The whole process of renting a property in Singapore, including reading the Tenancy Agreement, can be draining. This is especially if you’re renting for the first time. In this article, we walk you through the 7 common clauses you should pay more attention to before you sign the Tenancy Agreement.
What are the 7 clauses you should note in a Singapore Tenancy Agreement?
1) Security Deposit
When you sign the Tenancy Agreement, you’ll also need to pay the Security Deposit to your landlord.
While there’s no formally stipulated amount to be paid for the Security Deposit, the typical amount is a month’s rent for a 1-year lease, and 2 months’ rent for a 2-year lease.
This Security Deposit is usually used to cover the cost of repairing and replacing damaged items in the property during your stay there. So if you’ve accidentally shattered a mirror, your Security Deposit will be deducted to cover the cost of replacing a new mirror.
Do take note that the Security Deposit does not cover fair wear and tear of items, such as a faded sofa. As such, your Security Deposit shouldn’t be deducted for these items. To avoid any disputes in the future, it’s best to have the Tenancy Agreement declare what the Security Deposit can be used for.
Additionally, the Tenancy Agreement should state when you’ll get your Security Deposit back. In general, you’ll get it back at the end of the tenancy period, minus any deductibles such as damages to the property.
Usually, the contract would state that the Security Deposit will be returned between 7 to 30 days after the end of the tenancy period. This is to give some time for the landlord to assess if any repairs are needed.
2) Rental Payment
One of the most important things you should note in the Tenancy Agreement is the due date for the rental payment, along with the grace period.
Tenancy Agreements in Singapore typically state a grace period of 7 days for late payment. If you only pay after this grace period, your landlord might impose a late payment interest.
In addition, the contract will usually state the mode of payment, such as GIRO or online bank transfer.
If your utility bill is included in the monthly rent, this should also be stated in the Tenancy Agreement.
3) Diplomatic Clause (Early Termination Of Lease) and Reimbursement Clause
The Diplomatic Clause allows the tenant to terminate their contract early without penalty. Depending on what’s specified in the Tenancy Agreement, the notice period is usually 2 months.
This clause is especially important if you’re an expatriate and may get transferred to another country. Do take note, though, that the Diplomatic Clause can only be exercised after 12 months into the rental period.
Let’s say you’re renting the property for 2 years. This means that you can exercise the Diplomatic Clause and terminate the contract without penalty from the second year onwards.
If you choose to have this clause included in your Tenancy Agreement, your landlord will usually request for a Reimbursement Clause to be included in the contract as well.
Under the Reimbursement Clause, you’ll need to reimburse part of the agent’s commission, should the Diplomatic Clause be exercised. Since your landlord will pay his property agent commission for the full duration of the lease, you’ll have to cover part of this cost when you terminate early.
4) Minor Repair Clause
This clause states the maximum amount per item that you’ll have to pay for any minor repairs, with the remaining cost to be covered by your landlord. This amount usually ranges from $150 to $300.
Let’s say that according to the clause, you’re liable to pay up to $150. So if the repair of a leaky pipe costs $180, you’ll have to pay $150 for it, while your landlord will cover the remaining $30.
Here’s a table to illustrate the breakdown of the cost to covered by each party:
|
Item to be repaired
|
Water pipe
|
|
Total cost of repair
|
$180
|
|
Cost to be covered by tenant
|
$150
|
|
Cost to be covered by landlord
|
$180 – $150 = $30
|
Do take note, though, if the damage is caused by your negligence, you’ll need to bear the full cost of the repair.
A related clause that’s advisable to include in your Tenancy Agreement is the Problem-Free Period Clause. Under this clause, you won’t be responsible for any damages found within a stipulated number of days. Typically, this grace period is the first 30 days of moving in to the rental property. This clause is important since it protects you from liability for any damages that might have been caused by the previous tenant.
5) Option To Renew Clause
Essentially, this clause provides you the option to extend your stay at the rental property after your lease has ended. Additionally, this clause will usually state that the new contract will have similar terms and conditions.
Take note, though, that the monthly rent might not remain the same under the renewed contract.
6) En Bloc Clause
In the rare case that the entire building undergoes an en bloc sale, this clause gives the landlord the right to end the lease before it’s due.
If you have this clause included in your Tenancy Agreement, you won’t be able to seek compensation from your landlord. Do ensure that there’s a notice period under this clause.
7) Quiet Enjoyment Clause
This clause ensures that your landlord won’t pop by the property unannounced, protecting your privacy. Under this clause, your landlord will need to get your permission before coming to the property.
In general, the clause lists down the circumstances in which your landlord is allowed to access the property when you’re staying there, such as the following:
- Repairs
- Renovations
- Viewings for potential tenants
Take note that this clause should also state how early your landlord should notify you before coming down to the property, so that he doesn’t show up at the last minute.
What else is in a Tenancy Agreement in Singapore?
Apart from the clauses we’ve just looked at, you can also find the following information in a Tenancy Agreement in Singapore.
- Full name and address of both the landlord and tenant
- Address of the property to be rented
- Date of contract signing
- Tenancy period
- Rental amount, specifying if it includes the utility bill
- Payment schedule and details
- Any applicable fees such as agent commission
- Inventory list of all the items in the rental property, including their condition
- Immigration status of tenant and occupiers
- Tenant’s covenants, such as paying rent, no subletting, and keeping the property in good condition
- Landlord’s covenants, such as providing a property suitable for people to live in
- Notices
- Termination of lease
- Suspension of rent
Singapore Tenancy Agreement templates you can download
To get a better feel of what’s included in a Tenancy Agreement in Singapore, you can download and take a look at the following samples:
- Private property (from the Council of Estate Agencies, CEA, which regulates property agents and salespersons in Singapore)
- HDB flat (from the Consumers Association of Singapore, CASE)
There have been cases where tenants found themselves in trouble because they breached clauses in the Tenancy Agreement. To avoid any misunderstandings and rental disputes with your landlord sometime down the road, you should take some time to understand the clauses in your Tenancy Agreement.
If you’re unsure of any of the Tenancy Agreement clauses, don’t hesitate to clarify them with your landlord or property agent!
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