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Some condos being run as serviced apartments
AT least two projects nestled in a mature residential precinct in District 9 near Somerset are being run as serviced apartments - despite not having the regulatory approval to do so - and a third one is opening.
Oxley Thanksgiving Residence, a freehold condominium at 328 River Valley Road owned by Chinese temple Poh Ern Shih, and St Thomas Lodge, which also sits on freehold land at 32 St Thomas Walk, are listed for short-term stay on the website of accommodation service provider Atas Residence.
The Business Times' visit to these projects confirmed that they are being run as serviced apartments.
A third property, Devonshire Apartments at 17 Devonshire Road, has just undergone a major renovation, and the units there are understood to be starting a new chapter as serviced apartments this month.
BT's query to the Urban Redevelopment Authority (URA) confirmed that these three properties are currently approved for residential use, but "do not have planning permission to be run as serviced apartments".
A URA spokeswoman said developers who wish to convert residential developments into serviced apartments have to obtain planning permission from the URA and comply with its guidelines on serviced apartments.
St Thomas Lodge is held by St Thomas Investment Pte Ltd, and Devonshire Apartments, by Devonshire Properties Development Pte Ltd. Checks on these private companies traced their ultimate shareholders to Ng Bok Eng Holdings, the family company of the late business mogul and philanthropist Ng Bok Eng and his family members.
The late Mr Ng, dubbed the "King of Cloves" for his import-export business under Bian Bee Company, started Ng Bok Eng Holdings in 1969 to specialise in property and securities.
Oxley Thanksgiving Residence, a single-strata development, is master-leased to The Pent Pte Ltd. The latter in turn sublets the units to tenants through Atas Residence. The Pent's major shareholder is Hoy San Holdings, the main business of which is in stevedoring, terminal operations, transportation and warehousing.
Chinese temple Poh Ern Shih is said to have obtained the land in 1953 as a donation from temple founder Lee Choon Seng, who was acting chairman of OCBC during the Japanese occupation and later chairman during the 1960s.
Some market watchers said the running of an entire residential development as serviced apartments was a grey area, in view of URA's guideline on minimum six-month stay in private residential properties to safeguard the living environment, safety and privacy of residents in the development.
A development which is run like a hotel or serviced residence has no Management Corporation Strata Title (MCST) by-law, as the owner or the master lessee is the defacto managing body, and there are no long-term "residents" to take into consideration, said Century 21 Singapore chief executive Ku Swee Yong.
He expressed sympathy for the home-owners in other residential developments in the vicinity, who, aside from concerns over safety and security, may have to deal with deteriorating property values from being near a development with transient tenants.
He said: "During weak markets, when vacancies are high - especially coupled with low seasons for tourist arrivals - rental values will fall significantly. This will attract a different class of short-term tenants to the condominium.
"Investors who are in the market for short-term gains are also less likely to uphold high standards in the maintenance of the units. These factors are likely to depress property values within and around the condominium block in question."
Toh Kok Seng, senior partner at law firm Lee & Lee, said developments that do not have approval from URA to be run as serviced apartments are breaching The Planning Act if they do so.
Currently, the Building Maintenance and Strata Management Act, the legislation governing strata title properties in Singapore, does not have specific by-laws against short-term leases. The MCSTs of some condominiums, however, have passed specific by-laws to prohibit short-term stays.
Even in the case when a master tenancy is issued, property owners are still liable for breaches of law in the sub-tenancies if they are aware of the breach, but turn a blind eye to it, Mr Toh said.