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The salesperson may not hold a cash deposit for the rental (i is false)

A worked RES examination question on hdb flat and room rental, from our Paper 2 bank — with the rule it turns on, and why each of the four options is right or wrong.

Paper 2Lesson 5HDB flat and room rentalFree — no sign-up

The question

An HDB owner who will keep living in his flat wants to sublet a single bedroom, and asks his agent three practical things: whether the agent can take the tenant's cash deposit, what he must do if the tenant later changes, and whether he needs to go through any anti-money-laundering checks for so small a letting. He has heard conflicting things about whether so small a letting needs the same anti-money-laundering checks as a full sale would.

Consider the following statements.

  1. (i) The salesperson may hold the cash deposit for the room rental on the owner's behalf.
  2. (ii) Only bedrooms originally built by HDB may be sublet; converted or common spaces may not.
  3. (iii) The owner should inform HDB of later changes to the tenant's particulars.
  4. (iv) Customer due diligence is not required for an HDB room rental.
  1. A. (ii) and (iii) only
  2. B. (i), (ii), (iii) and (iv)
  3. C. (iii) and (iv) only
  4. D. (ii), (iii) and (iv) only

The answer, and why

Answer: D

The rule. Only HDB-original bedrooms may be sublet (ii), the owner should notify HDB of later tenant changes (iii), and customer due diligence is not required for an HDB room rental (iv). The salesperson may not hold a cash deposit for the rental (i is false).

Why D is correct. (ii), (iii) and (iv) are right; (i) is false.

The other options.

  • A drops (iv), the CDD exemption.
  • C drops (ii), the original-bedroom limit.
  • B adds the false (i), the agent holding the cash deposit.

Exam note. Original bedrooms; notify HDB of changes; no CDD for the room rental; and no cash deposit in the agent's hands.

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