5 Things to Know Before Renting a Condo in Singapore
By Aaron De Silva
/ EdgeProp |
It’s safe to say that you’re spoilt for choice when it comes to renting a condo in Singapore.
You could opt for a mass-market development in the suburbs that’s close to nature. Maybe you prefer a boutique property that’s right in the heart of the city. Perhaps you have a generous housing allowance that lets you live it up in a prime district luxury property.
Marina One Residences
But before all that happens – before you identify your dream condo – here are some essentials to be mindful of.
State Your Intent
After having viewed a number of condos, you’ll probably have narrowed your options to a few choice units. It sounds obvious, but the apartment you can see yourself living in is the one you should go for.
Time to draft a Letter of Intent (LOI), then. There are numerous templates online, or your agent might have a copy on hand. This formal letter announces your interest in the property.
What’s included in the LOI? Chiefly, the monthly rental amount, amount of security deposit (see next point), tenancy start date, and term of lease. In Singapore, standard leases are 12 or 24 months. The minimum lease is six months; anything less than that is illegal.
Other conditions include things like utility charges, aircon servicing and maintenance, legal and stamp duty costs, provision of furnishing and appliances, and ownership of pets.
If you’re an expat, it’s best that your LOI includes a Diplomatic Clause. This condition allows you to terminate the lease after 12 months, provided you give two months’ notice. It protects you in the event that you have to relocate.
If the landlord agrees to these terms and conditions and puts his/her name on the dotted line, you can take it as an official sign of acceptance.
All In Good Faith
Japan has a custom of key money – a mandatory, nonrefundable payment to landlords that can sometimes amount to six month’s rent or more.
Thankfully that practice doesn’t exist in Singapore. What’s customary here is the good faith deposit – typically a month’s rent for a 12-month lease and two month’s rent for a 24-month lease.
The good faith deposit is either taken as an advance on your rent, or it becomes part of the security deposit once the Tenancy Agreement (TA) is signed. You’ll get your security deposit back when your lease expires.
There are two key things to be aware of here. One, if there is a clause regarding the deduction of your deposit to pay for damages sustained during your tenancy.
Two, practice due diligence. Before transferring the deposit, check to see if your landlord is indeed the owner of the property. You can do so on the IRAS website.
For safety reasons, it’s also best to make a direct, traceable (i.e. electronic or cheque) transfer to the landlord/owner, rather than through a proxy (e.g. the landlord’s agent).
Make A List, Then Check It Twice
The TA should include an appendix listing all the furniture and fittings in the property, as well as the condition they’re in.
Do note that you’re liable for any damages caused to items in this inventory. To avoid potential disputes with your landlord, document everything. Before moving in, take detailed pictures of each room/space in the apartment, as well as the items on the inventory. Make sure that the items are actually there. Then have your landlord sign off on the images.
It’s tedious work, but you’ll be glad you did it.
Who Pays What
Agents’ commissions are not set in stone. However, some general rules apply, depending on the rental amount and lease term.
If the rent is less than $3,500 per month on a 12-month lease, your agent will receive half a month’s rent from you while the landlord will pay the other half to his/her agent.
The figures double if the rent is less than $3,500 per month on a 24-month lease, i.e. both agents receive a month’s rent each in commission.
If the property costs more than $3,500 per month and you’re signing a 12-month lease, your agent will collect half a month’s rent from you. The landlord will pay the same amount to his/her agent. If you don’t have an agent, i.e. you contacted the landlord’s agent directly, then he/she pockets the entire commission.
If you’re signing a 24-month lease for a condo that costs more than $3,500 per month, good news: you don’t have to fork out anything. The landlord is the one that has to stump up the cash. If you don’t have an agent, the landlord’s agent keeps the commission. If you do, the agents typically split the commission 50-50.
The End
If you had chosen the option to renew the lease upon expiration in your LOI, then go ahead and exercise that right. However, you may have to give your landlord two or three month’s advance notice if you wish to do so.
The rent, of course, is subject to prevailing market rates, and the landlord reserves the right to change it.
Ready to take the plunge? Search for Singapore condos to rent here
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