April 3, 2009
Tips For first-time Singapore Tenants
Case Studies by asiahomes.com
Dr Sing Kong Yuen, Founder, Asia USA Realty (Singapore) asiahomes.com Pte Ltd
asiahomes.com

THE ILLEGAL SUBLETTING OF AN HDB APARTMENT

The Landlord alleged that the Tenant had breached the tenancy agreement by illegal sub-letting. The Tenant's expatriate friends and acquaintances told her that she had done nothing wrong as the HDB (Housing and Development Board) regulations permit 6 Occupants for a 3-bedroom apartment. Therefore, they encouraged her to hold her ground. Such well meaning people who are ignorant of the  laws of real estate agreements cause more harm than good to the first-time foreigner tenant whose culture of unapproved sub-letting might be a common practice in the home country.

The Tenant's Agent was Juliet working under my real estate agency. Juliet could not resolve the Tenant's problems during discussions with the Landlord's Agent who then phoned me to demand, on behalf of the Landlord, that the Tenant evict the Sub-Tenants in 3 days' time.

But the Tenant would not acquiesce to the Landlord's demand. The Landlord then wanted a meeting with the Tenant to talk. However, the Tenant was not proficient in English and would be at a disadvantage on how to negotiate with a Landlord who steadfastedly insisted, via his agent, that the Sub-Tenants be shown the door in 3 days' time.

How should the Tenant's Agent (Juliet) handle this situation? The following is what happened:

1. One housing agent to handle the problem.
I had told Juliet that there should be one agent from our realty firm handling this problem. The Tenant was highly upset and two agents giving conflicting advices would lead to misunderstandings and ill will towards the agents. Juliet could communicate with the Tenant in her non-English language and naturally, the Tenant was much more comfortable talking to her and asking for help. She had just arrived in Singapore with her son who was studying in a Singapore school.

Now, Juliet could not resolve the Tenant's problems with the Landlord. The Landlord's Agent managed to get the names of the Sub-Tenants from the Tenant's son on one of the visits to the apartment. "I will submit the names of the two Sub-Tenants to the Landlord who will then get approval from the Housing Board Development (HDB). The HDB regulates rentals of the HDB apartments in Singapore and every Occupant's name and passport number must be submitted to the HDB. 

In retrospect, the Landlord's Agent did an excellent job. She had cleverly collected the evidence of subletting from the Tenant via her son who was more proficient in English than his mother. I had spoken to the 13-year-old boy previously and he could communicate with me in English well. However, his mother would communicate with me via interpretation from Juliet.    

2. The need to find out how to resolve the Tenant's problems.
"Look here, Juliet," I was getting impatient with several of Juliet's phone-calls to me regarding the intractable complaints of the Tenant.  "If you insist on putting your fingers into the pie, be my guest. Go ahead and deal with the Tenant's problems yourself. Too much emotions and conflicting advices from two rental agents from the same company would not be useful to the Tenant. The Landlord's Agent also phoned me to arrange for the Landlord to meet the Tenant urgently. Please do not involve me if you want to be kind and helpful to your country-woman."

I explained to the novice housing agent, "Housing Agents don't get paid for doing this after-sales service unlike in some countries like Australia. Time is what realtors has. He or she gets paid for closing a case and does not earn a fixed salary. If you can't find a solution to the Tenant's problems, tell the Tenant to contact me directly."

Juliet ceased from handling the case. I reviewed the situation and the following was what I did:

3.  What does the Landlord want? The Landlord wants the Tenant to adhere to the Rental Agreement which does not permit subletting. The Tenant had signed the Agreement listing herself and her son as Occupants. Therefore, if the Tenant does not get rid of the illegal Sub-Tenants, the Landlord thinks of throwing her belongings outside the apartment and lock her out, according to the Laws of Real Estate Contracts.

4. What does the Tenant Want? The Tenant felt that she was doing "nothing wrong" in subletting. I phoned her Uncle in her home country as the Uncle was proficient in English. The Uncle offered a solution and I communicated this to the Landlord's Agent. However, the Landlord's response was to get rid of the Sub-Tenants and wanted a "meeting" to talk with the Tenant urgently.

I believed that the meeting was just a formal demand and a warning to the Tenant to get rid of the Sub-Tenants. It would be most upsetting to the Tenant and her son who had just commenced studies in Singapore. She was not proficient in English and the agenda of this meeting was, in my opinion, to warn the Tenant of the dire consequences of her breaching the terms and conditions of the Tenancy Agreement rather than to regularise and approve the illegal Sub-Tenants.

5.  What should the Tenant's Agent do?
5.1  An evening meeting by the Landlord with the Tenant.
The Landlord's Agent refused to let me know the agenda of the Landlord's evening meeting at the Tenant's apartment. I deduced that there would be no negotiations and the outcome of this meeting would only be a distressed and angry Tenant. She had a major surgery just 3 days ago and I had visited her at hospital. Such stress could hamper her recovery and might even cause her to be ill. Therefore I asked the Tenant not to permit another "visit" from the Landlord or the Landlord's Agent since the latter's collection of the evidence of sub-letting. I told the Landlord's Agent that she get the Landlord to contact me directly. No meeting with the Tenant would be permitted or forced upon her by sudden "visits" anymore.  

5.2  A letter in black and white. Before this direct phone call from the Landlord, I had asked the Landlord's Agent to get the Landlord to give me a letter in writing as to what he proposes to do in this breach of tenancy agreement. He would not write the letter. The reason I wanted the Landlord to put his resolution to the problem in writing is that the Tenant does not understand English. Talk is cheap. It is important that the Tenant's Agent does not serve as an interpreter during this proposed meeting as many comments can be mis-construed during interpretation.

5.3 The Landlord contacted the Tenant's Agent directly. A few days later, the Landlord phoned me. He wanted the Tenant to adhere to the Tenancy Agreement by getting rid of the Sub-Tenants.  I replied, "There is a breach of the Tenancy Agreement. Why don't you just give the Tenant what she offered to you. A one month's notice and return of the one month's deposit at the end of one month?" One month was needed for her to find another residence.

"No," the Landlord said. "I don't accept her offer. Is the Tenant going to compensate me for the shortfall in the rental revenue for the remaining term of the lease if I let her go?" The worldwide economic recession has gripped Singapore more tightly in 2009 than in 2008. It was unlikely that the Landlord would  get a replacement Tenant who will pay him the S$3,000 monthly rental as so many units are vacant due to the exodus and retrenchment of expatriates in Singapore. The Landlord told me that he had engaged a lawyer to act and protect his interests.

"I do not wish to distress the child by evicting the mother and child from the apartment," the Landlord said over the phone. "However, I do not wish to be jailed for harboring illegal Occupants." In Singapore, there is a law that jails any owner who is caught renting out to illegals who have over-stayed or have no valid residence permits from the Singapore Government. One poor pastor who rented out his HDB apartment to foreigners had been caught and jailed a few months for this offence some time ago. There seemed to be no mercy. 

I referred to the Tenant's proposal submitted via the Landlord's Agent by me, "Your agent had given you the names of the Sub-Tenants. Can you approve them as the HDB permits 2 tenants per room? Six occupants are within HDB's rules and regulations for 3-bedroom apartments."

5.4 No room for negotiation.  "No illegal sub-letting will be permitted," the Landlord spoke to me over the phone. "The apartment was rented due to the fact that the Occupants will be the mother and child. Otherwise, I could have leased it to other parties who had proposed more than 2 Occupants." But could he have got such a high offer of rental? I did not provoke him informing him of this high rental. 

The Landlord had preferred this Tenant over the others due to the fact that there would be only 2 Occupants.  I had emphasized the "no subletting" condition in the Tenancy Agreement to the Tenant during the signing with Juliet and the Landlord's Agent. The Tenant had apparently nodded her head in agreement prior to signing. She liked the apartment and had paid a premium high rental unheard of in HDB apartments.

5.5 The Landlord's point of view. I understand the Landlord's concerns - too many Occupants lead to greater wear and tear of the residence. Yet he would not permit premature termination of the lease as it was not to his interest. 

6.  So where do I proceed from this impasse? "I am not siding with the Tenant," I spoke to the Landlord over the phone. "There is a breach of tenancy agreement. The Tenant's uncle who is proficient in English will be coming to Singapore in 4 days' time."

"I cannot wait that long," the Landlord said over the phone. "I want to meet the Tenant this evening."

The problem is that the Tenant can't understand English very well. Her child who had just come to Singapore to study could speak English but not proficiently. Now, I feel that it is not morally right for the child to be an English language interpreter for the mother during the demanded meeting with the Landlord. There would be misunderstandings and threats. I anticipated that there would no resolutions to the Tenant's problems. I was also worried that the mind of the child cannot match an adult mind of the Landlord in the ways of the world. It is just unfair and distressing to a young man if he failed to resolve this problem for his mother so that she can live with peace of mind. She just had a major surgery and if she fell ill and needed to be hospitalised, that would be much more distressing to the child. And who would be the one to be cursed? The Tenant's Agent who advised the meeting. That would be me. 

From this telephone conversation, what the Landlord Lee wanted was to get rid of the Sub-Tenants or get compensated for loss of rental income for the remaining term of the lease when the tenancy is prematurely terminated.

7.  Back to the present, how should I resolve this problem? I don't speak the foreign language. I don't want the Tenant's child or the Tenant's Agent (Juliet) to be involved in interpretation during the meeting with the Landlord. They would not be able to do it satisfactorily and would not be able to negotiate or counter any threats from the Landlord. A lot of time will be wasted. The Tenant would be very angry with Juliet for mis-communications. The Landlord seemed fixated in getting his ounce of flesh due to the breach of tenancy agreement. It was a meeting not to the interest of the Tenant. 

8.  How to resolve this problem? Is there a solution? There was one solution actually. There was the uncle who was proficient in English and coming to Singapore in 4 days' time.  I asked the Landlord for his telephone number. I phoned the uncle in his country. I ensured that he phoned the Landlord by following up with a call. The uncle did phone the Landlord. The Landlord had no option but to accept my offer.

Well, the problem is resolved as far as I am concerned. I know that the subtenants were not illegals. 4 days would not be too long. The uncle was capable and able to negotiate with the Landlord unlike the Tenant and her child. The meeting 4 days later would be the right thing to do. 

There is a limit to what housing agents can do after the signing of the Rental Agreement. The law of real estate contract binds both the Tenant and the Landlord when the terms and conditions of the lease are breached.

9. Adverse Publicity for the Tenant's Agent.  "Housing agents are useless" Juliet said to me regarding this episode when I spoke to her after taking over the case. There was great interest from the friends and acquaintances of the Tenant to know which agency was handling her case.

When there are problems, the housing agents are black-mouthed by the expatriate Tenant's community of acquaintances, as in this case.  Housing agents cannot resolve the Tenant's and Landlord's problems if both parties could not negotiate to get a win-win situation after a breach of the law of real estate. In this case, housing agents had spent a lot of time trying to get both parties to negotiate and earn nothing for their time spent in being helpful.

10. Tenants to Be Aware of the Terms and Conditions Of The Tenancy Agreement. Some Singapore Landlords do not mind sub-letting but this need to be negotiated early prior to the signing of the Tenancy Agreement. The number of Occupants is of great importance to some Landlords as more residents wear and tear the apartment faster. 

Once there is sub-letting breaching the Tenancy Agreement, the Landlord can evict the Tenant, forfeit the rental deposit and claim for the short-fall in the loss of rental income for the duration of the lease after eviction or premature termination of the lease. Obviously, if the Landlord gets a higher rent after getting rid of the incumbent Tenant, the ex-Tenant gets nothing from him or her. The only beneficiary in a breach of the Tenancy Agreement is the lawyer in the final analysis as both parties need to pay as much as a thousand dollars or more for services rendered.

11. Conclusion. What was the outcome of this case? The uncle came to Singapore, phoned me for the Landlord's telephone number. He met the Landlord himself. Apparently the uncle resolved the problem but I did not probe further as to what he said to the Landlord. When I visited the Tenant and the uncle the day after the resolution of the problem, she was cooking. She looked quite happy and well. She spoke to softly in faltering English as I left the apartment after a purely business discussion with her uncle, "Thank you for the roses."

Roses for my fair lady? No, she was not my fair lady. Yes, I had sent her the red flowers to wish her well after a major surgery. We could not communicate in English when I visited her at the hospital in the evening, just after her surgery. The hospital florist had only three types of flowers. Only the bouquet of 12 roses was presentable. So I bought them and the florist delivered to her ward. She had recovered well from her surgery based on her cheerfulness and appearance. It was good that I had thought of the uncle to resolve her problem. This uncle was a no-nonsense man of the world and I had instinctively known he was the right man to help the mother and child negotiate with the Landlord who had his lawyer on stand-by. Eviction and litigation would be the outcome if this situation was badly mis-handled. 


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Tips For first-time Singapore Tenants
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