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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:
ONE YEAR LEASE OR LESS
(rental amount x 12)
250
then round up to the
nearest dollar and
+ $ 2 for duplicate copy
MORE THAN ONE YEAR to THREE YEARS LEASE
(rental amount x 12)
250
then round up to the nearest dollar then multiply by 2 and
+ $ 2 for duplicate copy
MORE THAN THREE YEARS LEASE
(rental amount x 12)
250
then round up to the nearest dollar then multiply by 4 and
+ $ 2 for duplicate copy
6. Term of Lease
The standard lease period is 1 year or more, with or without an option to renew the lease.
Inventory
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
Depending on the duration of the lease, the commission payable to the realtor is - Half a month's rent for one-year lease and One month's rent for two-year lease.
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.
We charge the following commission (plus the prevailing Goods & Services Tax):
When rental price is S$ 3,000 or below Tenant / Landlord - 0.5 month commission for 1 year lease and 1 month commission for 2 year lease.
When rental price is above S$ 3,000
Tenant - 0.5 month commission for 1 year lease Landlord - 0.5 month commission for 1 year lease and 1 month commission for 2 year lease.
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