RENTING GUIDES
Following is a brief explanation of the rental procedure.
Once you have found a property that you like to rent,
and both you and the landlord have mutually with all terms,
you can start initial the lease with a "Letter of Intent", and
enter into the contract, "Tenancy Agreement", with owner.
The agent is the one usually assist
in the preparation and collection of the
documents required for the Lease.
Tenant's agent shall prepare Letter of Intent,
Stamp Duties,
with all Identification Documents such as
FIN EP, PP, NRIC etc and
Turn on Power Supply later on.
Landlord's agent shall prepare
Tenancy Agreement and Inventory List,
and collection of all necessary and important
Identification Documents on behalf of the Landlord.
Upon Closing, Tenants pay service fee to Tenants' agent and
Landlords pay Commission to Landlord's Agent respectively.
LETTER OF INTENT
Letter of Intent is an expression of
the potential tenant's interest and intention to rent a premises.
However, if the terms and conditions are simple and clear cut,
it is strongly advised to enter directly with the
signing of Tenancy Agreement
instead of the Letter of Intent
which sometimes causes additional negotiation and
arises with endless discussion
whcih might eventually ended up with unforeseenable changes
that disappoint either party.
This "Letter Of Intent" is a short proposal from tenant to the landlord
to rent the apartment with a summary of the terms and condition,
usually covers deposit, rental, furnitures in details etc.
IT IS NOT A CONTRACT.
Together with the letter of intent,
the tenant presents to the landlord
with a goodfaith consideration
equivalant to one month rent,
a signed Tenancy Agreement if available,
fill up Section A of ANNEX A of HDB Form, for HDB flat, if any,
together with identity documents such as FIN, EP /NRIC / PP etc.
With accepting the good faith deposit and
the signing of the document, Tenancy Agreement,
the landlord expresses that he agrees to the tenant's proposal
and the deal is secured.
Typically the Letter of Intent specifies the following:
Duration:
Usually 24 months
(but may be 1 to 3 years or
other mutually agreed periods),
with optional renewal of another 12 or 24 months
– however not necessarily with same rent.
Generally, landlords are not keen to rent
less than 12 month and
the tenant may have to
pay premium for shorter term lease.
Start Date:
the date when the lease is supposed to start.
Generally, landlords are not keen to start a lease too far in the future.
Often leases do start immediate, or after less than 1 month time.
Monthly rental
Good faith deposit – usually is equivalent to one month rent.
If the landlord signs the Letter of Intent and accepts the deposit,
the landlord undertakes not to lease the apartment to someone else.
When the tenancy agreement is signed,
the good faith deposit constitutes part of the first month rental or security deposit.
Security deposit – The amount of security deposit is
normally stated in the Letter of Intent.
It is payable only with the signing of the Tenancy Agreement.
Typically – it is one month rent for every 12 month of lease.
At the end of the lease, the security deposit is to be refunded without interest.
The landlord however reserves the right to deduct from the deposit all costs,
damages and expenses arising from the tenant
for breaching any of the covenants stated in the Tenancy Agreement.
Furnished
The 'Letter of Intent' may also state that the property is leased furnished or partially furnished.
Air Con Services
Tenant shall service aircon regularly 4 times in a year.
It is good that Tenant signs up and
pays for the Air Con Service Contract ( much cheaper )
upon signing the Tenancy Agreement.
Agent ususally prepare TA with Air Con Service Contract together.
After such arrangement,
this ensure Tenant with no worry to the Air Con
since then Landlord shall take care of the
major breakdown and the rest.
Pets
You should also express in the 'Letter of Intent' if you are planning to have pets in the property.
Standard tenancy agreement states that this is subject to landlord's written approval,
and you may want to agree this beforehand in order to avoid problems later.
Smoking
Some Landlord do not prefer smoking tenant.
It is good to check in advance to avoid dispute later on.
Additional requirements – e.g. Diplomatic Clause, Furnishing etc.
The Diplomatic clause is to safeguard the tenant in the event the tenant is no longer employed.
Typically it states that you can terminate the lease after 12 months by giving 2 months notice.
Such clause usually do not apply on lease less that 24 months.
Expiry of 'Letter of Intent' –
The Letter of Intent has a clause that specifies
a period within the landlord has to sign it,
usually within THREE ( 03) days or it otherwise expires.
In case no agreement can be reached or expiry,
the landlord has to return the good faith deposit
back to the prospective tenant immediately.
However, if it is tenant's decision to back out with no good reason,
goodfaith deposit shall be forefeited by the Landlord.
Agent's Commission
The Letter of Intent also spell out clearly
how do the Landlord and Tenant rewards their agent respectively.
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TENANCY AGREEMENT
The 'Tenancy Agreement' is a
binding contract to lease the property,
signed by both, tenant and landlord with witnesses.
The 'Tenancy Agreement' will take over items
from the 'Letter of Intent',but in more detail.
It is advisable to use the
standard tenancy agreement provided by the
Landlord's agencies as a template.
At this point you will need to furnish to the landlord with
latest ROC Bizfile ( if this is a company lease )
a copy of your passport and
employment pass and/or Identity Card ( NRIC ).
The landlord will perform a background check
on your company (If company lease) including its
paid up capital,
and validity of all relevant passes
and eligibility to stay in Singapore
ICA Immigration and Checkpoint Authority
to confirm your valid entry to Singapore
MOM Ministry of Man Power
to check if your
Employment Pass / S Pass / Work Permit are valid,
Upon Signing the Tenancy Agreemeent,
Security deposit and the first month’s rent is payable,
less any good faith deposit given earlier with the 'Letter of Intent'.
You should check at least the following
accuracy in the Tenancy Agreement:
Tenant's complete details – name, address, ID details
Landlord's complete details – name, address, ID details
Payment details - including when the rent is due and how it is to be paid
Duration – start / end dates
Security deposit – should be one month’s rent for every 12 months of lease
Termination – normally this is included in the Diplomatic Clause.
I may be accompanied by a reimbursement clause.
The latter states that if you exercise the Diplomatic Clause,
you will have to reimburse part of the commission
the landlord had paid to his/her agent - pro-rated to the remainder of the lease term
(for example, if you leave 2 months before the end of a 24-month lease,
you will pay the landlord 2/24 of the commission he/she paid to the agent).
Legalities - Your agent will guide you through all legalities and negotiate on your behalf.
Of course you should be aware of the basic responsibilities as a tenant,
particularly as the Singapore law may be considered favoring landlords.
E.g. in case the tenant fails on rental payments,
the landlord may get a court order to re-possess
the property and/or seize and sell goods inside the property
to recover arrears in rent and legal costs. In other countries,
getting rid of this kind of tenants might take considerably longer.
Stamp duty - The tenant is obliged to pay stamp fee
to the relevant government body within 14 days
from the execution date of the Tenancy Agreement
(to make the tenancy agreement a legal binding document).
Usually the tenant’s agent will do the administration for you.
The fee/duty is based on the value of the rental.
First, sum up the monthly rent for premises,
furniture & fittings, service & maintenance charges and
other miscellaneous charges that are payable by the tenant to landlord.
Then, multiply the total monthly rent by 12 to derive the annual rent.
Lease formula (with effect from 29th Feb 1996):
$1 on every $250 of annual rent if the lease term is 12 months and below;
$2 on every $250 of annual rent if the lease term is
exceeding 12 months but equal or less than 36 month
$4 on every $250 of annual rent if the lease term is exceeding 36 months.
Example: for S$4,000 rent per month; 2 years lease:
stamp fee is S$ 48,000 / S$ 250 x 2 = S$ 384,--
Inventory / Moving In - When the property is taken over,
your agent will go through the place and verify (or create)
the inventory inclusive of furniture and fittings and state the present condition.
This inventory list will be signed and serves as reference at checking out later.
For items not deemed to be in order it is advisable to take photos,
or ask the landlord to fix them right away.
This can potentially avoid problems when you are moving out.
Moving out – it is recommended that, together with your agent a
“pre-inspection” is done prior to the actual moving out.
Please DO NOT terminate power supply
before the inspection and proper hand over .
This helps to verify the condition
of the property and possibly rectify things.
Also to make sure – if it is in the tenancy contract -
that air cons are serviced,
curtains are dry-cleaned (keep receipts) and the place is clean.
Likewise, upon termination at the end of the lease,
a clean and clear cut hand over should be able to avoid
that landlord exercises his rights
to deduct expenses from the deposit.
It would make more sense for you to fix a small item
(e.g. changing a light bulb)
and good cleaning with curtain dry washed before inspection
rather than the landlord sending an expensive electrician and
professional cleaning company.
AGENT'S COMMISSION STATED IN TENANCY AGREEMENT
Tenancy Agreement also
Spell out how the Commission should be
payable by the Landlord and Tenant
to their agent respectively.
Usually tenants pay service fee to Tenants' agent and
Landlords pay Commission to Landlord's Agent respectively.
It also state the Renewal Commission,
the clause of No refund of Commission
due to pre-termination of the lease by either party,
and the pro-rata commission panelty
payable by the party at fault.
Servicing Agent Scope of work
Landlord's agent shall cover the following scope of work :
Advertise, promote and marketing the Listing deligently;
Present the premises with facts to his best knowledge;
Prepare Tenancy Agreement and Inventory List;
Tenant's agent shall
Assist the tenant to find a suitable unit to his best effort;
Assist and advise the tenant regarding
the procedure of signing Tenancy Agreement with Landlord
with the payment of deposit and
assist tenant in understandng of all terms and conditions
stated in the Tenancy Agreement,
in some cases, if translation is needed;
Prepare Stamp Duties for documents after signing the Tenancy Agreement;
Turn on Power Supply for the Tenant Prior Take over the premises;
UTILITIES DEPOSIT
For your electricity and water / gas needs
Singapore Power Services (SP Services)
requires you to pay a deposit
before they will turn on the service.
The deposit will be reflected in your first bill.
The deposit currently varies,
depending on your residency status as well as
what kind of property you are renting.
For a foreigner renting a private apartment,
the deposit required is currently set as S$500.
Please check SP Services website for more details.
- http://www.spservices.com.sg/
You can turn on your Utilities online Prior to moving in to the premises.
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HANDOVER / TAKE OVER A PREMISES FROM LANDLORD OR PREVIOUS TENANT
On the hand over day,
TENANT fullfilled necessary payments
and produce necessary documents
to the Landlord according to Tenancy Agreement,
usually outstanding balance of the Deposit / Rent and
fee for Air Con Contract.
Upon receiving all the above necessary,
Landlord shall than give keys to tenant.
Inventory List being signed by both parties.
It is advised for tenant to spend a couple of minutes
to check the functionaity of appliances, heater, taps, lights etc
and raise to the Landlord if there is any issue.
After taking over the premises,
should there be any issue
please quickly inform and rectify with the
Landlord within 3 days or get all done within 7 days.
The Handover process is completed at this point of time.
After 7 days, it's the tenant's responsibility and duty to
take care of the premises.
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NOTE FOR SHORT TERM RENTAL AND ALL RENEWAL
Dear Tenants,
A GENTLE REMINDER
To prevent hold back, delay or
deduction in collecting your deposit back from the Landlord on the handover day when you return the premises, kindly take note of the following:
·
You
cannot use your deposit to offset the last month or last few weeks/days rent.
·
You
will still need to complete your last air con service and wash all curtains,
thorough cleaning within last 2 weeks
prior to your hand over.
·
A
thorough clean up of the whole premises before handover is important and necessary to allow the next tenant from another nationality take over comfortably. It is advised not to do a last minutes clean
up rush to avoid Cleaning Penalty being imposed.
·
Any
Repair / Replacement of missing/damaged/broken articles / Leakages all need to
be done before handover;
·
With all the, and without
forgetting that you still need to FULFILL ALL CLAUSES AND TERMS in the subjected Tenancy
Agreement, you should have no much problem to get your cash deposit on the spot without deduction or holding.
This is to avoid unnecessary
Cost or Workmenship being charged and deducted from the deposit.
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