Rental Procedure

 

Singapore Property Rental Procedure

We provide you with our Six Steps Rental procedure to rent a property in Singapore.

Each step cover useful guide and information for Tenants seeking to rent or lease a property to settle down or st up their business in a foreign land. We hope that by following the steps, your relocation here will be made a little easier and hassle free..

Step 1.  Decide on your Relocation Requirement

Step 2.  Engage a Real Estate Agent

Step 3.  Viewing and Selection of Properties

Step 4.  Tenancy Documentation

Step 5.  Payments

Step 6.  Taking Over of Premises

 

 

 Step One : Decide on your Relocation Requirement

a. Determine your rental budget you want to set for your new home. Include expenditure such as Public utilities, telephone, cable TV, cleaning services into your budget. Discuss onset with your Company on the housing allowance if you are on expatriate term.

b. The housing budget will largely predetermine the type and location of housings you will be able to afford. In any case, decide what type of housing suitable you or your family needs. Condominium with facilities and security will be ideal for families. Or you may want a bungalow with a private  inground pool for your regular entertainment etc.. To each his own, discuss with your family.

c. Choosing the right location is of paramount  importance. This will determine the daily convenience not just for you but also your family members. Check out the nearest MRT station or bus stops in the vicinity. Ensure that there are schools nearby suitable and available for the kids too.

d. Do you and your family have any special needs or wants? Big land with a black and white bungalows? Penthouse in the choicest location? Or is there a need for the new home to be close to nature, peace and quiet? High floor facing the ocean or city views?  Or something …

Knowing what you need is the basic first step to getting you the best home away from home

 

Step Two : Engage a Real Estate Agent

A professional real estate agent in Singapore will assist you and protect your interest throughout the tenancy. Being a professional in the industry, the agent will be in a better position to recommend you a suitable property meeting your varied needs at the same time securing the best offer for you. He will also ensure that all Tenancy documents are in order and you are signing and dealing with the rightful owners of the property you selected.

We have the expertise and resources to assist you in all your relocation needs. We provide an updated list of comprehensive property listings here on this site online. Our Singapore Properties section covers a wide range of housing selection including condominiums, apartments, houses and commercial properties in Singapore. Special housing needs are also grouped separately for easy and fast selection.

Hot deals in town are also available from time to time. You may be able to secure something you want at a real bargain! 

 

Step Three : Viewing and Selection of Properties

Normally, the Real estate agent will pre select a list of properties that will meet your requirement. Round of viewing inspections will be arranged to show you the pre-selected properties including the immediate vicinities and surroundings. Subsequent second viewings can also be arranged to confirm final choices.

When you have finally decided on the property, the agent will then proceed to negotiate the rental terms and offers with the landlord or the owners’ representatives. After the negotiation has been successfully carried out, you will need to prepare the following item to confirm the tenancy:

§         A photocopy of the tenant passport

§         A photocopy of the tenant employment pass

§         One month's rental for the goodfaith deposit

Your agent will then prepare the necessary tenancy documents such as the Letter of Intent and Tenancy Agreement.

 

Step Four :  Tenancy Documentation

A.  Letter of Intent

The Letter of Intent, LOI in short, is a letter proposing your intention to lease the property and your requirements to the landlord.

You should take note of the following:

 

1. Term of Lease

In Singapore, the standard lease period is normally 2 years, with or without an option to renew the lease. The lease renewal is usually for another 1 to 2 years. However, I year lease is also acceptable in the current market condition. For the lease renewal option, the landlord would normally required the tenants to give 2 or 3 months' advance notice of their intention to renew. Generally, most landlords are reluctant to accept leases that are less than 1 year.

 

2. Goodfaith Deposit

This is the booking deposit, and the amount is usually equivalent to one month's rent. After the landlord signed the Letter of Intent and accept this deposit, he cannot rent the said property to any other party. This deposit will become part of the security deposit or advance rental after the legal Tenancy Agreement is signed.

 

3. Security Deposit

The amount of the security deposit is usually stated in the Letter or Intent. The standard practice in Singapore is usually one month's rent for every year of lease. It will only be payable upon signing of the Tenancy Agreement. When the lease term ends, the security deposit will then be refunded without interest. However, the landlord 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.

 

4. Tenants’ Requirements

The premise can be rented either Fully Furnished or Partially Furnished.

 

Fully furnished means the apartment or house you are renting comes with all the furniture and all the essential electric appliances such as refrigerator, washer and dryer and curtains, lightings.

 

Partially furnished apartments or house usually only comes with essential electric appliances such as refrigerator, washer and curtains, lightings without furniture. Although a house may be partially furnished at the time of viewing, you can always request the landlord to fully furnish it or request him to get the items you require. All these requests and special requirement are subject to negotiation and will also eventually determine the final rental amount.

The Tenant must ensure that all their requirements and requests are stated in the Letter of Intent clearly. The requirement could be a request for fresh coat of paint, a new sofa, additional beds or TV or whatever etc. After the landlord committed to the request by signing the Letter of Intent, he is bound by the Letter to provide your requests.

5. Diplomatic or Repatriate Clause

This clause is to safe guard tenant if in the event the tenant are no longer employed, transferred to other countries, you can terminate the lease after 12 months by giving 2 months notice.

Thereafter, the security deposit will be refunded to you.It should be noted that most landlords will only agreed to the inclusion of the diplomatic clause if the lease is 2 years or more.

 

B.  Tenancy Agreement

After the Letter of intent is duly signed. The landlord or his agent will prepare the Tenancy Agreement.

The Tenancy Agreement sets out the rules landlords and tenants agree to follow in their rental relationship. It is a legal contract, as well as an immensely practical document full of crucial business details, such as how long the tenant can occupy your property and the amount of rent due each month. Be sure your agreement complies with all relevant policies and local laws including occupancy rules, immigration policy, Condominium management rules and regulations, security deposits, notice requirements for entering rental property, diplomatic clauses or rules for changing or ending a tenancy and more.

It is always preferred that the landlord or the landlord's agent uses the standard IEA agreement. Your agent will then assist you to ensure that the Tenancy Agreement is fair and unbiased toward any parties.

Here are some of the most important items to cover.

1. Names and Particulars of Landlord and Tenant

The names, passport or NRIC No and corresponding addresses of both Landlord and Tenant should be in your Tenancy agreement. This makes each party traceable or contactable at all times to comply with the term of the tenancy.

 

2. Term of the Tenancy

In Singapore, the standard lease period is normally 2 years, with or without an option to renew the lease. The lease renewal is usually for another 1 to 2 years. However, I year lease is also acceptable in the current market condition.

For the lease renewal option, the landlord would normally required the tenants to give 2 or 3 months' advance notice of their intention to renew. Generally, most landlords are reluctant to accept leases that are less than 1 year.

 

3. Rent

Your lease or rental agreement should specify the amount of rent, when it is due (typically, the first of the month), and how it's to be paid, such as by mail to your corresponding address.

 

4. Security Deposit

Corresponding to the LOI, the deposit is usually one month's rent for every year of lease. It will only be payable upon signing of the Tenancy Agreement. When the lease term ends, the security deposit will then be refunded without interest. However, the landlord 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.

 

5. Diplomatic or Escape Clause and Reimbursement Clause

As mentioned before, this clause is to safe guard you if in the event you are no longer employed, transferred to other countries, you can terminate the lease after 12 months by giving 2 months notice. Thereafter, the security deposit will be refunded to you.

In a standard Singapore Tenancy Agreement, there is usually the reimbursement clause together with the diplomatic clause. This clause states that if you exercise the diplomatic clause, you will have to reimburse part of the commission the landlord had paid to his agent.

 

The reason behind this clause is that the landlord had paid the full one month's agent commission for a 2 years lease but if you terminate the lease by exercising the diplomatic clause, hence unable to complete the full 2 years, you will have to refund the pro-rata commission. Since landlord grants the diplomatic clause, they will usually demand reimbursement clause to be included in the tenancy agreement.

 

6. 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, electricity and city gas supply.

  • Singapore Telecom - residential telephone line.

  • Cable TV (SCV) - cable television and broadband internet.

There are times where the tenant can request for some of the above bills to be included in the rental amount as a package.

 

7. Repairs and Maintenance

The tenant is responsible for maintaining the leased premise. The tenant will have to take up service contract for items such as air-conditioning, gardening, pest control or pool servicing. The Tenant will also carry out minor repairs at own costs. In a standard IEA agreement, the tenant will only be responsible if the amount of the repair does not exceed S$100 to S$200 depending on the housing type.

 

Major repairs are under the landlord's responsibility provided that the damage or malfunction of appliances is not caused by the tenant's negligence.

 

Step Five : Tenant’s Payments

1. Security Deposit and Advanced Rental

You will need to prepare the rest of the security deposit and advance rental upon signing of the Tenancy Agreement.

 

For 1 year lease :     1 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 goodfaith deposit (if applicable) that you have paid when signing the Letter of Intent.

 

2. Stamp Duty

 

The Tenancy Agreement will have to be stamped by the Inland Revenue Authority of Singapore. Only after the Tenancy has been stamped then it can be submitted as a legal and valid evidence in court to resolve any disputes that may arise in the future with your landlord. This is to protect the interest of both contracting parties.

 

The stamp duty is usually borne by the tenant and computed as follows

 

(rental amount x 12)

Round up to nearest dollar then multiply by the no. of years of lease

+ $2 for duplicate copy

+ $4 for admin fees

          250

 

 

3. Agency Service Fee payable by Tenant

 

a)  One year Tenancy term

The agency service fee payable is half month rental

 

b)  Two years Tenancy term

If the rental amount of the apartment / house you are renting is above $2,500, NO agency service fees will be payable by the tenant.

 

c)  If the rental amount is exactly $2,500 or less, the service fee payable will be half month rental

 

 

 

Step Six :  Taking Over of Premises

 

The landlord or his agent will prepare an Inventory List on or before the day of handing over. The PUB will have to be turned on by this day.

 

Check off the items listed in the inventory. Check all electrical appliances, air-con, lightings, water heater etc to ensure that they are in good working condition.

 

If there is anything not working or working unsatisfactory, note it down on the inventory list. Allow the landlord or his workmen to rectify the defects within a reasonable period.

 

Home sweet home !!


 

 

www.Tenantz.com is a division of Teakhwa Real Estate Pte Ltd.  A Licensed Real Estate Company in Singapore

Copyright 2004,  www.Tenantz.com.  All rights reserve