About to rent an apartment in Singapore?
Be sure to know what documents you’re signing! Scroll through our gallery for our handy guide.
The Letter of Intent states your intention to rent the place, and your requirements to the landlord. If you need repairs done, or new fittings, add them to the LOI. After the landlord signs the LOI, he is legally obliged to provide what you asked for, like repairs needed to the apartment, or the fact that you asked for a new washing machine, or the extra sofas to be removed. Note these clauses in your LOI:
- Diplomatic or Repatriate Clause
This applies to tenancy agreements with tenure of over one year. If you are no longer employed or your workplace transfers you to another country, you can terminate the lease after 12 months by giving two months notice. Your security deposit will be refunded to you. Most landlords will only include the diplomatic clause if the lease is more than a year. Be aware that in a standard Singapore Tenancy Agreement, there is usually the reimbursement clause together with the diplomatic clause – this states that if you use the diplomatic clause and break your lease, you’ll have to reimburse to the landlord part of the commission he paid to his agent. The amount is pro-rated depending on how long your tenancy still has to go.
- Good-faith Deposit or Booking Deposit
This is usually one month’s rent for a 12-month lease. When you and the landlord sign a Letter of Intent, you may be asked to pay a “good-faith” deposit. After he’s signed the LOI and taken this deposit, he cannot rent the property to anyone else. But you don’t lose this deposit money – it becomes part of your Security Deposit after the Tenancy Agreement is signed, or you can negotiate for it to be deducted from your first month’s rent. However, if you back out of the deal, it is possible for the deposit to be forfeited to the landlord.
- Security Deposit
The standard practice in Singapore is usually one month’s rent for every year of your lease. You only pay it after you sign the Tenancy Agreement. The landlord keeps this money and can use it at the end of your lease to pay for repairs to the property if you damage it, or costs and expenses arising from you breaking the lease. Assuming there are no costs, you get the full amount of the security deposit back (without interest) after you leave your place of rent.
- Term of Lease
In Singapore, the standard lease is one year or longer, with or without an option to renew the lease. Most landlords won’t accept “short-term leases” for less than one year. After a year of renting a place, you can opt to renew the lease for another one to two years – but you will need to give the landlord two or three months’ notice. At this time the landlord may (or may not) decide to raise the rent, so you’ll have time to negotiate, or find another place if you decide to move out.
After the LOI is signed, the landlord will prepare the Tenancy Agreement. You will only be liable for stamp duty fees or for any legal fees arising from your personal engagement of a lawyer to vet the agreement. You will also need to prepare the rest of the security deposit and advance rental.
For a one-year lease, your security deposit will be one month’s deposit and one month’s advance rental. For a two-year lease, it’s two month’s deposit and one month’s advance rental. Note that the good-faith deposit amount you have paid when signing the LOI can be used as an advance rental so your rental next due is for the second month.
- Details about Utilities, Telephone and Cable Television Bills
Installation charges (if any) and the monthly bills for these are usually the tenant’s responsibility, but you can sometimes negotiate to have some of these fixed bills to be included in your rental as part of a package. This can be handy if you travel a lot for work.
- Repairs and Maintenance
You must maintain the apartment and pay for minor repairs or fixing wear and tear. In a standard agreement, this means paying for repairs up to $100 or $150.
Only major repairs and maintenance are the landlord’s responsibility, provided the damage or malfunction of appliances is not caused by the tenant’s negligence. You will also be required to take up service contracts for air-conditioning, gardening, pest control or pool servicing, and may be required to keep receipts as proof.
- Check the Rent Amount
Sometimes the landlord will divide the rent into the rent of premises, rent of furniture and fittings, and maintenance fees. Make sure it adds up to the amount you agreed on.
In SG, Tenancy Agreements need to be stamped by the Inland Revenue Authority of Singapore (IRAS) to be legal and used as evidence in court for any disputes. Stamp duty costs are usually paid by the tenant. To find out more about these costs, visit here.
By Mizah Salik + Tara Baker, The Finder Issue 299
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