The Urban Redevelopment Authority (URA) has reduced its cap on allowable tenants for private properties from eight to six unrelated persons, reported The Straits Times.
In a letter sent out to real estate agencies, the URA noted that while the new rule will take effect from Monday (15 May), it will still allow existing tenancy agreements with seven or eight tenants to run its course until 15 May 2019.
After the said period, the new rule will apply regardless of the expiration date of the tenancy agreement.
Landlords who fail to comply with the new rule will be subjected to investigations, added URA.
Passed in Parliament as part of the Planning (Amendment) Bill, the new rule is expected to hit small and medium enterprises renting out apartments for their work permit or S pass holders, said Ku Swee Yong, Chief Executive of International Property Advisor.
This is especially true for some businesses, such as restaurants or those with shift workers.
“To rent another apartment to house their eight workers, instead of renting an old terrace house, they will now have to rent two apartments. The cost is increased.”
The new cap will also affect home-sharing, such as AirBnb. Although it is currently illegal, URA is looking at creating a new category of private homes, in which short-term rentals will be allowed.
With the cap, a future home sharing hosts can only lease out his home to two large families, said Ku.
Meanwhile, owners of three-room and four-room or bigger Housing Board flats are allowed a maximum of six and nine subtenants, respectively.