SINGAPORE — Two Airbnb hosts who became the first to be hauled to court since laws were passed to address short-term rentals were fined a total of S$60,000 each on Tuesday (April 3).

Terence Tan En Wei, 35, and Yao Songliang, 34, faced four charges for listing four apartments at the D’Leedon condominium on Farrer Road, which they let out regularly on short-term leases over five weeks — ranging from a few days to weeks — from May 15 last year.

The Singaporeans, who are former property agents with Savills Residential, were fined S$15,000 per charge. In default of the fine, they will each have to serve 12 weeks’ jail.

They could have been fined up to S$200,000 per offence under the Planning Act, which forbids the rental of apartments and rooms for a short term unless permitted by the Urban Redevelopment Authority (URA).

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Private residential properties were previously subjected to a minimum stay of six consecutive months, which was reduced to three months in June last year. 

The prosecution had sought fines of S$20,000 per charge, or a total of S$80,000 each for Tan and Yao. The defence had asked for S$5,000 fine per charge, or S$20,000 for each of the accused.

In sentencing them on Tuesday, District Judge Kenneth Choo ruled that a S$20,000 fine is “hardly trifling”, but said a S$80,000 would be “excessive” as the profits of the duo only came up to about S$19,000 over five weeks. 

“(A S$60,000 fine) would serve as a strong signal to deter other like-minded individuals from actively pursuing such illegal business enterprises in order to make a quick profit,” Judge Choo said.

He added that this case is “not a typical case” where a unit owner took the opportunity to rent out his or her home for a short time while going on holiday. The duo who were registered real estate agents were running a profit-driven enterprise, despite understanding that it was not allowed, he pointed out.

DUO RENTED UNITS, SUBLETTED THEM WITHOUT LANDLORDS’ CONSENT

Court documents revealed that Tan and Yao do not own the four units, which are located in three blocks at D’Leedon. 

The duo worked together to lease the units from various landlords under the guise that they would be using the premises for personal use, when they had intended to use them to run a business providing short-term accommodation.

The tenancy agreements — three signed by Tan and one by Yao — stated that the tenant is not to sublet the premises without written consent of the landlords. 

But the men advertised the apartments for between S$198 and S$335 per night on several host accounts on Homeaway and Airbnb. On Airbnb, their host accounts, which were registered in February and December 2014 respectively, were known as “Kelvin” and “Cissy”. The latter was supposedly a female host.

To avoid raising any suspicions, Tan and Yao would give specific instructions on how their guests can check-in, based on their mode of transport. 

If the guests had arranged their own transport, they would instruct the guests to inform the security guard that they were “visiting friends”. If the guests took public transport, they would pick them up from the nearby Farrer Road MRT station. On occasion, the guests would be brought into the condo through a side gate near King’s Road.

Once, to evade the security guards, Yao took the guests to a different unit to throw the security guards off.

The matter came to light on June 9 last year, when the URA launched an investigation into complaints from residents and the managing agent of the D’Leedon condominium received between November 2016 and early 2017.

In a late night raid, four URA officers inspected four units, and found that they were occupied by Airbnb guests. 

One unit housed six guests, who paid the equivalent of about S$1,040 in in Philippine peso for five nights. A second unit was occupied by two guests who paid about S$4,400 worth in British pounds for 23 nights. 

Four guests, who paid in Australian dollars worth S$3,300 for 10 nights, were found in a third unit. The final unit was for a guest who needed the space for about two weeks.

SHORT-TERM STAYS STILL BEING REVIEWED

Private and public homes rented for short-term stays through online platforms such as Airbnb have drawn objections from some homeowners, who say there are safety concerns and that it is a public nuisance.

The URA, which has been reviewing the rules on such leases, received close to 260 complaints about short-term home rentals in the first half of last year.

From 2015 to 2016, there was a 60 per cent increase in such complaints.

In February last year, Parliament debated and later passed the Planning (Amendment) Bill, making it illegal for homeowners to lease their entire apartments or rooms for less than six months. 

They may do so only with URA’s approval.
At the time, National Development Minister Lawrence Wong said that the authorities were mulling an option to create a new category of private homes where short-term rentals are permitted.

Airbnb said in an earlier statement in December 2017 on the arrests that it is “strongly committed” to collaborate with the authorities to find ways to allow home-sharing to thrive here.

It said that the present framework for home-sharing here does not reflect how Singaporeans travel or use their homes today, and also “stands in contrast with Singapore’s commitment to innovation”.

The company said that in 2016, Airbnb drove S$324 million of economic activity in Singapore, and is “continually helping local neighbourhoods benefit from tourist spending that has historically been limited to traditional tourist areas”.

It added that the average Airbnb host earns S$4,700 a year as a form of extra income in Singapore.

“We have collaborated with authorities around the world, developing clear and sensible frameworks that allow home sharing to thrive, while addressing each city’s unique challenges and concerns. We remain strongly committed to doing the same here in Singapore, working alongside the Government to find a way forward for home sharing, both to Singapore’s immediate and long-term benefit,” its spokesperson said.