Rental Contracts in Singapore
Understand the different elements of the rental contract and the obligations of the landlord and tenant when renting property in Singapore...
The following documents will be needed to take out a property rental contract:
- Passport (photocopy pages containing personal information)
- Photocopy of Employment Pass
- Deposit (three months' rent is usually secured for the deposit. This will be returned at the end of the contract, with deductions for damaged or missing items)
Lease agreements are usually for a period of two years with a minimum of a six- or twelve-month break clause. Check that the contract has a Diplomatic or Escape Clause. This means that the contract can be terminated before the break point if the tenant is posted elsewhere or the employment pass is cancelled. Proof is often required in these circumstances
The rental usually includes white goods such as fridges, washing machines and air conditioners, but is otherwise unfurnished. Home improvements, such as painting, renewing or upgrading bathrooms and kitchens, can be negotiated in the rental price.
Utilities and Services
The tenant is usually responsible for any installation and monthly bills for utilities, such as gas, water and electricity, and for services such as telephone and TV. The realtor should be able to assist in getting connected to these services.
Professional inventories are rarely taken so it is often advisable to take photographs or draw up an inventory of the contents and their condition and get the property owner or their agent to sign it. This can be useful in the event of a dispute at the end of the tenancy.
Check whether the following ongoing expenses are included in the contract:
- the cost of air conditioning maintenance and how often is it serviced
- pest control (particularly important if living in landed property)
- garden maintenance and how often
- pool maintenance and pool cleaning products
A minor repairs clause is contained in every residential Tenancy Agreement in Singapore. Under the terms of this clause, the tenant is required to pay for all repairs that are required as a result of wear and tear. The actual amount is negotiable and can vary, for example, from $100 (for a small apartment) to $250 or more for a house. Some landlords agree to pay the full price of repairs in the event the cost of a repair exceeds the minor repairs limit; others require the tenant to pay the nominated amount in each and every case, the landlord paying only the excess.
Major repairs and maintenance are the responsibility of the landlord, unless the damage has been caused by the negligence of the tenant. There may be an excess (minimum amount that the tenant has to pay if something needs to be repaired).
Where a property is leased, the ability to further sub-let or not depends on the terms of the lease agreement, but in general subletting is not done. Even if sub-letting is allowed, there may be conditions attached. Always agree on the terms of the lease upfront rather than try and change them when the need arises as the owner does not have to agree to changes during the lease period.
Opting out of a lease/rental agreement
An executed lease cannot be terminated by either party except by mutual consent or the exercising of the diplomatic clause by the tenant. Early terminations or "break-lease" initiated by the tenant can be expensive, requiring the tenant to pay rent up to the time that the diplomatic clause could be exercised. However, the realtor should be able to assist in negotiating with the landlord and find a replacement tenant. The costs associated with securing the incoming tenant will be met by the outgoing tenant and may include payment of agent's commission, repainting, requested tenancy works, payment of rent up to the date the new tenancy agreement commences and other factors.
End of the Rental Period
Unless there is an Option to Renew the lease for a further term and the tenant has exercised that option or the parties have agreed to an extension, the lease will expire and the tenant should hand over the property to the owner.
A formal handover with both parties (or their representatives) present is recommended to avoid dispute over deductions from the deposit.
Goods & Services Tax (Gst): If a landlord is GST registered, GST will be payable in addition to the agreed rental.
Stamp Duty: This tax is payable on all Tenancy Agreements. Stamp Duty is paid by the tenant and is calculated based on the annual rent and term of the lease. The document must be stamped within 14 days of the date of the agreement. Penalties are payable for late payment and there are fines for evasion.
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