Procedure for Rental

Property Search

Engage a Realtor

A professional property agent in Singapore will assist you and protect your interest throughout the purchase, secure the offer for you at the best possible price. With a much better knowledge of Singapore, the agent will be in a better position to recommend and advice on the choice of property. He will also ensure that all documents are in order and you are dealing with the rightful owner of the property.

Use Only 1 Agent

Most property companies share the same database of property listings in Singapore. Therefore use only ONE agent at a time. If you approach many agents at the same time, very likely that they will show you the same property. Much confusion and embarrassment will arise if you engage many agents. Using 1 agent, you will save valuable time for yourself and the agent. He will then understand your needs and requirements better after a few viewings. Only if they are incompetence, unresponsive or not showing the correct property you wanted, then start to look for another agent.

Location and Price

Deciding on the right location is very important and it will determine the convenience for you family and yourself. Price - budgeting yourself will also evaluate which are the areas and apartments or houses that are suitable for you. Refer to our House Hunt Guide for more details and tips.

Documentation

You have decided on take up a property and you need to prepare the following:

• Photocopied passport
• Photocopied employment pass
• One month's rental for the goodfaith deposit

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

Letter of Intent

The Letter of Intent, LOI for short, is a letter proposing your intention to lease and your requirements to the landlord. You should take note of the following:

1. Diplomatic or Repatriate Clause

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. Please note that most landlords will only include the diplomatic clause if the lease is more than a year. 

2. Goodfaith Deposit (booking deposit)

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 rent the property to other party. This deposit will become part of the security deposit or advance rental after the 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 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 covenants stated in the Tenancy Agreement.

4. Term of Lease

In Singapore, the standard lease period is more than 1 year, with or without an option to renew the lease. The lease renewal is usually for another 1 to 2 years. For the lease renewal option, the landlord would normally require that you give 2 or 3 months' advance notice of your intention to renew. Most landlords will not accept leases that are less than 1 year.

5. Your Requirements

Ensure that all your requirements and requests are stated in the Letter of Intent clearly. Like requesting a new sofa, new bed or new washing machine etc. After the landlord had signed the Letter of Intent, he is bound by the Letter to provide your requests.

Fully Furnished (F/Furn) or Partially Furnished (P/Furn)  - Fully furnished means the apartment or house you are renting comes with all the furniture, white goods (refrigerator, washer and dryer) and all the essential electric appliances. Partially furnished apartments or house usually only comes with white goods, curtains, lightings or some other loose items. 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 issues are always negotiation and will determine the final rental amount.

Tenancy Agreement

After the Letter of intent is duly signed. The landlord will prepare the Tenancy Agreement. Any legal fees incurred for the drawing up of the agreement is usually borne by the tenant. However, if the landlord's agreement is acceptable, there will usually not be any legal fees involved.

If the landlord or the landlord's agent is using the standard IEA agreement, it should be fine. Your agent will then ensure that the Tenancy Agreement is fair and unbiased.

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.

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

1. Diplomatic or Escape Clause and Reimbursement Clause

Check for this clause. 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. Please note that most landlords will only include the diplomatic clause if the lease is more than a year. 

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.

2. 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.
• Starhub Cable Vision (SCV) - cable television and cable broadband internet.

Although at times the tenant can request for some of the fixed bills to be included in the rental amount as a package.

3. Repairs and Maintenance

The tenant is responsible for maintaining the leased premise, carry out minor repairs at own costs. In a standard agreement, the tenant will only be responsible if the amount of the repair does not exceed S$100 or S$150.

Only major repairs and maintenance would be the landlord's responsibility provided that 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.

4. Rental Amount

Check the rental amount. Sometimes the landlord will divide the rental amount into a. rental of premises, b. rental of furniture and fittings, c. maintenance fees. Just make sure it adds up to the correct amount that you have agreed.

5. Stamp Duty

In Singapore, 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 is to protect the interest of both parties. The stamp duty is usually borne by the tenant.

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

6. Term of Lease

The standard lease period is 1 year or more, with or without an option to renew the lease.

Taking Over the Property

The landlord will prepare an Inventory List on or before the day of handing over. Check the items listed in the inventory. Check all electrical appliances, air-con, lightings, water heater etc.

If there is anything unsatisfactory, do not panic, note it down on the inventory. Even brand new houses have defects, therefore be understanding and allow the landlord to rectify it within a reasonable period.

Commission Payable

The market practice is if the rental amount is less than S$3,500, half a month commission will be payable.

Tenant and landlord should ensure that an invoice from a licenced real estate agency is issued to them. Upon payment, do not pay cash directly to the realtor, instead, issue a cross-cheque payable to the realtor's agency according to the invoice.