Renting Guide

Renting Guide

This document explains how to complete the rental process once you havefound a property that you want to rent, and the landlord has verballyaccepted your offer. The formal offer is done in form of a 'Letter ofIntent'. The landlord officially accepts your offer by signing the'Letter of Intent'. Your agent or the landlord's agent will typicallyprepare the necessary documents for the rental.


Rental Documents

Letter of Intent
The'Letter of Intent' is a proposal from you to the landlord to lease theapartment with the conditions set by you. By signing the document thelandlord accepts the conditions, which normally has been agreedverbally beforehand. The tenant typically gives the landlord onemonth's rental as a good faith deposit at this point.

Typically the Letter of Intent specifies the following:

Term of Lease -Usually 12 or 24 months, with optional renewal of another 12 or 24months - but not necessarily with same rent). Also the date when the lease is supposed tostart. Generally, landlords are reluctant to accept leases less than 12months, and when the market is good, they actually prefer to have 24month leases and the tenant may have to pay premium for shorter term lease.

Monthly rental – The 'Letter of Intent' usually only states the amount of rent to be paid.

Good faith deposit –usually one month's rent. Once the landlord signs the Letter of Intentand accepts the deposit, the landlord promises not to lease theapartment to anybody else. When the tenancy agreement is signed, thegood faith deposit will be deducted from the first rental or securitydeposit.

Security deposit – The amount of the securitydeposit is usually stated in the Letter or Intent, but not be payableuntil Tenancy Agreement is signed. The typical security deposit is onemonth's rent for every 12 months of lease. When the lease term ends,the security deposit will then be refunded without interest. However,the landlord reserves the right to deduct from the deposit all costs,damages and expenses arising from the tenant for breaching any of thecovenants stated in the Tenancy Agreement.

Additional requirements –e.g. Diplomatic Clause, Furnishing. The Diplomatic clause is tosafeguard the tenant in the event the tenant is no longer employed.Typically it states that you can terminate the lease after 12 months bygiving 2 months notice. The 'Letter of Intent' may also state that theproperty is leased furnished or partially furnished. You should alsostate in the 'Letter of Intent' if you are planning to sublet any partof the property, or if you plan to have pets in the property. Standardtenancy agreement states that this is subject to landlord's writtenapproval, and you may want to agree this beforehand in order to avoidproblems later.

Expiry of 'Letter of Intent' – The Letterof Intent has a clause that specifies a period which within thelandlord has to sign it, or it otherwise expires. In case of expiry,the landlord has to return the good faith deposit back to theprospective tenant immediately.

Tenancy Agreement
The'Tenancy Agreement' is the binding contract to lease the property. Itwill be signed by both the tenant and the landlord. The 'TenancyAgreement' will state the same things as the 'Letter of Intent', but inmore detail. It is advisable to use the standard tenancy agreementprovided by the agencies as a template. At this point you need tofurnish the landlord with copy of your passport and employment pass orIdentity Card (IC). The landlord will need to check that you areeligible to stay in Singapore as it is illegal for landlords to haveillegal immigrants to stay in their property. Also, normally thesecurity deposit and the first month’s rent is payable at this point,minus the good faith deposit given with the 'Letter of Intent'.

You should check at least the following in the Tenancy Agreement:

Tenant's full details – name, address, ID details

Landlord's full details – name, address, ID details

Payment details - including when the rent is due and how it is to be paid

Security deposit – should be 1 month’s rent for every 12 months of lease term

En-bloc –with Singapore's recent 'enforced block sale' fever, many Landlords areincluding 'en-bloc' clauses to protect them from early terminationcompensation. If you are renting an older block, make sure that eitherthis clause is negotiated out or reduced otherwise you may be lookingat inconvenience and additional costs of moving within the term.

Termination –Typically this includes the Diplomatic Clause on its own, or sometimesaccompanied by a reimbursement clause. The latter states that if youexercise the Diplomatic Clause, you will have to reimburse part of thecommission the landlord had paid to his/her agent - pro-rated to theremainder of the lease term (for example, if you leave 3 months beforethe end of a 24-month lease, you will pay the landlord 3/24 of thecommission he/she paid to the agent). In most cases, the tenancyagreement does not include this in case the landlord sells the propertyduring the lease period. If there is no specific condition for this,the new owner has to honour the existing tenancy agreement. The tenantwill just pay the same rent to the new owner.

You should also changethe standard Tenancy Agreement if you are planning to sublet any partof the property, or if you plan to have pets in the property. Thestandard tenancy agreement states that this is subject to landlord'swritten approval, and you may want to change this at the time ofsigning in order to avoid problems later.

In any case, you shouldnot be afraid of the legalities and your agent can help you to explainall this and negotiate on your behalf. It is still useful to understandthe basic responsibilities, especially as the Singapore law can beconsidered landlord friendly. For example, if the tenant fails onhis/her rental payments, the landlord can get a court order tore-possess the property as well as seize and sell the goods inside theproperty to recover any rent and legal costs from the tenant. This iscontrary to many other countries where it may take years to get rid ofuncooperative tenants – if ever.

Inventory of Contents'Inventory of Contents' is supplementary to the Tenancy Agreement. Itlists all the fittings and furniture that is rented as part of theapartment, as well as their present condition. You will need to sign itwhen you move in. The contents of the property will then be checkedagainst it when you move out. Your agent can help you with checking theinventory and will help you on dealing with the landlord to fix anyproblems.


Moving In

Whenyou move in, you need to inspect the property against the TenancyAgreement and the Inventory of Contents provided by the landlord. Youwill then need to sign the Inventory after the inspection. We wouldadvise you to either take photos of every detail that you think is notin order, or ask the landlord to fix them immediately. This canpotentially avoid a lot of problems when you are moving out.

Also,one of the first things that you need to do is to connect theelectricity and water – these are not typically provided by thelandlord. You need to call SP Services to get them turned on, and youshould do this already before moving in as it can take a couple of days.


Moving Out

Youshould go through the 'Inventory of Contents' and check that everythingis as when you were moving in. Normal wear and tear is acceptable, butany breakages or lost items during the tenancy are payable by thetenant. Also, typically the 'Tenancy Agreement' states that when movingout, the apartment is clean and all air conditioning units has beenserviced.

Remember that the landlord has every right to deductany of the expenses from your deposit – and they may seem sometimesarbitrary. Therefore, we really do recommend that when you move in, youdo a proper inspection and take photographs for evidence to avoid anymisunderstanding. Also, it is usually cheaper for you to fix theproblems than what the landlord might quote (e.g. you may not want topay for getting an electrician to change a light bulb).


Fees and Commission

Agent's Commission

The commission is typically full month's rent for every 12 months oflease. The landlord also pays commission a full month's rent for every12 months of lease. If there are two agents involved, the agents willsplit the landlord's commission based on their mutual agreement.

Stamp Fee
Thetenant will pay for the stamp fee. Usually the tenant will give themoney to the agent and the agent will pay it to the relevant governmentagency (Inland Revenue Authority of Singapore). Stamp Fee is calculatedbased on Annual rent using the following rules:
If the lease term does not exceed 1 year - S$1 for every S$250 or part thereof of annual rent;
If the lease term exceeds 1 year, but does not exceed 3 years - S$2 for every S$250 or part thereof of annual rent;
If the lease term exceeds 3 years, or has any indefinite term - S$4 for every S$250 or part thereof of annual rent.

Example calculation:

Rentis S$4,000/month (S$48,000 annually) – lease term is 24 months: Stampfee payable = S$48,000 / S$250 x S$2 + S$2 (for duplicate copy) = S$386

Check out Inland Revenue of Singapore (IRAS) website for more details -

Utilities Deposit

SingaporePower Services (SP Services) will require you to pay a deposit beforethey will turn on the electricity and water, which you need before youcan move in. The deposit will be reflected in your first bill. Thedeposit currently varies from S$40 to S$800, depending on yourresidency status as well as what kind of property you are renting. Fora foreigner renting a private apartment, the deposit required iscurrently set as S$500. Please check SP Services website for moredetails -

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Christina Lee
Senior Associate Marketing Director
CEA Licence No.:
L3010738A / R004312I
+(65) 9742 1234