The Tenancy Agreement (TA) encompasses the stipulations and provisions pertinent to property rental, encompassing clauses that address key points of the tenancy to ensure protection for both the landlord and the tenant.
Regard your TA as a safeguard, benefiting both parties.
A TA enumerates the mutually accepted terms and conditions. Both the landlord and tenant’s rights and obligations are precisely outlined within this agreement.
Why is it important to have a TA?
The TA serves as a future point of consultation in case uncertainties or discrepancies arise regarding matters such as the stipulated due date for monthly rent, privacy-related concerns, or the protocol for maintenance and repairs.
There’s a tendency for individuals to presume these agreements to be routine and hence, they might not receive the due attention.
However, it is imperative for you to acquaint yourself with and comprehend the terms, conditions, and clauses outlined in any forthcoming TA you are preparing to endorse.
I will highlight some common clauses in the TA to pay attention to.
Security Deposit
Upon signing the TA, you will be requested to submit a security deposit for the rented unit.
Typically, for a one-year lease, this amount equates to one month’s rent, while a two-year lease entails a security deposit equivalent to two months’ rent.
Content of Security Deposit Clause
The security deposit clause outlines the criteria for deducting funds to cover costs related to repairs or replacements necessitated by damage, not natural wear and tear.
Ensuring utmost clarity, it is imperative that the security deposit clause explicitly states the deadline for refunding the security deposit.
If the landlord is obliged to perform tasks such as cleaning or repairing appliances, the clause typically specifies a waiting period of one to two weeks following the tenancy’s conclusion before the deposit is refunded.
End of Lease Term
When the lease term concludes, the security deposit is subject to deductions for any damages or missing items incurred during the tenancy period.
It’s important to note that, unless expressly agreed upon by the landlord, the security deposit is not to be used for rent payments.
Maintenance and Repairs
When reviewing clauses concerning maintenance and repair, it’s advisable to assess the specific extent of your responsibility.
Tenant's Responsibilities
Tenant is accountable for covering the expenses of minor repairs resulting from natural wear and tear.
This stipulation underscores the importance of your commitment to uphold the property’s condition.
Typically outlined in a standard TA, the tenant’s responsibility encompasses the settlement of repair and maintenance costs that remain below a designated threshold.
This threshold commonly ranges from $150 to $300 and encompasses potential expenditures like air-conditioning servicing, tap repairs, and the replacement of light bulbs.
Landlord's Responsibilities
In cases where the repair costs surpass the predetermined liability cap, the onus shifts to the landlord to shoulder the excess expenses.
Reporting of Defects
It’s important to ensure that the clause encompasses a provision outlining the timeframe for reporting defects, typically extending to the initial 30 days of the lease duration.
These potential defects might encompass issues like malfunctioning plumbing or electrical wiring, dysfunctional air-conditioning systems, or damaged sockets.
Inventory List
This Inventory List outlines the inventory of items that will be available within the property for the tenant’s use.
These items encompass a range of things such as furnishings, appliances, fittings, and fixtures.
Tenant's Responsibilities
It is the tenant’s responsibility to verify the presence of each item as stipulated in the list within the unit.
It is of utmost importance to meticulously inspect this list, ensuring that all items are present and in satisfactory operational condition.
Tenant can also ask the landlord for the removal of any items within the property.
If there happens to be a particularly valuable item, you have the option to request its exclusion from the inventory to mitigate the possibility of accidental breakage or damage.
Sale with Tenancy
It’s important to read this clause to know whether landlord is permitted to initiate property viewings and whether the landlord can sell the property with the existing tenancy.
If the clause stipulates that the sale is not subject to the existing tenancy, the the tenant could potentially face a request to vacate the premises upon sale, facilitating the new owner’s occupancy.
Conversely, if the property’s sale is contingent upon the existing tenancy, you retain the right to remain until the lease concludes. The new owner will then be your new landlord.
Diplomatic Clause
Expatriates embarking on a two-year lease should ensure that the Tenancy Agreement incorporates the Diplomatic Clause. While many standard templates include this provision, it’s vital to verify its presence.
Activating the Diplomatic Clause
The Diplomatic Clause typically becomes operational midway through the lease period, which implies that for a two-year lease, it comes into effect after the initial year.
This clause grants you the option to terminate your rental agreement under specific conditions without incurring severe penalties.
Should an unforeseen overseas assignment necessitate your departure from Singapore, you possess the right to invoke the Diplomatic Clause and terminate your lease.