permissible nights for short-term accommodation.

Based on the totality of responses from all stakeholders to the proposed framework, URA said that it has decided to maintain the status quo at this time. URA will continue to enforce the current requirement for a minimum stay duration of three months in private residential properties.

URA said that it remained open to the possibility of implementing a framework that could accommodate STA in the future, if and when all stakeholders are prepared to fully commit to regulations that seek to ensure that such activities do not adversely affect our living environment.

If you are planning on private properties rental as an investment but are ensure of funds availability for purchase, don’t worry because you can get help from mortgage brokers. Mortgage brokers can set you up on a path that can get you a home loan in a quick and seamless manner. Mortgage brokers also have close links with the best lenders in town and can help you compare Singapore home loans and settle for a package that best suits your home purchase needs. You should also find out about money saving tips before investing in rental properties.

Written by Ravi Chandran

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