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URA, estate agency body probing potential breach of minimum-stay rule
WHILE the jury is still out on a review by the Urban Redevelopment Authority (URA) of the minimum rental period for private residential properties, cases of potential breaches are being looked into.
The URA and the Council for Estate Agencies (CEA) said they are probing cases cited in recent articles published in The Business Times on potential short-term stays being offered in private residential units.
BT articles published on April 9 flagged that long before home sharing websites such as Airbnb and HomeAway became popular, many accommodation service providers have been operating for a long time, offering short-term stays of under six months in private homes.
Under URA's guideline, however, renting out the whole unit or individual rooms for residential purposes is allowed only for long-term stays of six months or more. Short-term stays here are allowed for serviced apartments, which are under residential zoning, and hotels with its own designated land use zoning.
"CEA and URA have been investigating the cases cited by The Business Times," said CEA acting deputy director (licensing) Chua Geck Siang in response to a BT query.
BT had flagged earlier this month that some accommodation service providers could have got around URA's minimum-stay requirement for residential properties by clever wording of their tenancy agreements.
Standard contracts seen by BT, such as those issued by Uncharted Homes on behalf of BS Shenton Pte Ltd, contain a minimum lease of six months but with a diplomatic clause allowing for early termination without penalty. Another accommodation service provider, LMB Housing Services, issues an open-ended contract that states a minimum lease of six months without indicating the last date of stay, and allows the tenant to terminate the lease without penalty by submitting a termination letter 30 days before departure date.
But URA has clarified that there is a breach as long as residential units are rented out for under six months.
Other accommodation service providers cited in the BT articles include International Service Apartments and Atas Residence, formerly known as OSPC (Overseas Students Placement Centre) Pte Ltd. Besides these, there are many other service providers that offer rental for less than six months in private residential units.
Since estate agency work includes introducing property owner or landlord to a tenant, assisting in the negotiation of a transaction between both parties, as well as subsequent work relating to the transaction, the operations of these managing agents raise the question of why they are not licensed by or regulated under the CEA since they provide some form of property leasing services.
In response to BT's query, the CEA said that under the Estate Agents Act, entities and individuals conducting estate agency work in Singapore must be licensed and registered with the CEA.
But entities managing serviced apartments, which are intended for short-term stays in a way similar to hotels, need not be licensed under the Estate Agents Act, said Ms Chua. "The key issue is that serviced apartments must have the requisite planning approval from URA to be used as such."
Atas Residence was managing short-term stays for entire developments Oxley Thanksgiving Residence, St Thomas Lodge and Devonshire Apartments near Somerset - projects that did not have planning permission to be run as serviced apartments as at April 9, the date when the BT articles were published.
Since then, Atas Residence has moved St Thomas Lodge and Devonshire Apartments - two strata-titled developments - to its long-term stay catalogue but kept Oxley Thanksgiving Residence under the short-term stay category.
BT understands that URA on Wednesday granted written permission for the proposed change of use of Oxley Thanksgiving Residence - a single strata development owned by Chinese temple Poh Ern Shih - to serviced apartments this week. The five-storey block at 328 River Valley Road has a total of 88 units with two levels of basement carparks, swimming pool and a roof terrace.
The Chinese temple had submitted a formal application on April 14 to URA for the conversion of use to serviced apartments.
Under URA's guidelines for serviced apartments, they have to be non-strata subdivided, self-contained apartments with provision for kitchenettes or kitchens and have support services such as concierge, housekeeping and/or laundry provided for the residents. They are rented out for lodging for a minimum of seven days or other longer periods.
Locations where serviced apartment use can be considered for approval are sites fronting major and arterial roads within predominantly residential areas, or sites located in mixed use areas, such as commercial centres and business parks; or abutting medical hubs.