The Leasing Process

Pre-Qualification

At this stage, your Realtor-in-charge will establish your criteria and discuss various options. It is important to let your Realtor-in-charge understand your preferences before your house-hunting. The size of the development, the facilities available, the proximity to your office or school, etc. It is not recommended that you use more than one Realtor at a time as duplication of viewing of the same property is very high. One day is usually enough to establish a relationship with your Realtor. If at any point you are unhappy, you may notify your Mobility Accounts Manager to re-assign you a new Realtor.

Time Line

Your Realtor-in-charge will take you to view the properties fitting your requirements. On average, this process will take approximately 1 week.

In Singapore, properties are leased either fully furnished or partially furnished and in some cases unfurnished. These terms generally mean:

  • Unfurnished: The Landlord may provide lightings and curtains. Otherwise the property is bare.
  • Partially Furnished: On top of the above, the Landlord will provide fridge and washing machine. If there isn’t any built-in wardrobe, oven or dryer, these can be separately negotiated.
  • Fully Furnished: The Landlord will provide curtains and lightings, sofa, dining set, a double bed for the master bedroom and single beds for the other bedrooms. Wardrobes will also be provided for the bedrooms. The kitchen will have built-in cabinets, a refrigerator, a cooker, an oven and a washing machine. A clothes dryer or dishwasher may be available on request. Except for some rare cases, crockery, utensils, bed sheets, pillows, towels are normally not provided.
  • Other Requests: Requests for new curtains, cable connections or any other preferences can generally be brought up to the Landlord through your Realtor-in-charge, subject to negotiation.

Documentation

After you have decided to rent your ideal property and you will need to prepare the following:

  • Photocopied passport
  • Photocopied employment pass
  • One month’s rental for the good faith 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 the property. It will also state your requirements to the landlord. You should take note of the following:

  • Diplomatic Clause

    This clause is to safe-guard you in the event that your employment is ceased or you are transferred to another country such that 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.Good faith 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.

  • Security Deposit

    The amount of the security deposit is usually stated in the Letter or Intent. The standard practice in Singapore is usually two month’s rent. 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.

  • Term of Lease

    In Singapore, the standard lease period is usually 2 years, 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.

    Your Requirements

    Ensure that all your requirements and requests are clearly stated in the Letter of Intent. For example, such as 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 you the requests.

    Tenancy Agreement

    After the Letter of intent is duly signed, the landlord’s agent 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. You will need to prepare the rest of the security deposit and advance rental upon signing of the Tenancy Agreement.

    Other terms in the Tenancy Agreement which a Tenant may need to take note are:

  • Property Tax

    This tax is levied annually on all properties in Singapore. It is payable by the landlord. However, some landlords do request tenants to pay for any increment in the property tax levied during the tenancy period.

  • Stamp Duty

    It is a statutory requirement that stamp duty is paid on a lease agreement. This amount is payable by the tenant and the amount varies according to the annual rental and the length of the lease. It is a tax on documents computed based on a formulae; i.e. Annual rent divide by a factor of 250 and multiply by a factor of either 1 or 2 depending on the number of years is the lease. It is an offence to use a document which Stamp Duty has not been paid on. A penalty of up to 4 times will be imposed if detected.

  • Goods & Services Tax (GST)

    The Goods & Services (GST) Act was passed on October 1993 and came into effect on 1st April 1994. With effect from 1st July 2007, GST was adjusted to 7%. Although the sale and lease of residential properties are exempted from the 7% tax, the lease of any furniture, furnishings, fittings, appliances or effects are categorized under non-exempt supplies. Landlords who are GST-registered are therefore likely to pass on the 7% tax liability to their tenants.

  • Agent Commission

    Tenants do not incur any Agent Commission for cases where the gross monthly rental is more than $4,000. However, for cases where the gross monthly rental is $4,000 or less OR the lease is one year or less, then the Tenant shall pay the agent a finder’s fee based on the followings:

  • One (1) month’s gross rental for Twelve month lease or more; and
  • One half (1/2) of a month’s gross rental for less than Twelve {12) months’ lease
  • This Commission shall become payable upon execution of the TA by the Tenant.

    If the lease is terminated due to Diplomatic Clause and that if landlord has spent on commission for the lease, the Tenant shall need to reimburse the Landlord on a pro-rated basis for the unexpired term.

  • 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.