SINGAPORE - Private residential properties may be rented out to no more than six unrelated persons from Monday (May 15), according to a letter sent out to real estate agencies by the Urban Redevelopment Authority (URA) on Thursday (May 11).

The current cap is eight unrelated persons.

Existing tenancy agreements with seven or eight tenants will be allowed to run their course until May 15, 2019.

The new occupancy cap will apply after that regardless of whether the tenancy agreement expires after the implementation date, the letter stated.

The letter added that landlords must comply to the new rules or may be subjected to investigations.

The changes were passed in Parliament as part of the Planning (Amendment) Bill in February.

Previous reports have said apartments that are rented to more than six unrelated tenants will be treated as dormitories and would require URA's approval.

This new rule is likely to significantly affect small and medium enterprises that rent out entire apartments for their S pass or work permit holders, said International Property Advisor chief executive Ku Swee Yong.

Some businesses, especially restaurants or those who need shift workers, lease condo apartments near the workplace for their staff.

Said Mr Ku: "To rent another apartment to house their eight workers, instead of renting an old terrace house, they will now have to rent two apartments. The cost is increased."

The new rule will also affect home-sharing in future, such as AirBnb. While illegal now, URA is studying the option of creating a new category of private homes that will allow short-term rentals.

An occupancy cap of six means future home-sharing hosts will not be able to lease out an apartment to, say, two large families, said Mr Ku.

For Housing Board flats, the maximum number of subtenants allowed for a three-room unit and a four-room or bigger unit is six and nine respectively.