Commission is an amount that
is mutually agreed upon between the Property agent and his/her customer.
It’s important to understand
that Commission is a variable factor and can change depending upon various
factors.
Agents can charge higher
commissions and there is no restriction or regulation on the amount of commission
that a property agent should charge his/her customer.
There are no industry
standard commission rates nor is there any board which determines the amount which
Agents can charge.
Dual representation is not allowed as per the
law
Agents charge commission
based on
-Their
experience, position and performance. Top agents charge a higher commission but
they also are in a position to ensure a good service based on their previous
performances. They sometimes work in a team and the customer has an advantage
of many people working for his interests if he hires the agent.
-Commission rates
may also vary depending upon situational factors such as the urgency,
complexity of the deals and the time taken.
-Commission
depends upon market dynamics as well, in a Buyers market, the agent can ask for
a higher commission from the Seller as it becomes challenging to get the seller
the price he wants within a stipulated time and vice versa.
Although, there are no
stipulated commission rate sheets in Singapore.
Based on my dealings in the
market, the commission rates usually charged by agents are: -
INCASE OF RENTAL DEALS
FOR PRIVATE PROPERTY
For the rental amount above $3500
Scenario 1 – Only one Agent
(Landlord’s Agent)
-For the rental
amount above $3500 & a 2-year lease – landlord pays 1 month’s rental plus
GST.
And
in a 1 year lease, he pays half a month’s rent as commission plus GST to his
agent.
If
the tenant has contacted the Landlord’s Agent directly, the landlord pays
his
Agent commission, which he/she keeps. The tenant pays no
commission.
Scenario 2 – Two Agents
(Landlord’s Agent & Tenant’s Agent)
-In the above
$3500 rent segment, incase, the Tenant has used the services of an agent; who
assisted the tenant and represent his interests. The Landlord’s appointed agent
will share the commission given to him by the Landlord with the Tenant’s agent
provided the tenant signs a 2 year lease. If incase, the tenant signs a 1 year
lease, he needs to pay his agent the commission.
Hence,
some agents ask the tenants to sign a 2 year lease as they don’t need to pay
agent’s commission plus they can lock the house for a period of 2 years on the
same rental amount.
We highly recommend a 2 year’s lease if
employment conditions are long term in Singapore.
For the rental amount at $3500 or below
It’s each to his own, The Landlord’s
Agent collects a one-month commission from the landlord & the tenant’s
agent collects a one-month commission from the tenant. If the tenant contact’s
the landlord’s agent directly, the tenant doesn’t pay any commission as dual
representation is not allowed.
However, there have been
cases wherein an Agent has advertised for the Landlord, but he informs the tenant
in advance that the Landlord is not paying him any commission and he will be
collecting the commission from the tenant. If the information is received in
advance and the tenant is okay with the house, he can still proceed with the
deal as it is not dual representation. In this case, the tenant pay’s the
Landlord’s agent Commission, although he approached him directly.
FOR HDB PROPERTY
It’s each to his own, The Landlord’s
Agent collects a one-month commission from the landlord & the tenant’s
agent collects a one-month commission from the tenant. If the tenant contact’s
the landlord’s agent directly, the tenant doesn’t pay any commission as dual
representation is not allowed.
There are NO FIXED RULES OR
REGULATIONS.
Please remember that these
are market practices, there is no hard and fast rule.
There are exceptions which include:
-Cases where the
property is in high demand, the landlord’s agent may not co-broke as he doesn’t
feel the need to share the commission”.
-In some cases,
like room rentals, the Agent has advertised for the Landlord, but he informs
the tenant in advance that the Landlord is not paying him any commission and he
will be collecting the commission from the tenant. If the information is
received in advance and the tenant is okay with the house, he can still proceed
with the deal as it is not dual representation. In this case, the tenant pay’s
the Landlord’s agent Commission, although he approached him directly & even
though he may be marketing the property on the landlord’s behalf. Technically,
they would be switching roles to become the tenant’s agent and should be acting
in the tenant’s best interest.
THE DYNAMICS OF DEMAND AND SUPPLY & SHIFTING TRENDS IN THE SINGAPORE RENTAL MARKET Singapore has been declared as one of Asia’s most expensive cities. Not only the property market but also the job market is going through a slump here. It’s common news that the Oil & gas sector has been affected due to the global crude oil crisis. Demand for fuels is recovering in some countries, and that could help crude oil prices recover in the next year or two meanwhile as the market faces a slump we also see other sectors being affected. Banking & Finance sector has been affected in Singapore as well. People have become more cautious and have changed buying trends due to which even Consumer Durables sector has been affected. This wave has caused a fracas. Demand – Supply As lesser jobs are generated there is a lesser influx of expatriates migrating to Singapore which has caused a fluctuation in demand and supply. There’s also the fact that expatriates whose jobs have been affected have also moved out of Singapore. This has led to an increase in supply of houses and lesser demand for them, thereby reducing the house rents. Adding to this is the chain of stringent cooling measures by the Singapore Government to avoid a Property Bubble here which imposes a lot of restrictions in the rental market in the HDB arena. The Government also imposed a quota system for house rentals in the HDB sector with effect from 16th January 2014. This quota system was introduced after the riots in Little India to help maintain a good ethnic mix in HDB estates. HDB said the measure "is to prevent the formation of foreigner enclaves in HDB estates, and maintain the Singaporean character of our HDB heartland". Malaysians are not subject to this quota in view of their close cultural and historical similarities with Singaporeans. The quota is set at 8% at the neighbourhood level and 11% at the block level, and applicable if any subtenant renting the whole flat is a non-Malaysian non-citizen. If the quota is reached, only Singaporeans and Malaysians can rent a flat in that neighborhood/block. Information on the quota allotment is available on HDB's website, It is updated on the first of every month and is valid for the whole month. It changes every month depending on transactions during the month. Click here to check the quota. This policy has worked as a deterrent in renting HDB flats. SHIFTING RENTAL TRENDS The influx of new private property units in the market has also led to a fall in the rental price of private properties. As actively practicing property agents, we (DreamHomes) see a shift in renting trends where expatriates who used to earlier prefer to rent HDB homes are now choosing condominium units instead. The gap between the rental prices of HDB units and Older Private property units has narrowed quite a bit, making condominium units which come with facilities more affordable and reachable to new expatriates. The dynamics of demand and supply have largely impacted the market and it’s effects can be seen. It looks like this slump may be here to stay for a while unless there’s a drastic change in the market dynamics or economic policies.
My Article was published on 3rd April 2016 @ Propertyguru, Singapore's most popular real estate website which enjoys a high viewership in Singapore and abroad. It's a proud moment for me.
Demand for private rental units has increased of late, but so has supply. Here’s how to spruce up your condo and set it apart from the competition.
1. Before you can rent out your condo, consider all the pros, cons and legal implications of being a landlord. What are the rules and regulations regarding renting out your condo? Do you need permission from condo management? It is advisable to engage a property agent to help you perform background checks on potential tenants, as well as to draw up legally binding tenancy agreements. Once you have spoken to your agent and assessed all the factors involved, you can proceed with the rest of the rental process.
2. Prior to your tenant’s arrival, inspect your entire home thoroughly to see if there are any defects. If there are, be sure to repair them as soon as possible. Problems such as leaky faucets or pipes, cracked tiles, faulty plumbing, exposed electrical wiring, burnt-out lights and so on should be fixed in advance, so your tenant feels confident and at ease upon moving in.
3. Apart from ensuring everything in your home is in working order, remember that safety is also of utmost importance. This is especially so for the room in which your tenant will be sleeping, so do see to it that features like smoke detectors and electrical wiring are working as they should be, and that no part of your house poses any safety hazard. Installing fire extinguishers in your home is a good idea, as is making sure all your kitchen appliances are in good condition.
4. It has been said that cleanliness is next to godliness, and rarely is this truer than when opening your home to someone. It is important to make your tenant as comfortable as possible, and keeping your home clean is quite possibly the best way to do so. A dirty house is an instant turn-off, so be sure to keep floors and carpets free from dust and dirt, and repaint your walls if you must. Appliances and fixtures should remain grime-free; disinfectant wipes and sprays, as well as home fragrances, work well to keep dirt and odours at bay.
HOW TO CHECK THE RENTAL QUOTA Non-Citizen (NC) Subletting Quota
for the Subletting of Whole Flat Jan20,2014
With effect from 16 Jan 2014,
owners will have to consider the NC quota if one of the subtenants is a
non-Malaysian non-citizen (i.e. SPRs and foreigners, excluding Malaysians for
both groups).
Malaysians will not be subject to
the NC subletting quota in view of their close cultural and historical
similarities with Singaporeans.
The quota ensures that
non-citizens can better integrate into the local community for social
cohesion and prevents the formation of foreigner enclaves in public housing
estates.
The quota will apply as long as one
of the subtenants is a non-Malaysian NC.
How the NC Subletting Quota Works
The NC quota at the neighborhood
and block level is shown in the table below:
Maximum Proportion of Flats that can be Sublet to
Non-Malaysian NC Subtenants
Neighbourhood
Block
8%
11%
When the NC quota has reached the
block and/or neighborhood limits, flat owners will only be allowed to sublet
the flat to Singaporean or Malaysian subtenants.
You
can check the subtenant's eligibility to rent a flat in any block by clicking
on the link below which leads to the free E-service on the HDB website.
I would suggest that every agent
representing the landlord must check the eligibility from the HDB website
before he advertises the flat for rent and mention the status accordingly in
his advertisement to make it easier for co-broke agents representing tenants to
approach for the purpose of rental.
It’s important to remember that this quota changes
on the first of every month depending on the transactions that have taken place
during the month. So, it’s important to check the quota again in the following
month if the house is still available for the purpose of rental.
Once the house is finalized, the next thing the agent’s talk
about is PUB. PUB simply stands for The Public Utilities Board.
Transfer of Utilities i.e. Electricity and water connections
need to be arranged by the Tenant, as Landlords will not usually provide this.
In Singapore, you need to pay for your own utilities.
Many people ask me how
much the utility bills work up to. This is something no one can guide you on as
it completely depends on your usage.
You can do this prior to moving in, by calling SP Services.
These connection processes can take up to a few days to be ready. If you do it
at the last minute, you may need to pay Express charges.
You have to fill this form within 15 minutes otherwise you’ll
have to do it all over again.
CITY GAS (PIPED GAS)
Many residences in Singapore use Gas Cylinder but a lot of
properties are using Piped gas as well. Check with your owner/agent what gas
services are being provided in the house.
If the property you are renting has piped gas, you need to
contact City Gas to install the gas.
As for telephone
lines, Singapore Telecom will connect residential lines upon your request. In
Singapore, there are cable television and cable broadband Internet.
These companies have various packages that are suitable to
your own usage and even offer bundle deals. Sometimes, your agents have contacts with the
agents who work for these cable packages and they may be able to help you to
connect and avail of these services sitting in the comforts of your home.
I hope this information is useful to people migrating into Singapore.
CONSERVATION OF
ELECTRICITY & WATER
Refer to these wonderful tips on conservation of electricity
& water
A Novation document may be executed in a situation where an existing tenant assigns all the tenancy rights to an incoming tenant.
An Assignment of Lease may be executed in a situation where an existing landlord assigns all the tenancy rights to the new owner who has purchased the property subject to tenancy.
BASIC REQUIREMENTS FOR A NOVATION
-A novation requires a valid previous contract
-Mutual agreement of all the parties to the contract, and the termination of the original
contract or discharge of the original parties before the substitution of a new contract
and/or parties to it, respectively.
-A novation could arise when one party is experiencing financial or operating difficulty
in a real estate transaction.
STAMP DUTY
The Novation / Assignment of Lease document needs to be stamped. The stamp duty rates will depend on the terms stated in the document.
What are the stamp duty rates and how to compute?
STAMP DUTY RATES
Stamp duty payable on Novation / Assignment to Lease will depend on the terms stated in the document.
As announced in Budget 2011, fixed duty has been removed for most documents executed on and after 19 February 2011.
If the document is executed before 19 February 2011, fixed duty remains payable.
DUTY – Novation (Tenant)
Novation involving an incoming tenant and outgoing tenant where no consideration is paid
$10 for document executed before 19 February 2011.
Duty is removed for document executed on and after 19 February 2011.
DUTY – Assignment of Lease (Landlord)
Assignment of lease involving an outgoing landlord and an incoming new owner / landlord who has purchased the property subject to tenancy
$10 for document executed before 19 February 2011.
Duty is removed for document executed on and after 19 February 2011.
FULL DUTY
Novation involving an outgoing tenant and an incoming new tenant where consideration is paid, stamp duty will be based on the consideration.
Based on the consideration
- Every $100 or part thereof of the first $180,000
$1.00
- Every $100 or part thereof of the next $180,000
$2.00
- Thereafter, every $100 or part thereof
$3.00
DUTY ON DUPLICATE
Duty on duplicate is $2. This additional amount will be added to the stamp duty payable.
As announced in Budget 2011,
Duty on duplicate document executed on and after 19 February 2011 has been removed.
If the document is executed before 19 February 2011, duty on duplicate remains payable.
HOW TO COMPUTE?
An example on the computation of stamp duty on consideration or premium paid for a document relating to Novation / Assignment of Lease is as follows:
If the consideration / premium of $284,000 is paid, what is the stamp duty?
DIFFERENCE BETWEEN A DIPLOMATIC CLAUSE AND AN EXIT CLAUSE Most people confuse themselves between a Diplomatic Clause and an Exit Clause, this is what we found while practicing as agents. Here is the difference for all of you'll to understand. Tenants often misunderstand the diplomatic clause and think that they can break their lease by giving a two-month notice (for whatever reason) at the end of the lease period.
DIPLOMATIC CLAUSE
This clause is to safe guard the tenants, If in the event you are no longer employed, transferred to other countries, you can terminate the lease after 12 months by giving 2 months notice. So, on a two-year lease, the tenant can give a two-month notice after twelve months, thereby taking it up to a minimum stay of 14 months. Proof of such transfer or cessation must be shown to the Landlord.
A letter from the company is sometimes not enough and you may need to show a letter from the immigration regarding the cancellation of your pass. Thereafter, the security deposit will be refunded to you.
All this depends on your relationship with your landlord. Hence, we as agents always advice to keep cordial relations with your landlord or his representatives.
In Singapore, the diplomatic clause can be included only if the lease is more than a year. If in case this clause has to be included in a one year lease then you have to speak to your agent and get it done with a mutual consent between the landlord and the tenant through the agents and in the absence of agents between the parties in itself.
Usually landlord's are reluctant to include this clause in a one year lease as landlords feel very insecure of tenants using the premises for a short term only.
Private residential properties or the rooms within their premises should not be rented out on a short-term basis for less than six months on a daily/weekly/monthly basis. This is an offence in Singapore so no contracts can be below six months.
It may be possible to include a six-month diplomatic clause in a one-year lease (with an additional two-month notice period) but this isn’t always an attractive option for a Landlord, especially in a declining market. The owner may wonder if you are on the way out from your job, and decline the tenancy agreement completely.
Be very careful to specify whether the diplomatic clause is carried over if you renew or extend the lease.
Reimbursement Clause
In a standard Singapore Tenancy Agreement, there is usually the reimbursement clause together with the diplomatic clause. This clause states that if you exercise the diplomatic clause, you will have to reimburse part of the commission the landlord had paid to his agent.
The reason behind this clause is that the landlord had paid the full one month's agent commission for a 2 years lease but if you terminate the lease by exercising the diplomatic clause, hence unable to complete the full 2 years, you will have to refund the pro-rata commission. Since landlord grants the diplomatic clause, they will usually demand reimbursement clause to be included in the tenancy agreement.
Example of the Diplomatic Clause
a. If any anytime after
the expiration of twelve (12) months from the date of the commencement of this
tenancy, the immediate occupant of the said premises
(Passport No. :________________ FIN No. :
__________________ ) shall be :
I.assigned,
posted, transferred or relocated from Singapore to another country on a permanent basis;
II. required
by the relevant authorities to leave Singapore or is otherwise incapable of
working or residing in Singapore; or
III.no
longer employed by the Tenant for any reason whatsoever,
The
Tenant may terminate this Agreement by giving the Landlord not less than two
(2) months’
notice in writing (this is in addition to the completion of the
initial twelve (12) months lease aforesaid)
or paying TWO (2) MONTHS’ rent
in lieu of such notice. Proof of such transfer or cessation
must be shown to
the Landlord. In such event, the Tenant shall hand over the premises before the
expiry of the said notice without prejudiced to the rights of the Landlord at law and equity to
damages, compensation and consequential losses arising from
the Tenant’s said
repudiation. (Reimbursement Clause)- The Tenant shall also undertake to reimburse to
the
Landlord on a pro-rata basis calculated by reference to the unexpired term
of the lease period the brokerage paid by the Landlord to his Agent for
procuring the Tenant.
*Death may be included too as this does not automatically terminate the contract.
EXIT CLAUSE / ESCAPE CLAUSE
The Exit Clause is also known as the Escape Clause. This clause is not part of the Standard Tenancy Agreement here in Singapore.
It is usually added in the Tenancy Agreement in case of a special request from the tenant. Sometimes the tenant may have an idea to migrate overseas or buy his own property and may not be able to commit for a longer term.
We always advice tenants to be honest about their intentions and inform the agents of their intentions well in advance so as to safeguard themselves from financial losses or bitterness in the relationship with the landlord.
If in case this clause has to be included, then you have to speak to your agent and get it done with a mutual consent between the landlord and the tenant through the agents and in the absence of agents between the parties in itself.
Usually landlord's are reluctant to include this clause in a one year lease as landlords feel very insecure about tenants using the premises for a short term only or as a stop gap arrangement.
If in case an exit clause is added then it is usually accompanied by the reimbursement clause as well. This clause states that if you exercise the Exit clause, you will have to reimburse part of the commission the landlord had paid to his agent.
The reason behind this clause is that the landlord had paid his agent the commission for a 1 year / 2 years lease but if you terminate the lease by exercising the exit clause, you are unable to complete the full term of your contract, hence, you will have to refund the pro-rata commission. Since landlord grants the exit clause, they will usually demand reimbursement clause to be included in the tenancy agreement.
Example of the Exit Clause
b. If any anytime after
the expiration of twelve (12) months
from the date of the commencement of this tenancy, the immediate occupant of
the said premises
(Passport No. :________________ FIN No. :
__________________ ) may terminate this
Agreement by giving the Landlord not less than two (2) months’ notice in
writing (this is in addition to the completion of the initial twelve (12)
months lease aforesaid) or paying TWO (2) MONTHS’ rent in lieu of such
notice. (Reimbursement Clause)-The Tenant shall also undertake to reimburse to the Landlord on a
pro-rata basis calculated by reference to the unexpired term of the lease
period the brokerage paid by the Landlord to his Agent for procuring the
Tenant.
Both these clauses are for the welfare of the tenant. If in case the tenants are honest and inform this at the time of renting the unit and it is agreed upon by the landlord, then, at the time of exit, the tenant does not have to bear much financial losses and can leave on a good note.
Clarity also ensures that the approach of the landlord is quite understanding at the time of the departure of the tenant as he is aware of the situation and this will enable him to have a better understanding with future tenants with similar needs. "HONESTY IS THE BEST POLICY"
HOW TO CHECK THE OWNERSHIP OF A PROPERTY HDB / PRIVATE FOR LANDLORD & TENANT HDB HDB's Approval Needed To Rent Out the Whole Flat
An HDB owner can rent out his whole flat only after he has obtained a written approval from HDB. Hence, you may request the flat owner to show you a copy of the approval letter to rent out their flat, as obtained from HDB. In addition, to protect your interest, you are advised to include a condition in the subletting contract, specifying that the validity of the contract is subject to the flat owner obtaining HDB's approval for subletting. Landlords : Kindly click on the below link, to know how to get your HDB Home approved for rental purpose. http://dreamhomeforu.blogspot.sg/2010/07/how-to-get-your-home-approved-for-rent.html
Proof of Ownership of the Flat
You are advised to visit the flat you would be renting and to ensure that the person you are dealing with is the rightful owner of the flat. You can do so by requesting for documentary proof of flat ownership which includes the Agreement for Lease, Service & Conservancy charges booklet, Annual or Loan instalment payment booklet/Annual Loan statements, bearing the name of the flat owner. HOW TO OBTAIN OWNERSHIP PROOF (HDB)
1)For HDB flats please login to www.hdb.gov.sg and go to "MY HDB Page" use the Owner's IC and Sing Pass Number to check the Flat details.
(The Owners Singpass is a confidential number and he cannot pass it to others, so this has to be done by the owner himself), he can take the print out of the same to show as proof or a screenshot and forward the same to his agent for the buyers / tenants perusal.
2)Any HDB Letter under the particular property to show as proof.
3)Town Council A/C Statement Book (Service and conservancy charges ("S & CC") statement before you commit to the purchase, all the name(s) of the legal owner(s) are stated in the there.)
Kindly consult your property agent, and he/she will guide you about the same. He/she can arrange to get the documents from the Owner.
HOW TO OBTAIN OWNERSHIP PROOF FOR HDB & PRIVATE PROPERTIES
The other way to verify the ownership is
1)You can go to the INLIS (Integrated Land Information Service) website and generate the information – Kindly click on the link below and follow through.
This provides basic information on registered ownership as at the date of search.
(NB: It does not include information on instruments pending registration which may affect
ownership.)
To access this information you need to pay a fee of $5.25,
2)You can go the IRAS (Inland revenue Authority of Singapore) website and generate the information – Kindly click on the link below and follow through.
To access this information you need to pay a fee of $2.50
Both the websites are government websites and it is absolutely safe to make a payment using your Master/visa or Cashcard as per the payment modes available.
They allow you to see, save and print the information only once.
This is confidential information.
PLEASE NOTE : If you don’t save it or print it, you will have to make payment again to access the information.
REGISTER YOUR TENANTS IF YOU ARE SUBLETTING YOUR HDB FLAT / ROOMS
Owners who sublet their HDB flat /rooms have to register their tenants with HDB within seven days from the commencement of lease agreement.
This is a new rule set by HDB to support of Ministry of Home Affairs (MHA)’s on-going effort to curb illegal money lending activities, and to protect the HDB residents. Some ex-owners (borrowers from loan sharks) use their old address to borrow from loan sharks while at the same time renting a room at another place without updating their new address on their NRIC. As a result, the new owners will be harassed by the loan sharks while the borrower is not traceable.
The new rule will apply to all new and existing cases of room rentals. For lease started before 1 Feb 2010, the owners are given 6 months to register their tenant’s particulars and for new cases of subletting from 1 Feb 2010, owners are given seven days from the commencement of lease agreement to register their tenant’s particulars.Owners can go online to HDB website or go to their respective branch office to register.
PENALTY FOR NOT COMPLYING
For owners who does not comply to the new rule, a penalty of $3,000 will be imposed. For repeat offenders, HDB may compulsorily acquire their flats.
HOW TO REGISTER YOUR TENANT
You may register your tenant via HDB website under e-services.
Immigration status of non-citizen subtenants may be verified using the Immigration & Checkpoints Authority's VERIFI website.
HOW CAN THE TENANT CHECK WHETHER HE IS REGISTERED WITH HDB
The tenant can request from the landlord a copy of the Letter of Approval for subletting from HDB. The Letter of Approval from HDB requires tenant particulars to be entered into the system while applying for the approval.
HDB flats sold under the Home Ownership Scheme are meant for owner-occupation by the owners and their families. However, flat owners may sublet their whole flat or spare rooms if they meet the eligibility conditions.
To sublet the whole flat, prior approval from HDB is needed. For subletting of rooms, no approval from HDB is required but flat owners must continue to live in the flat during the period of subletting and comply with other subletting conditions.
To avoid committing the offence of harbouring immigration offenders, we advise flat owners to check and ensure that their foreign subtenants are legally allowed to stay in Singapore when subletting their whole flat or rooms.
This service package provides information on subletting of whole HDB flats and rooms. It also allows flat owners to submit online applications for transactions relating to subletting of HDB flats and requests to check foreign subtenants' immigration and employment status.
HDB owners who wish to sublet their flats are required to submit an application to HDB for approval. For subletting under the two categories below, application must be submitted online by clicking here
Category K – Flat owners who have occupied their non-subsidized flat (flat purchased from the open market without a CPF housing grant) for at least 3 years;
Category L – Flat owners who have occupied their subsidized flat (flat purchased directly from the HDB or from the open market with a CPF housing grant) for at least 5 years.
However, this does not apply to cases where owners are overseas and their Attorney is submitting the subletting application on their behalf. For these cases, the Attorney is required to submit the application personally to the HDB Branch Office managing the flat (for the appointment of an Attorney, owners have to consult their own solicitors).
Applications for subletting of flat under other categories may be submitted online or personally to the HDB Branch Office managing the flat.
Regardless of the mode of submission, the applications must be submitted together with the required supporting documents (e.g. Doctor’s certification of illness, Power of Attorney).
Under the Broadcasting Act (Cap. 28), it is an offence to have a TV set at your home without a valid TV License.
Authorized licensing officers would be conducting checks on properties with no TV License. A fine of S$200 shall be imposed if a TV set is found at your home during inspection.
The $110 TV License is valid for 1 year only and expires on 31 December.
You will need a separate TV License for each property.
You just need one TV License regardless of the number of TV sets or TV-enabled equipment at home.
Your TV License is not transferable. If you have sold or vacated your property, please cancel your TV License and re-apply for a new TV License for your new property.
You can apply and pay for a new TV license via MDA Online with your SingPass. Alternatively you may also apply and pay for a license at any post office with your identity card or passport.
The TV license for a household is valid for one year from 1 January to 31 December at an annual license fee of S$110. If you apply for your TV license after 1 January, the license fee will be pro-rated. Regardless of the number of TV sets or TV-enabled equipment in a home, a TV Licensee only needs to pay for one license.
If you are applying for TV license on behalf of another person, please submit your application request through MDA Online with the following documents:
1) Authorization letter signed by applicant with contact details of both applicant and the authorized personnel
2) Copy of NRIC (or other ID like passport/employment pass etc) of applicant
3) Copy of NRIC (or other ID like passport/employment pass etc) of authorized personnel
For more information, please visit the FAQ section at MDA Online or call the MDA Customer Service Hotline at 1800 478 5478.
Incase of Tenancy
In case of Tenancy, The TV license is paid by the Tenant annually once. Sometimes, landlords may waive off and pay themselves (this is rare & an act of kindness) but rightfully speaking TV license must be borne by the tenant. The simple rule is “the one who uses the TV pays”.
This document explains how to complete the rental process once you have found a property that you want to rent, and the landlord has verbally accepted your offer. The formal offer is done in form of a 'Letter of Intent'. The landlord officially accepts your offer by signing the 'Letter of Intent'. Your agent or the landlord's agent will typically prepare the necessary documents for the rental.
Procedures for renting/leasing Basically, you need only to follow through three steps:
Select a professional Real Estate Agent
A professional agent will assist you source for the right property at the best possible price and the location you wanted. He/she will bring you through the tedious process where you will avoid any unpleasant situations due to unfamiliarity of real estate transactions.
Budget and location
Have some basic answers before commencement of search.
What is your budget?
Where do you want to live?
How do you commute to work?
How long are you prepared to take your traveling time from your home to your workplace?
What is the size and what type of property?
What are the facilities and amenities you want?
Do you need unfurnished/partial/fully furnished apartment?
Various documentation
After you have selected your ideal property and you will need to prepare the following documents:
a. Photocopied passport
b. Photocopied employment pass
c. One month’s rental as good faith deposit when making an offer to lease to the landlord
Your agent will then prepare the necessary documents for you such as Letter of Intent and Tenancy Agreement. Letter of Intent (LOI) is a letter proposing your intention to lease the property. It will also state your requirements to the Landlord for their consideration and acceptance.
Rental Documents
Letter of Intent The 'Letter of Intent' is a proposal from you to the landlord to lease the apartment with the conditions set by you. By signing the document the landlord accepts the conditions, which normally has been agreed verbally beforehand. The tenant typically gives the landlord one month's rental as a good faith deposit at this point.
Typically the Letter of Intent specifies the following:
Term of Lease - Usually 12 or 24 months, with optional renewal of another 12 or 24 months - but not necessarily with same rent). Also the date when the lease is supposed to start. Generally, landlords are reluctant to accept leases less than 12 months, and when the market is good, they actually prefer to have 24 month leases and the tenant may have to pay premium for shorter term lease.
Monthly rental – The 'Letter of Intent' usually only states the amount of rent to be paid.Typically the Letter of Intent specifies the following:
Term of lease-usually 12 or 24 months with optional renewal of another 12 or 24 months subject to agreement by both landlord & tenant.
Good faith deposit – usually one month's rent. Once the landlord signs the Letter of Intent and accepts the deposit, the landlord promises not to lease the apartment to anybody else. When the tenancy agreement is signed, the good faith deposit will be deducted from the first rental or security deposit.
Security deposit Security deposit is one month’s rent for every 12 months of lease. When the lease term ends, the security deposit will then be refunded without interest. The amount of the security deposit is usually stated in the Letter or Intent, but not be payable until Tenancy Agreement is signed.However the landlord reserves the right to deduct from the deposit all costs, damages and expenses arising from the tenant breaching any of the covenants stated in the Tenancy Agreement.
Diplomatic Clause/termination clause
·If the tenant’s employment is ceased or he is transferred to another country officially
This clause is to safe-guard you in the event that your employment is ceased or you are transferred to another country such that you can terminate the lease after 12 months by giving 2 months notice. Thereafter, the security deposit will be refunded to you.
Other points
·The 'Letter of Intent' may also state that the property is leased furnished or partially furnished. Ensure that all your requirements and requests are clearly stated in the Letter of Intent example such as request for a new sofa, new bed or unfurnished. After the landlord has signed the Letter of Intent, he is bound by the Letter to provide you the requests.
·You should also state in the 'Letter of Intent' if you are planning to sublet any part of the property, or if you plan to have pets in the property.
·Standard tenancy agreement states that this is subject to landlord's written approval, and you may want to agree this beforehand in order to avoid problems later.
·Please note that most landlords will only include the diplomatic clause if the lease is more than one year.
·Sometimes it is accompanied by a reimbursement clause, this means that the LOI states that if you exercise the Diplomatic clause, you will have to reimburse part of the commission the landlord has paid to his/her agent pro-rated to the remainder of the lease term.
Example:-
If you have 6 months lease left out of a 12-month lease, you will pay the Landlord 6/12 of the commission he/she paid to the agent.
·In most cases the tenancy does not include in case landlord sells the property during the lease period. If there is no specific condition for this, the new owner has to honor the existing tenancy agreement. The tenant will just pay the rent to the new owner.
Expiry of Letter of Intent The Letter of Intent has a clause that specifies a period which within the landlord has to sign it or it otherwise expires. In case of expiry, the landlord has to return the good faith deposit back to the prospective tenant immediately.
En-bloc - with Singapore's recent 'enforced block sale' fever, many Landlords are including 'en-bloc' clauses to protect them from early termination compensation. If you are renting an older block, make sure that either this clause is negotiated out or reduced otherwise you may be looking at inconvenience and additional costs of moving within the term.
Tenancy Agreement The 'Tenancy Agreement' is the binding contract to lease the property. It will be signed by both the tenant and the landlord. The 'Tenancy Agreement' will state the same things as the 'Letter of Intent', but in more detail. It is advisable to use the standard tenancy agreement provided by the agencies as a template. At this point you need to furnish the landlord with copy of your passport and employment pass or Identity Card (IC). The landlord will need to check that you are eligible to stay in Singapore as it is illegal for landlords to have illegal immigrants to stay in their property. Also, normally the security deposit and the first month’s rent is payable at this point, minus the good faith deposit given with the 'Letter of Intent'.
You will need to prepare the rest of the security deposit upon signing of Tenancy Agreement.
For one year lease – 1 month security deposit which is equivalent to one month rental value.
For two years lease – 2 months security deposit which is equivalent to two months rental value.
You should check at least the following in the Tenancy Agreement:
Tenant's full details – name, address, ID details
Landlord's full details – name, address, ID details
Payment details - including when the rent is due and how it is to be paid
Security deposit – should be 1 month’s rent for every 12 months of lease term
Stamp Fee The tenant will pay the stamp fee. The stamp fee is paid to relevant government agency (Inland Revenue Authority). Please seek your agent for exact amount.
More about Stamp fee below
Inventory of Contents
'Inventory of Contents' is supplementary to the Tenancy Agreement. It lists all the fittings and furniture that is rented as part of the apartment, as well as their present condition. You will need to sign it when you move in. The contents of the property will then be checked against it when you move out. Your agent can help you with checking the inventory and will help you on dealing with the landlord to fix any problems.
Moving In
When you move in, you need to inspect the property against the Tenancy Agreement and the Inventory of Contents provided by the landlord. You will then need to sign the Inventory after the inspection. We would advise you to either take photos of every detail that you think is not in order, or ask the landlord to fix them immediately. This can potentially avoid a lot of problems when you are moving out.
Also, one of the first things that you need to do is to connect the electricity and water – these are not typically provided by the landlord. You need to call SP Services to get them turned on, and you should do this already before moving in as it can take a couple of days.
Moving Out
You should go through the 'Inventory of Contents' and check that everything is as when you were moving in. Normal wear and tear is acceptable, but any breakages or lost items during the tenancy are payable by the tenant. Also, typically the 'Tenancy Agreement' states that when moving out, the apartment is clean and all air conditioning units has been serviced.
Remember that the landlord has every right to deduct any of the expenses from your deposit – and they may seem sometimes arbitrary. Therefore, we really do recommend that when you move in, you do a proper inspection and take photographs for evidence to avoid any misunderstanding. Also, it is usually cheaper for you to fix the problems than what the landlord might quote (e.g. you may not want to pay for getting an electrician to change a light bulb).
Termination
Typically this includes the Diplomatic Clause on its own, or sometimes accompanied by a reimbursement clause. The latter states that if you exercise the Diplomatic Clause, you will have to reimburse part of the commission the landlord had paid to his/her agent - pro-rated to the remainder of the lease term (for example, if you leave 3 months before the end of a 24-month lease, you will pay the landlord 3/24 of the commission he/she paid to the agent). In most cases, the tenancy agreement does not include this in case the landlord sells the property during the lease period. If there is no specific condition for this, the new owner has to honour the existing tenancy agreement. The tenant will just pay the same rent to the new owner.
You should also change the standard Tenancy Agreement if you are planning to sublet any part of the property, or if you plan to have pets in the property. The standard tenancy agreement states that this is subject to landlord's written approval, and you may want to change this at the time of signing in order to avoid problems later.
In any case, you should not be afraid of the legalities and your agent can help you to explain all this and negotiate on your behalf. It is still useful to understand the basic responsibilities, especially as the Singapore law can be considered landlord friendly. For example, if the tenant fails on his/her rental payments, the landlord can get a court order to re-possess the property as well as seize and sell the goods inside the property to recover any rent and legal costs from the tenant. This is contrary to many other countries where it may take years to get rid of uncooperative tenants – if ever.
Fees and Commission
Agent's Commission
The commission is typically full month's rent for every 12 months of lease. The landlord also pays commission a full month's rent for every 12 months of lease. If there are two agents involved, the agents will split the landlord's commission based on their mutual agreement.
Stamp Fee The tenant will pay for the stamp fee. Usually the tenant will give the money to the agent and the agent will pay it to the relevant government agency (Inland Revenue Authority of Singapore).
Stamp Fee is calculated based on Annual rent using the following rules:
If the lease term does not exceed 1 year - S$1 for every S$250 or part thereof of annual rent;
If the lease term exceeds 1 year, but does not exceed 3 years - S$2 for every S$250 or part thereof of annual rent;
If the lease term exceeds 3 years, or has any indefinite term - S$4 for every S$250 or part thereof of annual rent.
Example calculation:
Rent is S$4,000/month (S$48,000 annually) – lease term is 24 months: Stamp fee payable = S$48,000 / S$250 x S$2 + S$2 (for duplicate copy) = S$386
Check out Inland Revenue of Singapore (IRAS) website for more details - www.iras.gov.sg
TV License Fee
The TV license for a household is valid for one year from 1 January to 31 December at an annual license fee of S$110. When the tenant signs the lease for the house(usually one year), he needs to pay the TV license amount to the landlord. You can read more about TV license here
Utilities Deposit
Singapore Power Services (SP Services) will require you to pay a deposit before they will turn on the electricity and water, which you need before you can move in. The deposit will be reflected in your first bill. The deposit currently varies from S$40 to S$800, depending on your residency status as well as what kind of property you are renting. For a foreigner renting a private apartment, the deposit required is currently set as S$500. Please check SP Services website for more details - http://www.spservices.com.sg/
