Property leasing guide

It is highly recommended that you seek the services of your preferred real estate professional when you are searching for a home to lease in Singapore. The law does not permit real estate professionals to represent both landlord and tenant in a single transaction. Hence it would be advisable to engage your own real estate professional to represent your interest when leasing a property in Singapore.

Location

Deciding on the right location is very important and it will determine the convenience for you family and yourself.

Price

Have a realistic budget will help evaluate which are the areas and apartments or houses that are suitable for you.

Selection of an accommodation

Your real estate professional will help to arrange for viewing the preferred type of properties whether a landed house, condominium or HDB flat.

Documentation

To facilitate the Letter of Intent and Tenancy Agreement, the following are required:

•  Copy of tenant/s and occupiers’ passport
•  Copy of employment pass
•  Good faith deposit to confirm the intention to lease (this is usually one month, but subject to
•  both parties agreement)

Your real estate professional will then prepare the necessary documents such as the Letter of Intent and Tenancy Agreement for both landlord and tenant to sign.

Letter of Intent//Letter of Offer

Upon deciding on the property, a letter of Intend/Offer indicating an intention to lease with the requirements together with a Good Faith deposit are to be presented to the landlord. This offer is usually valid for three days.

The following should be noted:

1. Good Faith Deposit (booking fee)

This is the booking deposit, usually the amount is one month's rent. After the landlord signed the Letter of Intent and accept this deposit, he cannot offer his property for lease to other tenants. This deposit will become part of the security deposit or advance rental after the Tenancy Agreement is signed.

2. Security Deposit

The amount of the security deposit is usually stated in the Letter or Intent. The standard practice is one month's rent for every year of lease. However, this may differ, especially if the property is new, hence subject to agreements between both parties. It will only be payable upon signing of the Tenancy Agreement.

When the lease term ends, the deposit will be refunded without interest. However, the landlord reserves the right to deduct from the deposit all costs and expenses arising from the tenant for breaching any of the clauses specified in the Tenancy Agreement.

3. Diplomatic or Repatriate Clause

This clause is to safe guard the tenant in the event a tenant is no longer employed or deployed to other countries, you can terminate the lease after 12 months by giving 2 months notice. The tenant needs to provide documents from the company to show proof of termination of employing in Singapore. Thereafter, the security deposit will be refunded to you. Landlords will usually accept the diplomatic clause for leases that are at least two years.

4. Term of Lease

Lease period can now be at least 3 months. However, most landlords will lease out their properties for at least 1 or 2 years, with an option to renew clause. To exercise the lease renewal option, the landlord would normally require that you give 2 or 3 months' advance notice of your intention to renew

5. Your Requirements

If you are looking for a furnished apartment, you may wish to list your requirements and requests in the Letter of Intent clearly, if they are not already in the apartment. Once the Landlord accepts your Letter of Intent and the good faith deposit, it will be difficult to put forth additional requests to the Landlord.

6. Furnishing

Fully furnished means the landlord is to provide standard furniture pieces such as Living and Dining room sets, Beds in bedrooms, curtains and lightings. White goods such as refrigerator, washer/dryer, cooker and cooker hood are also provided. Partially furnished accommodation comes with white goods, curtains and lightings.

Sometimes landlords may be flexible to consider requests for partial furnished apartment to be fully furnished, subject to negotiation on the rental price. Speak to your real estate professional to assist you in your accommodation needs to ensure you settle down in a lovely home during your stay in Singapore.

Tenancy Agreement

A time line (usually 3 days) will be indicated to the landlord to revert with the signed Letter of Intent, and a subsequent draft Tenancy Agreement. The security deposit and advance rental will be presented to the landlord upon signing of the Tenancy Agreement. You will then need to have the Tenancy Agreement stamped.

These are the important terms to take note of when signing the Tenancy Agreement:

1. Agreed Rental Amount

When finalizing the rental amount, ensure other fees are clearly spelt out and agreed in the Tenancy Agreement, for example minor repair costs, servicing of air-conditioners, maintenance fees, subscription fees for service providers.

2. Deposit

For 1 year lease - 1 or 2 month's deposit and 1 month's advance rental. For 2 years lease - 2 month's deposit and 1 month's advance rental. Minus the good faith deposit (if applicable) that you have paid when signing the Letter of Intent.

3. Public Utilities, Telephone and Cable Television

The installation charges and the monthly bills for the following services are the tenant's responsibility:

•   SP Services - the water and electricity supply
•  City gas - piped gas in selected areas.
•  Singapore Telecom- residential telephone line or broadband services
•  Starhub Cable Vision (SCV) - cable television and cable broadband services
•  Sometimes, a tenant can request for some of the fixed bills to be included in the rental amount as a package, subjected to mutual agreement during negotiation.

4. Repairs and Maintenance

The tenant is responsible for maintaining the leased premises, and carry out minor repairs at own costs. Though there is no fixed amount for minor repair, it usually ranges between S$200-$500, or higher for depending if they are typical or luxury residences. Only major repairs and maintenance would be the landlord's responsibility provided the damage or malfunction of appliances is not caused by the tenant's negligence. The tenant will have to take up service contract for items such as air-conditioning, gardening, pest control or pool servicing.

5. Stamp Duty

Tenancy Agreement will need to be stamped by the Inland Revenue Authority of Singapore. Only after the Tenancy is stamped then it can be considered a valid contract as evidence in court for any disputes that may arise in the future with your landlord. This serves to protect the interest of both parties. The stamp duty is borne by the tenant.

Example of computation of the stamp duty fee (updated 22 Feb 2014):

7. Pre-mature termination of Lease

Speak to your real estate professional with regards to the options and penalties for an unfortunate situation when you have to terminate the lease in advance. These points would be clearly spelt out in your tenancy agreements, and exceptions are subject to landlord’s approval.

8. Taking Over the Property

An inventory List will be prepared and checked through by Landlord’s representative and Tenant’s representative if the tenant engages his own real estate agent. Check through all appliances to make sure they are in working order. Any discrepancies or mull functioning of items, highlight to the landlord or his representative to have it rectified. The usual practice is a period of at least 7 days to ensure all appliances and furniture, furnishing are in proper.

9. Professional Fees to your real estate agent

Check with your real estate professional on the fees for engaging their services. Payments should be made directly to the company when an invoice is issued.

The above serves as a guide when renting a home in Singapore. Please do consult your real estate professional or your solicitor to get the latest rules and regulations relating to renting of property in Singapore.

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