Illegal Subletting in Singapore: Laws and Penalties
Subletting has become increasingly commonplace and holds practical appeal to the parties involved. For instance, the main tenant of a property who is no longer able to occupy the premises but is unwilling to break their lease can benefit from subletting the space to a subtenant who is able to do so. This can maximise the use of the property, and the landlord can continue receiving rental payments from the main tenant who is in turn paid by the subtenant.
Although the practice of subletting may appear sensible, there are laws imposed in respect of residential properties in Singapore which make subletting illegal in certain circumstances. Those involved, including the landlord, may be penalised.
If you are a landlord renting out your property to a tenant in Singapore, this article will provide an overview of how illegal subletting may occur on your property and the measures you can take to avoid various related offences and penalties.
In this article, we will cover:
- What is subletting?
- When is subletting illegal?
- What are the penalties for illegal subletting?
- What can you do to prevent illegal subletting?
- What can you do if your tenant illegally sublets a unit without your permission?
What is Subletting?
Subletting refers to an arrangement where a tenant allows someone to rent all or part of a house or property (e.g. a bedroom) that the tenant themself is renting from the landlord.
For example, you are a landlord who rents out an apartment to Tenant A. Tenant A is considered to be the main tenant of the property. Suppose Tenant A decides to rent out a room in the apartment to a friend of his, Tenant B. The rental arrangement between Tenant A and Tenant B is referred to as subletting, and Tenant B is considered to be the subtenant in this case.
When is Subletting Illegal?
In general, subletting is not permitted under the following circumstances:
- Where the main tenant sublets without informing and obtaining the approval of the main landlord.
- Where the main tenant sublets where there is a contractual term in the tenancy agreement restricting the practice.
- Where the main tenant sublets the property to more than 6 unrelated persons per property. An unrelated person refers to anyone other than those belonging to the same family unit. However, do note that domestic helpers employed by a family are an exception and considered part of the family unit.
- Where the main tenant carries out internal partition works for the purpose of subletting and doing so compromises the nature of the property as a single self-sufficient residential unit with essential features such as a living/dining area and a kitchen). This means that the occupants of the residential unit are able to live, dine and perform other essential activities for daily living (e.g. cooking) within the same unit. A unit would not constitute a single self-sufficient residential unit if internal partitioning works are carried out which compromises this self-sufficient nature. For example, converting the unit’s kitchen into two small bedrooms for the purposes of subletting, which would mean that the unit no longer has a kitchen.
Subletting of HDB property
The subletting of HDB flats is strictly prohibited in Singapore.
Subletting of private residential property
The use of private residential properties is regulated and overseen by the Urban Redevelopment Authority (URA). The URA is Singapore’s government authority in charge of the city’s land planning.
With regard to the subletting of private properties, the URA has issued guidelines which landlords and owners of private properties should take note of when renting out their homes. In general, it is illegal for tenants to sublet their property for short-term accommodation (i.e. less than 3 months), such as renting them out to tourists on platforms like Airbnb for a few days.
In a recent case, a former property agent who illegally sublet 14 private residential properties through Airbnb and HomeAway was fined a record S$1,158,000. The former property agent had entered into tenancy agreements with the landlords of the various properties in the name of multiple companies, and then sublet the units to foreign tourists and local residents.
Do note that additional guidelines, on top of those issued by the URA, may apply to owners of private properties such as condominiums. Such regulations and guidelines are typically issued by the respective Management Corporations of these condominiums and enforced independent of the URA. You may wish to check with your Management Corporation on these guidelines.
What are the Penalties For Illegal Subletting?
If your tenant illegally sublets an HDB flat to unauthorised subtenants, you, as the landlord, may face financial penalties. The tenants who had illegally sublet the flat may also be barred from renting another HDB flat for a certain period of time.
If it is found that a property has been illegally sublet, the URA will take action against the parties involved. These persons may include the main tenants who engaged in the subletting, as well as the landlords who might have failed to exercise appropriate due diligence to prevent their tenants from illegally subletting their properties.
In the case of first-time offenders, the URA may issue a fine of up to $5,000. Repeat offenders, as well as those who engage in large-scale illegal subletting, may face more severe penalties. These include fines of up to $200,000 and/or up to 12 months in jail.
Additionally, other parties who have facilitated the illegal subletting of properties can also be penalised. For instance, real estate agents who introduce a subtenant to the main tenant of the property, with the knowledge that the main tenant has not received any permission from the property owner, may risk having their registration suspended or even barred from holding a real estate agent’s licence.
Although it is not illegal for a guest to stay in an illegally sublet property, if the host is caught for illegal subletting, guests may have their bookings cancelled. Additionally, guests who wish to stay in private residential properties such as condominiums may potentially be denied entry into the building by the condominium management.
If You are a Landlord/Homeowner Looking to Rent Out Your Property, What Can You Do to Prevent Illegal Subletting?
There are a number of measures that you can take prior to renting out your home to a prospective tenant. These include:
Conducting due diligence
You may wish to conduct appropriate due diligence in respect of your main tenant prior to renting out your property. In particular, you may consider interviewing potential tenants and once you are ready to enter into a tenancy arrangement with them, you should ensure that you explain the terms of the tenancy agreement. This can help to establish a clear, mutual understanding as to the use of your property throughout the tenancy period. Doing so can minimise any potential confusion as to what the main tenant is permitted to do with regard to subletting the premises.
Getting a well-drafted tenancy agreement
You may also consider engaging a lawyer if you are in the initial stages of renting out your property. A lawyer well-versed in Singapore’s housing laws will be able to assist you with drafting a comprehensive tenancy agreement that includes important clauses with clear stipulations prohibiting illegal subletting.
Ultimately, as a landlord, you bear the responsibility of implementing appropriate measures to ensure that your property is not being misused through illegal subletting.
If Your Tenant(s) Sublets a Unit Without Your Permission, What Can You Do?
Immediate steps to take
If you suspect that your tenants are illegally subletting your property without your permission, you should first investigate the situation thoroughly. If the investigation reveals that illegal subletting has occurred, you should gather evidence to prove this, such as:
- Copies of the tenancy agreement with clauses that clearly prohibit your tenant from subletting the property
- Evidence revealing the illegal subletting activities of your property, such as:
- Photographs or footage indicating the date and/or time of multiple different guests (other than your main tenant) entering and leaving the premises with luggage
- Photographs or footage of cleaning or housekeeping personnel visiting your property before or at the end of each suspected stay
- Screenshots of your property’s listing on home-sharing platforms like Airbnb
Once you have the relevant evidence, you should inform the main tenant of your property that they have sublet the premises in violation of your agreement and/or the law. When communicating this information to your tenant, you should try to ensure that any correspondence is documented in writing (e.g., through emails or letters). This ensures that you are able to retrieve evidence of such communication if legal action needs to be taken.
Thereafter, you may decide on the steps to take to address the violation. For example, you may wish to immediately evict the tenant and/or subtenants.
You may also consider other methods of resolving the matter. For example, mediation can help resolve misunderstandings or disputes by providing a neutral and objective platform for parties to work on their issues. You may refer to this article for an overview of mediation in Singapore.
Other measures to take
To better understand your legal rights as a landlord, especially in the event of a landlord-tenant dispute, you can refer to our article on the legal rights between a tenant and their landlord.
Illegal subletting is an offence punishable by law. Owners and/or landlords of property bear the responsibility of taking appropriate measures to ensure that their tenants are not engaging in illegal subletting.
Given the potentially contentious nature of property disputes and the involvement of multiple parties including yourself (the landlord), your main tenants and their subtenant(s), it is recommended that you consult a lawyer specialising in landlord and tenant matters in Singapore for further advice. A lawyer may also be able to discuss the possible legal measures that you can take should a tenant-landlord dispute arise. For example, such disputes may arise when your tenant disputes the terms of the tenancy agreement or any measures you may have taken in respect of their subletting violation, such as an eviction.
Alternatively, if you have been charged with illegal subletting, you may wish to engage a criminal lawyer in Singapore to assess your case and provide further advice on your matter.
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