When it comes to renting an HDB flat, it’s not as simple as handing your money to someone who has a room or property available and asking them to become your new landlord.

HDB flats are public housing that exists primarily to provide affordable housing for Singaporeans. As such, the rules for profiteering – such as renting out HDB flats – are somewhat stricter than for private property. Not every HDB flat can be rented out to tenants, and not every potential tenant can rent an HDB flat.

Who is eligible to rent HDB apartments?

It is important that you check your eligibility as a tenant before renting an HDB flat. HDB guidelines state that you can only be a tenant of an HDB flat if you:

• A citizen of Singapore (SC)

• A permanent resident of Singapore (SPR)

• A non-citizen residing legally in Singapore and holding a work pass, S-Pass, work permit, student pass, dependant pass or long-term visitor pass. All passes must be valid for at least six months.

In addition, there are further restrictions for work permit holders. Those in the construction, shipping and manufacturing sectors are not allowed to rent HDB properties, while those in the manufacturing sector are allowed to rent rooms but not entire apartments. Malaysian work permit holders are exempt from this rule and are allowed to rent both rooms and entire apartments, regardless of which sector they work in.

The rules become even more complicated if you already own a property. Owners are not allowed to rent HDB properties unless:

Then there is the clause relating to existing tenants of the HDB public rental scheme. The scheme provides HDB public rental flats to low-income households who cannot afford to buy, as well as those who have bought a HDB BTO flat but are still waiting for their new home to be completed.

If you are a tenant of a public HDB rental flat, you are not allowed to become a tenant of another HDB property unless you are divorced or legally separated. Even then, only one party is allowed to rent. This means that you are only allowed to rent another property if your former spouse has not already done so.

Choose your HDB apartment rental

Once you’ve determined your eligibility, it’s time for the fun part: finding your dream home. The only dampener during this phase? The budget. Ideally, rent shouldn’t be more than 30% of your monthly salary.

The story continues

It is a widely held belief that buying is always better financially than renting. But this is not always true, especially if you are only considering short-term occupancy of a property and would not even stay in it long enough to pay off the mortgage. Renting does have advantages. For one, the flexibility is a great incentive for those who may be sent abroad for work.

Unless you’re earning millions, you’ll probably have to make compromises to stick to your budget. Decide what you absolutely must have and what you can’t live without. Do you need to live within walking distance of your office in the CBD, or does a daily train ride of a few stops to Kallang subway station sound doable? It’s certainly nice to live near a park, but how often would you actually go jogging or even set foot in one?

Thankfully, the internet has made it easy for us to search for property these days. There are countless websites with available properties, including PropertyGuru’s own listings page. Arm yourself with a list of your criteria (and acceptable compromises), and you should have no problem finding a rental property that suits you.

Authorization of HDB apartment landlords

After weeks of searching and viewing properties, you have finally found your dream home. Unfortunately, you cannot move in straight away; you first have to deal with the legal jargon.

As mentioned at the beginning of this article, HDB flats are public housing and have strict rules in place. Just as there are eligibility requirements for tenants, there are also eligibility requirements for landlords. Before you sign the lease for a flat, always check if it is available for renting. One of the easiest ways to do this is to ask the flat owner for a copy of the approval letter they should have received from HDB.

Letter of intent and down payment

Once you’ve determined that the property is legal, you can, if you want, secure it with a Letter of Intent (LOI) and a security deposit. Simply put, the LOI is a written version of everything that was agreed upon verbally, plus a draft of the future lease agreement.

The security deposit is a down payment that shows you are serious about renting the property. It is also known as a booking deposit. It is paid to demonstrate the seriousness of the LOI. It is usually one month’s rent for a 12-month lease and two months’ rent for a 24-month lease. If the lease is signed, this deposit becomes either the security deposit or the first month’s rent up front.

Both the letter of intent and the deposit are optional and not legally binding. They simply serve as a sort of official “reservation” while negotiations continue. It’s the property market’s version of “going steady” – the HDB flat owner should now stop looking for potential tenants and focus on negotiating a deal exclusively with you.

As a precaution, always transfer the deposit in a traceable manner and not in cash. It is also a good idea to have the conditions under which you will get the deposit back in black and white. Usually, the landlord should agree to return the money if they are the one breaking the contract at that point.

Rental agreement

After the LOI and security deposit have changed hands, the landlord should send you the Tenancy Agreement (TA) within the agreed time frame. Make sure the TA does not contain any grey areas that could become points of contention in the event of a dispute.

Know what your rent covers and, more importantly, what it doesn’t – hidden costs are a nasty surprise. Will the landlord cover all repair costs or are you responsible for maintaining some parts of the property? Before you move in, pay attention to the general condition of the HDB rental flat – any signs of wear and tear on the furniture, chipped paint and cracks in the tiles. Document any defects with photos if necessary so that you cannot be accused of causing damage to the property during your stay.

When signing the rental agreement, the deposit must also be paid, which is usually one month’s rent for a rental period of 12 months and two months’ rent for a rental period of 24 months.

Stamp duty

With the lease signed, you are just one step away from becoming a legal tenant of your new home: paying the stamp duty. The easiest way to do this is to electronically stamp your lease on the Inland Revenue Authority of Singapore (IRAS) website and make the payment at the same time. For leases of less than four years, stamp duty can be calculated by multiplying the monthly rent and the length of the lease in months by 0.4.

Remember that the tenancy agreement is not valid until the stamp duty is paid, so if you don’t pay the fee, you are simply an illegal squatter in someone else’s home. There are also penalties for late payment.

It is definitely a lengthy process, but once all the paperwork is completed and the stamp duty is properly paid, you can move in, have a housewarming party and settle into your new home!

Watch our video on renting a HDB flat

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