Wazzup Pilipinas!
Renting a home in Singapore such as renting Woodlands HDB does not have to
be so difficult. But if you are dealing with a certain kind of landlord, it
will be.
It happens that some rental terms frequently confuse tenants who are
looking for a unit or room to rent in Singapore, especially when it is first
time renting. Therefore, before you sign anything make sure you understand
these rental terms. There are six important rental terms.
1. Good faith deposit
The most unluckily named deposit in the rental process.
Because some landlords have no confidence in your seriousness or ability to
rent, they might demand a good faith deposit for booking purpose.
But in all
seriousness, the other reason is that the payment of the good faith deposit
stops the landlord from searching for new tenants. The deposit is valid between
the time that you sign, and the signing of the actual tenancy
agreement.
The good faith deposit is usually needed upon signing the Letter of
Intent (LOI). The standard amount is one month’s rent for each year of the
lease.
2. Letter of Intent (LOI)
The Letter of Intent, or LOI in short, states the
tenant’s interest in renting the unit. Once signed, the good faith deposit or booking
deposit is paid along with it. The LOI is effectively a promise to rent the
unit to that tenant.
The LOI is usually prepared by the tenant’s agent, and
sometimes by the landlord’s agent. One of the advantages is that if there is no
LOI, there is no good faith deposit.
There are tenants who never sign an LOI, as they do not
want to risk losing the good faith deposit if they do not like the TA.
Also, many tenants who do not engage an agent may not
bother drafting the LOI. It is up to you whether you want to go through this
step.
3. Tenancy Agreement (TA)
The TA is a legally
binding contract that sets out the terms and conditions of the lease. The
landlord, or landlord’s agent, will prepare the TA. The TA is supposed to carry the agreed-upon
terms and conditions that were in the LOI, but it is your responsibility to check.
Be cautious of landlords who sneak in new terms and conditions.
Some key things
that are covered under the TA include: the consequences of paying rent after
the due date; acceptable modes of payment and diplomatic clause, which allows
you to break the lease if you lose your employment in Singapore.
4. Security deposit
The security deposit is given to the
landlord, after the TA is signed. It is generally one month for each year of
the lease. The landlord can withhold the security deposit, to pay for any
damages you cause when you move out.
Furthermore, the security deposit can be taken
if you break the terms of the lease. If you unlawfully sublet the unit, the
landlord can kick you out while keeping your deposit. Moreover, any unpaid
rent, or late fees for unpaid rent, can be taken from the security deposit.
5. Tenant’s agent
This is the person who is supposed to be on your side if
you are a tenant. In Singapore, it is illegal for property agents to represent
both the landlord and the tenant in the same deal.
Your agent is supposed to
help you guarantee the LOI and TA are fair, and to help negotiate the price.
For example, your agent should be checking the rental rates of surrounding
properties, to let you know if you are getting a good price.
6. Landlord’s agent
On the other side of the fence is the landlord’s agent.
The landlord’s agent will vet you, and decide if you are eligible to rent to.
They will also try and keep you from negotiating the price down. Note that some
landlords never meet their tenants at all, and will request that you direct all
issues such as a burst kitchen pipe to his/her agent.
Make sure you do not have a problem with your landlord’s agent
as you may be dealing with this person more than the actual landlord. If you are
not happy with this agent’s guts, then look somewhere else.
Ross is known as the Pambansang Blogger ng Pilipinas - An Information and Communication Technology (ICT) Professional by profession and a Social Media Evangelist by heart.
