Common Property Transaction FAQ

Frequently Asked Questions 

 

For Lease of Commercial/ Industrial Properties

 

ü  What is a Letter of Intent (LOI)?

It is a letter proposing your intention to rent the apartment and your requirements to the Landlord.  It’s usually prepared by Tenant’s Salesperson.  The requirements will be subject to landlord’s approval.

 

ü  What is Stamp Duty?

Stamp duty is a tax on documents relating to immovable properties, stocks or shares. In the case of Lease/ Tenancy Agreement (TA), the person who lease the property (Tenant or Lessee) is responsible for paying Stamp Duty.

 

It must be paid within 14days after the date of the document is signed in Singapore.   If the document is signed overseas, stamp duty must be paid within 30days after the date of document receipt in Singapore. 

 

It is an offence to use a document which Stamp Duty has not been paid.  There is a severe penalty by IRAS if Stamp Duty is not paid. A stamped document can be admitted as evidence in the court in cases of disagreements.

 

ü  Is there a standard Security Deposit amount?

There is no 'standard'.  The number of months security deposit varies between Landlord.   

 

ü  What is the difference between Novation and Assignment?

They are both ways to transfer one’s interest in a contract to another party. 

 

Novation means one party transfers ALL its obligations and rights under a contract to a third party, with the consent of the original counter-party. Novation requires the consent of all parties (all 3 parties).

 

Assignment of lease agreement is to transfer a commercial property lease between an Outgoing Tenant to a new Incoming Tenant.  The Outgoing Tenant must read through the clauses stated in the Tenancy Agreement to avoid any breach of the terms and the landlord may take action against you or forfeit the lease.

 

Always consult a Lawyer whenever in doubt. 

 

 

 

For Lease of Residential Properties

 

ü  What is a Letter of Intent (LOI)?

It is a letter proposing your intention to rent the apartment and your requirements to the Landlord.  It’s usually prepared by Tenant’s Salesperson.  The requirements will be subject to landlord’s approval.

 

ü  What is ‘White goods’? 

White goods are typically the ‘large’ household appliances such as refrigerators, stoves, oven, microwave, washing machines, air conditioners. 

 

ü  What is a  Diplomatic or Repatriate Clause? 

This clause is to safe guard you if in the event you are no longer employed, or is transferred to other countries.  With this clause, you can terminate the lease after 12 months by giving 2 months notice. Thereafter, the security deposit will be refunded to you.  The Landlord usually allows the Diplomatic clause to be included in the TA if the lease is more than a year.

 

ü  What is a Good Faith Deposit? 

It is a booking deposit.  This deposit will become part of the security deposit after the Tenancy Agreement (TA) is signed.

 

ü  When will I need to sign the Tenancy Agreement (TA) ? 

Once Landlord signs on the LOI, they will prepare a TA.  Any legal fee that is involved will usually be borne by the Tenant.   If Tenant is agreeable with the TA of the Landlord (usually the case), there should not be any legal fee. 

 

ü  As a Tenant, am I responsible for Repairs and Maintenance of the unit?

Usually the Tenant (of a Residential unit) is responsible for repair works not more that $100-$200, unless the repair required is due to your negligence. 

Regular servicing of the air-condition is borne by the Tenant.

 

ü  Why must I pay Stamp Duty?

Stamping of TA is required by the Inland Revenue Authority of Singapore (IRAS).  A stamped TA is considered a valid contract.  The stamp duty is borne by the Tenant. 

 

ü  For HDB Whole Unit rental, what is the maximum Subletting period? 

For SPR and Foreigners (excluding Malaysia), the maximum period allowed per application is 1.5 years or as indicated in the approved letter whichever shorter.  

 

ü  Can I rent a Residential unit for less than 6months?

Under the HDB terms and conditions and URA guidelines for subletting, owners of Private or HDB Flats are not allowed to provide short term sub-letting  (less than 6 months) to tourist or students.   (Source: http://www.ura.gov.sg/uol/media-room/forum-replies/2013/sep/forum13-19.aspx)

 

ü  Do Salespersons collect commission from both Landlord and Tenant in a same property transaction?

Under the Professional Code of Practice of Salespersons:

In a Estate Agents Act, Salesperson (“The Estate Agent”) are not allowed to represent both Landlord and Tenant in the same property transaction as it will create a conflict of interest (no dual representation).  Salesperson will either collect commission from Tenant or the Landlord. 

ü  Some Salesperson tell me this word call ‘Co-broke’ .  What does it mean?

Co-Broke Agreement means both Real Estate Agents share the Landlord’s commission.  This is for the case of rentals above $3800.00.  For rental amounts less than $3800.00, the Tenant’s agent will need to collect commission from the Tenant. 


Disclaimer:  This note is intended to provide general information only.  We do not warrant its accuraccy or completeness or accept any liability for any loss or damage arising from reliance thereon.  

spacer
agent image
agency logo
Teng Yen
Senior Associate Marketing Director
PROPNEX REALTY PTE LTD
tengyen@propertyplace.biz
CEA Licence No.:
L3008022J / R040563B
+(65) 9109 1953