Tenancy Agreement in Singapore
So, you’ve found your property agent in Singapore, viewed condominiums for rent, and submitted your Letter of Intent. Now comes the time to sign on the dotted line. Typically, the Landlord or Landlord’s Agent will prepare the Tenancy Agreement, and you and your respective agents will have to sign it. It may seem tedious, but before you put pen to paper, make sure you read through everything thoroughly, and ask your agent to clarify if there is anything that you don’t understand, or isn’t clear.
What needs to be in the Tenancy Agreement?
We’ve seen Tenancy Agreements of varying lengths, but there are a few essential pieces of information which must be included.
- Full name and contact address of the Landlord and his bank account details
- The address of the property which is being rented
- Name and contact address of the Tenant(s)
- The date the tenancy is due to begin
- The duration of the tenancy
- The rental amount, frequency of payments, and method of payment
- Details of any monies received as security
- Any fees to be paid
- The date the agreement is signed
Things to look out for in your Tenancy Agreement
In addition to the above mandatory information, most Tenancy Agreements include clauses relating the right and responsibilities relating to maintenance and any repairs (including air conditioning servicing), payment of utilities, conditions of the security deposit, details of what happens if rent is paid late (or not at all), details of what happens in the event of an early termination.
These are the usual clauses, but there can be many more which can be added! There are a few items which often can be cause for concern or items to negotiate/clarify.
1) The Diplomatic Clause
In a country like Singapore, where people are arriving and leaving all the time, you may find yourself needing to exit your Tenancy Agreement in advance of the full term, to relocate or repatriate. This is where the Diplomatic Clause can be your friend.
The Diplomatic Clause can only be added to Tenancy Agreements of more than 12 months – it’s most commonly found in 2-year leases. This clause allows you to exit the Tenancy Agreement early, if you need to leave Singapore. The Diplomatic Clause can usually only be enacted after a set period, usually 12 months, at which point you can give notice of your intent to leave (Usually a 2 month notice) which makes it a minimum of 14 months. You will then usually agree your move-out date.
Given that the landlord pays his/her agent (the landlords’ agent) the entire commission at the onset of the tenancy (once you sign the tenancy agreement), should you need to terminate the tenancy earlier than planned by exercising the diplomatic clause, the landlord will need to be compensated for that part of the agency commission corresponding to the tenancy period that was voided.
This amount is generally pro-rated depending on the period of lease remaining when you terminate the contract. For example – if you choose to terminate the contract after 12 months with 2 months notice (total 14 months) – the estimated penalty amount would be – 10 / 24 * (your rent per month).
Penalty Amount – (number of remaining months in the lease) / (total lease length) * (your monthly rent)
2) Damages and repairs
This is a standard clause in Tenancy Agreements (and if it isn’t in your, you should ask for it to be put in!). This clause essentially sets out what happens in the event of minor damage, resulting form wear and tear. The clause usually specifies an amount above which the Landlord is responsible for the damages. Below this amount, the Tenant would be required to cover the costs. The threshold amount can vary, but is usually in the region of 150 – 200 SGD.
For a repair that costs SGD 300 the tenant would typically be required to cover the first 150-200 SGD (depending on the contract).
Do note that this clause only covers damage that occurs as a result of wear and tear, or ageing. Damages caused by negligence usually are the responsibility of the Tenant, though you may be able to come to some arrangement with your Landlord on the costs. Large damages, which are not the result of negligence, are usually covered by the Landlord, although it worth having this made explicit in your TA.
We’d also advise you to ensure you have a ‘grace period’ in your TA, to cover you in the event that you discover any damages previously overlooked or done by previous tenants. The ‘grace period’ should usually be 30 days or more.
3) Air-conditioning maintenance
It’s standard in Singapore for the Tenant to bear responsibility for the air-conditioning servicing. This should be carried out every 3 months. Servicing companies in Singapore often offer a 1 or 2-year service package, which often include a yearly chemical clean. It’s important to keep the receipts from your service visits, as many Landlords ask to see them upon the end of the lease.
If you are moving into a new condominium i.e. you are the first tenants to have lived there, you may receive a number of free air-conditioning services, as arranged by the building maintenance. It’s worth checking whether this applies to you, when moving into a brand-new condo.
If you have major problems with your air-conditioning units, which falls outside the standard servicing (e.g. if a unit needs to be replaced), then your Landlord is usually liable for any costs associated.
There is typically a clause which specifies that Aircon repair will be covered by the landlord. It’s worth clarifying with your agent on whether you will be required to pay the first 150-200 dollars (should the aircon stop working).
4) Option to renew
This clause allows you to extend the lease for another term, with 2-month prior notice. If you choose to exercise this clause, then the Landlord will prepare a contract for extension. The terms usually stay the same, unless you specify otherwise. Renewal can be a good opportunity for you to propose different terms, and negotiate your rent (where applicable). Do note that the Landlord is also within their rights to change any terms too!
The option to renew is merely a formality, it does not oblige the landlord to agree with the tenant’s terms and all terms can be negotiated again when renewing a contract.
5) Access to premises
There are usually a series of Access clauses, which allow the Landlord to enter the premise for a stated purpose. This is usually related to any repair work or towards the end of the tenancy, to allow prospective tenants to visit. Towards the end of your tenancy, the Landlord may want to arrange viewings, so as to minimize the period in which the unit is empty. As the sitting tenant, you may wish to include some details, such as timings of viewings, notice required etc.
6) Upon lease termination
When it’s time for you to move out, there are usually a number of clauses which require the sitting tenant to take action. This can include things like dry-cleaning curtains, or arranging a full professional clean of the unit. Make sure you know what your responsibilities are, and what documentary evidence you may need to provide (receipts for cleaning, air-conditioning service records).
What does the Tenancy Agreement typically not contain?
The Tenancy Agreement does not typically contain your requests such as (new TV, furniture, painting etc.) that you might have put forward to the landlord in the letter of Intent. The letter of Intent is in itself a legally binding document and all the requests agreed by the landlord must be completed. They are not required to be repeated in the tenancy agreement.
Your Tenancy Agreement should clearly lay out your responsibilities, and those of the Landlord’s, as well as any conditions. If there is anything that isn’t clear or you aren’t sure about, make sure you talk to your agent.