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Leasing of Private Residential Properties

How should I decide the rental price for Residential Properties?
It is not in your interest to overprice or underprice your property for rent.

  • You can get an idea of the transacted rental prices of similar private residential properties from URA’s e-Service – Check Rental Contracts of Private Residential Properties at https://www.ura.gov.sg/realEstateIIWeb/resiRental/search.action; OR
  • Just find a Property Agent for a Comparative Rental Market Analysis to help you set the asking and reserve rental price.
What should I consider when Leasing Private Residential Properties?
NO SHORT-TERM RENTALS ALLOWED
Private residential properties or their rooms within the premises should not be rented out on a short-term basis for less than 3 consecutive months.

Leasing of the whole unit or subletting of rooms for residential purposes is only allowed for long-term stays of 6 months or more if these conditions are met:

  • No internal partitioning works that alter the layout of the property to create more rooms. Such overcrowding can pose safety concerns.
  • Each occupant should have at least 10 sqm of space.
  • The maximum number of occupants in a residential unit is 6. This applies to all persons residing within your home. Unrelated occupants refer to any persons who are not part of the same family unit. Domestic caregivers hired by a family are considered part of the same family unit.
VERIFY IMMIGRATION / EMPLOYMENT INFORMATION OF TENANTS
Homeowners who wish to rent their premises to foreigners are required to exercise due diligence in checking the status of their prospective foreign tenants to ensure that they are in Singapore legally.

Before renting your room, flat or house, you are required to carry out the following THREE mandatory checks:

  1. Check the tenant’s ORIGINAL immigration pass and/or work pass.
  2. Cross-check the particulars of his pass against the particulars on his ORIGINAL passport.
  3. Verify the validity of his pass either by checking with the issuing authority, which is the Immigration & Checkpoints Authority (ICA) OR the Ministry of Manpower (MOM).
What is the procedure for Leasing of Private Residential Properties?
Stage 1: Landlord & Tenant Negotiate the Terms of the Tenancy
  • Tenant uses the Letter of Intent (LOI) to propose his terms for the Landlord's consideration:
  • Monthly Rent
  • Start Date & Duration of Lease
  • Diplomatic Clause
  • Tenant's Request - fully / partially furnished, etc.
Stage 2: Pre-Contract Stage
  • Tenant presents the LOI for the Landlord's consideration together with a goodfaith deposit equivalent to 1 month's gross rent.
  • Time Limit: Landlord has minimum of 3 days to accept / reject the tenant's proposal.
  • Upon accepting the Tenant's LOI, the Landlord will bank in the goodfaith deposit and will then prepare a Draft Tenancy Agreement (TA) for the tenant's perusal and signature.
  • The TA must be executed before the lease commences.
Stage 3: Contract Stage
  • Upon executing the TA, the Tenant pays the Landlord a security deposit of 2 months (usually).
  • The security deposit shall be returned to the Tenant free from interest at the end of the tenancy, subject to any deductions deemed necessary reinstatement or any breaches by the Tenant.
  • The goodfaith deposit paid earlier shall be taken as the 1st month's rent.
  • The contract is legally binding.
  • The tenant shall pay for the stamp duty on the tenancy agreement.
  • The tenancy agreement must be stamped within 14 days of the date of the tenancy agreement.
What is the documentation for Leasing of Private Residential Properties?
The 2 main documents involved for renting private residential properties are:
  1. Letter of Intent (LOI)
  2. Tenancy Agreement (TA)
LETTER OF INTENT (LOI)
The Letter of Intent is a letter proposing the tenant’s intention to lease and the tenant’s requirements to the landlord.

The following are essential components of the LOI:

  1. Diplomatic or Repatriate Clause
    • This clause is to safeguard the tenant in the event the tenant is no longer employed, transferred to other countries.
    • The tenant can terminate the lease after 12 months by giving 2 months’ notice.
    • Thereafter, the security deposit will be refunded to the tenant.
    • 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 of 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 at least 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 the tenant give 2 or 3 months’ advance notice of his intention to renew.
    • Most landlords will not accept leases that are less than 1 year.
  5. Tenant’s Requirements
    • Ensure that all the tenant’s requirements and requests are stated in the Letter of Intent clearly. Like requesting for a new sofa, bed or washing machine etc.
    • After the landlord has signed the Letter of Intent, he is bound by the Letter to provide the tenant’s requests.
    • Fully Furnished or Partially Furnished
      • Fully furnished means the apartment or house the tenant is 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, the tenant can always request the landlord to fully furnish it or request the landlord to get the items the tenant requires.
      • All these issues are always negotiable and will determine the final rental amount.
TENANCY AGREEMENT (TA)

  • 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.
  • The tenant 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 the tenant has paid when signing the Letter of Intent.
The following are essential components of the TA:

  1. Use of Premises as Private Residence
    • To use the said premises strictly as a private residence only and not to do or permit to be done upon the said premises any act or thing which may be or may become a nuisance or annoyance to or in any way interfere with the quiet or comfort of any other adjoining occupiers or to give reasonable cause for complaint from the occupants of neighbouring premises and not to use the said premises for any unlawful or immoral purposes.
  2. Not to Sublet or Part With Possession
    • Not to assign sublet or part with the possession of the said premises or any part thereof without the written consent of the Landlord.
  3. Diplomatic or Escape Clause and Reimbursement Clause
    • This clause is to safeguard the tenant. In the event the tenant is no longer employed, transferred to other countries, the tenant can terminate the lease after 12 months by giving 2 months’ notice. Thereafter, the security deposit will be refunded to the tenant. 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 the tenant exercises the diplomatic clause, the tenant will have to reimburse part of the commission the landlord had paid to his agent.
    • This is because the landlord had paid the full one month's agent commission for a 2 years lease but if the tenant terminates the lease by exercising the diplomatic clause, he is unable to complete the full 2 years & the tenant will have to refund the pro-rated commission.
    • Landlords that grant the diplomatic clause will usually demand the reimbursement clause to be included in the tenancy agreement.
  4. Public Utilities, Telephone and Cable Television
    • The installation charges and the monthly bills for the following services are the tenant's responsibility:
      1. SP Services
      2. the water and electricity supply
      3. City gas
      4. piped gas in selected areas
      5. Singapore Telecom- residential telephone line
      6. Starhub Cable Vision (SCV) - cable television and cable broadband internet
  5. 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.
  6. Stamp Duty
    • The 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.
    • This is to protect the interest of both parties.
    • The stamp duty is usually borne by the tenant.
    • The stamp duty is calculated 0.4% x total rent for the period of the lease.
What should I consider during handing and taking over for Leasing of Private Residential Properties?
The landlord’s agent will prepare an Inventory List on or before the day of handing over. The tenant should check the items listed in the inventory; and all electrical appliances, air-con, lightings, water heater etc. If there is anything unsatisfactory, the tenant should note it down on the inventory and allow the landlord to rectify it within a reasonable period.

Last updated: 30 Apr 2018

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