Renting Property in Singapore
Most expats moving to Singapore are transient, having been relocated by a large company for a few years and then sent on their way again. It follows that the majority of expats are more interested in renting property in Singapore, rather than buying.
The most important part of the process of finding and securing housing is finding a good estate agent, which is best achieved through word of mouth. Once expats have managed this feat, what follows is considerably simpler and less stressful.
Ten steps to renting property in Singapore
1. The property agent
Once expats have done some research – that is, compiled a shortlist of criteria that they'd like their future home to meet – they can pass this list to their property agent. The agent will use this to gather a number of available addresses that match all their listed points. The screening process that follows involves the agent taking expats on viewings so that they can acquaint themselves in person with the kinds of homes that are available.
A handy tip for expats is to bring a notepad to the viewings so they can jot down findings, as well as a camera to take pictures of aspects of the homes that grab attention. It is important to keep a lookout for things like redecoration issues or repair jobs that present themselves, and make refurbishing suggestions based on any shortcomings in this area. Also, by all means, expats should ask the incumbent tenant, the landlord or the agent as many questions as possible to get a full picture of the property. For instance, ask about the noise levels at various times of the day, the direction/intensity of the sun, the neighbours, as well as whether there are any hidden problem areas and whether there will be any major construction in the area soon.
2. Making an offer
Having found a suitable place, expats will then need to inform the landlord of their interest. They should start by letting the agent know how much they'd like to offer as he or she is best placed to know if the offer has a good chance of being accepted or if it needs to be tweaked. Once an expat and the agent have reached a consensus on the amount to offer, the landlord is then told.
This is where things take a more formal turn.
3. Letter Of Intent (LOI)
In order to 'lock in' a choice, expats will need to show the landlord a token of their sincerity. This token is known as an LOI or Letter Of Intent. In addition, they need to make a so-called good faith deposit or booking deposit which is usually one month's rent.
By accepting the LOI, the landlord in return will not rent out the unit to anyone else during the negotiations that follow between the two parties. Of course, at this point the landlord and tenant should have by now more or less agreed, at least verbally, on the main items in the LOI.
Once an expat receives the landlord's counter-signed copy of the LOI, they're well on the way to becoming his or her tenant.
4. Awaiting the landlord's reply
One of two things can happen next. Negotiations may stall, after which the landlord rejects the LOI and refunds the good faith deposit. Alternatively, the LOI is received well and the expat can move on to the Tenancy Agreement stage.
5. Tenancy Agreement (TA)
The TA comprises the terms and conditions under which the property is leased, including the actual rent suggestion. A TA is signed by both the tenant and the landlord and is basically a more detailed version of the LOI. It essentially spells out clearly the tenant and landlord's responsibilities and accountabilities. Usually a standard agreement template will suffice, at which point no legal fees are due. However, if amendments to the TA are needed, it's best to have the final draft checked and verified by a lawyer, especially since Singapore’s laws can be regarded as quite landlord-friendly.
Incidentally, since asking rents are negotiable, expats can use their bargaining skills. Keeping in mind that rental tenures in Singapore are generally for one or two years, an expat can use this fact in their favour in negotiations. This also applies to asking for a month's worth of free rent in lieu of a lower rent. If the landlord is not budging from the rent at all, more often than not he will agree to a month's worth of free rent, because this way he gets to 'keep face'.
6. Rounding off the procedure
Once the TA has been signed by both parties, expats will need to submit the following to their landlord: a copy of their passport and Employment Pass, as well as the first month's rent in advance and the security deposit (usually one month’s rent for every year of lease). Note that the security deposit is refunded to the tenant – in most cases interest-free – once the lease term expires.
Other points to note before signing a rental agreement:
Make sure the unit's landlord is indeed landlord of the property and always ask for a valid receipt upon handing over the cheque
If a good faith deposit was given with the Letter Of Intent, then this amount is deducted from the advance rental and the security deposit
The security deposit may be forfeited on premature termination of the lease
The landlord has the right to deduct all costs of damages and expenses arising from any breach of contract as stated in the Tenancy Agreement. For this reason, it is suggested that if any damage occurs to the property which does fall under the normal wear and tear clause, the tenant carries out the repairs themselves as this will be cheaper than waiting for the landlord to do it.
Maintain all documentation for future reference.
Some landlords split up the rental amount into A. rental of premises, B. rental of furniture/fittings/etc. and C. maintenance fees. So, ensure that the rental amount that has been agreed on is in fact the final tally, apart of course from the separate items mentioned below.
7. Agent commission
Most property agents charge the equivalent of half a month’s rent in the event of a one-year lease and one month’s rent in the event of a two-year lease. In addition, there is a seven percent Goods and Services Tax (GST) surcharge.
8. Stamp Duty
In order to make the TA a valid legal document to be honoured by all parties involved, it has to be stamped by the Inland Revenue Authority of Singapore (IRAS). The charges for this procedure, a so-called 'stamp duty', are borne by the tenant.
It is suggested that this stage not be omitted, since it would not only be in breach of Singapore law but would also undermine the tenant's case should a dispute occur between them and the landlord.
9. Moving in
After a tenant has received the keys to their property, they should have a close inspection around the place – checking the aircon, water heater, appliances, fittings, the state of the walls, the furniture (if applicable), the tiling, and of course doing an inventory listing, i.e. making sure that nothing is missing and noting each item's condition. A good practice is to take pictures of anything looking a little worse for wear that may have been missed during the initial viewing of the unit. Email copies of the pictures to the landlord so both parties are aware that these particular problem areas exist at this early juncture, so that they can be rectified. This way tenants can be sure they won't be held liable when the lease expires.
Since utilities are not included in the rent, new tenants will have to set these up themselves. These include a power supply, piped gas, residential telephone line, residential Internet connection and cable television.