URA revises occupancy cap

New occupancy laws kicked in on 15 May 2017. Here is what you need to know about the revised regulation on the maximum number of unrelated tenants that a private home can be rented out to.

Occupancy rules, then and now

Prior to this new ruling, landlords could have up to 8 unrelated tenants. With effect from 15 May 2017, landlords can rent out their private homes to no more than 6 unrelated persons. If there are 6 (or more) related persons living in the property, no tenants are allowed.

This change applies only to private residential properties. For HDB properties, up to 6 and 9 sub-tenants are allowed for a 3-room unit and a 4-room (or larger) unit respectively.

How will this affect landlords?

Existing tenancy agreements that accommodate more than 6 tenants will be allowed run their course until 15 May 2019. The occupancy cap of 6 unrelated persons will apply after, regardless of the contracted end-date in the tenancy.

For HDB flats, the maximum subtenants allowed for a 3-room unit and a 4-room or bigger unit remains unchanged at 6 and 9, respectively.

Why the change in rules?

Responding to media queries, an Urban Redevelopment Authority (URA) spokesman explained 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 the new regulation also takes into account the availability of accommodation options for those not living with their families. These alternatives include student hostels and dormitories for company employees.

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

One property watcher 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.”

Why is there a difference in the occupancy cap for private and HDB properties?

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

One analyst said: “A better implementation could have been to peg occupancy caps to the number of bedrooms, similar to that for HDB flats.”

URA explained that private residential units vary in sizes, from small apartments to larger landed properties. It has thus simplified the control for greater clarity to the public by not adopting a stratified occupancy cap control based on unit sizes.

P.S Following URA’s footsteps, HDB has revised the occupancy cap for renting out HDB flats and commercial property living quarters to 6 persons. This new HDB occupancy cap took effect from 1 May 2018. Read: HDB Revises Occupancy Cap for Renting Out HDB Flats.