Sunday, July 28, 2019

Important Rental Terms

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.

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