HDB: Renting Procedures in Singapore

I realized soon after writing a post about how much you can expect to pay for your initial HDB rental payments and the new HDB registration law, I should actually go into the rental procedure itself. Well, it looks like I finally got round to it! It’s not a complicated procedure, and I’m sure you’ll be able to wrap your arms around it in no time.

Let’s start with the things you’ll have to bring along:

  1. Photocopied passport
  2. Photocopied employment pass
  3. Good faith deposit of one month rental

1) Screening, screen like crazy!

Finding a place to rent (or buy, for that matter) usually involves sequential elimination – you have your shortlist (evoked set, in marketingspeak) and your criteria, and at each stage of the decision making process you eliminate the options not having an expected given attribute (yes, I know I’m showing off but I’m trying to prove that I learned something during my years in college).

I know I’ve already gone through this part, but I’d just like to reiterate how important it is to know what you want before you sign. You so do not want to go through buyer’s remorse and be stuck with a place you hate for a year (at least). That’ll be as fun as walking on red hot coals… with an elephant on your back. If you’re new here, it’s a good idea to have a discussion with your family and agent.

2) Letter of Intent (LOI)

The LOI is a formal letter to the landlord that clearly states your  intention to lease the room/flat and your requirements. The offer is accepted when the landlord signs the LOI. It also a common law prerequisite that some consideration be given before a contract becomes binding. This is where your one month’s advance rental comes in.

There are a few things that you should take note of here, such as the  diplomatic clause, your security deposit, your term of lease and your HDB_by_joyxsoulrequirements. If there are additional things that you might need, it should be discussed with your landlord and added at this juncture. While oral contracts are binding in Singapore, what’s the harm of making sure it’s written down? Once it’s signed, the landlord is bound to provide you with the things you require.

Please conduct an inventory check at this point to ensure that everything that’s supposed to be there, is well, there. Take photos! If at the end of the tenancy, there’s damage arising from anything other than wear and tear to any of the inventoried items, you’ll have to pay for them. Without the photos, it might get a bit tricky to decide on a fair price.

The LOI will also have a clause that states the ‘Expiry of the LOI’. If the landlord does not sign the LOI within this period, the LOI expires and he/she must return the good faith deposit to you.

3) Tenancy Agreementcontract_by_65heroine

The Tenancy Agreement is a contract between you and your landlord.  Go through it carefully, ensuring that everything you’ve agreed upon is reflected. If you’re unsure of some of the terms or clauses, ask your agent for some help. I’ll expand on some of the more interesting details in the tenancy agreement in a future post.

Just a note. If you’re renting a room, your electricity and water bills will be borne by the landlord. However, if you’re renting the whole unit, you’ll be paying the bills yourself.

The contract is complete when the Tenancy Agreement has been signed by you and the landlord and the various payments have been made. As a tenant, remember that you’ll also have to bear the stamp duties. For the landlord, please remember that you have up to 7 days to register the details of your new housemate with the HDB.

See, it’s not really that hard, is it? It’s quite similar for private properties such as bungalows as well. Now that you know the renting procedure, why don’t you take a look at some your options at my listings page. Leave a comment if there’s anything else you’d like to know!


14 thoughts on “HDB: Renting Procedures in Singapore

  1. Pingback: HDB: Singapore Rental Basics (First Payment) « Agent Fai on Property in Singapore

  2. Thanks for the info. Very clear!

    I would like to check if the landlord has the right to forfeit my security deposit if I am not able to sign the tenancy agreement?

    • What happened now to your security deposit? We had the same case as yours. Pls share some advice on how to recover the money if ever. Thanks a lot.

  3. Thanks Cinde!

    Most will usually pay the security deposit only upon signing the tenancy agreement, so can I assume that you’re referring to the good faith deposit? It’s usually the same amount anyway ( = 1 month’s rent).

    The good faith deposit is similar to a booking fee, and is usually handed to the landlord when you sign the LOI (prior to signing the tenancy agreement).

    When you’ve signed the LOI, you’re saying that you’ve agreed to rent the unit, but would require further negotiation on several terms/some additional action to be taken (for example provide more chairs, repaint walls, get rid of hive of killer bees etc) by the landlord as well (which will be stated in the LOI). As long as the landlord has signed it, and you’ve handed him/her the good faith deposit as consideration, the LOI becomes binding to both parties. This means that he/she cannot rent the unit out to another party, and has the right to forfeit the deposit if you choose not to proceed with the lease. Well, that’s the general rule. Although I’ve had cases where the landlord chose to return the deposit anyway, it’s pretty much up to the landlord.

    Of course, if it’s the landlord who is unable to provide you with the things he/she promised you in the LOI, then the landlord should be returning the deposit. Same thing if the landlord changes the terms of the lease at the last minute (tantamount to a new offer). A bit tricky here though. You might want to talk to your agent about it. Since he’s more intimate with your case, I’m sure he’ll be able to provide you with some useful insights.

    Hope this has been helpful!

    P.S. Oh, and if no LOI was signed (but money changed hands anyway), then it’s just like saying, “I’m booking this unit as it is now, it’s just that I’ll be signing the tenancy agreement on a later date”.

  4. hi
    we had been looking for a house. we liked one and spoke to the agent and owner and gave the good faith deposit. just before signing the loi we spoke to the owner to cut the period of stay to 1 yr and not 2 yrs. The owner disagreed and so we decided not to go in for it. We asked the owner to return atleast part of the deposit. However, he refused to return it. We have just a bank transfer as proof.is there anything we can do to get it back?

  5. hi, im just wondering, since its our first time renting a room, what happen is that we give a reservation fee which is half of the mthly rental the 1st agent though (got 2 agents) promised to give it back once we decided that week if we’re going for it or not, but thing is the 2nd agent denied that she knows about this therefore she say even if we cancel it we still have to pay them because its their company rule, i didnt know got such thing, although i hate to say the payment is not in black and white, instead we sign it as a good faith deposit and owner sign it also, and the letter states that we’re going to complete the payment once we move in, i guess its our fault also for not talking to them both. Now she say, we can still talk to the landlord if we dont really want the place but, we still have to pay their agents fee which is half a month. Its quite scary though as we never experienced this before..what should i do?

    • Hi Jaycel,

      There’s a good chance you might lose your good faith deposit but as far as I know, you definitely do not have to pay the agents. Agents receive their professional fees only when they close a deal. No deal closed = no fees paid. Period.

      Which real estate company are they from? You might want to call the company directly to inquire if they actually have such a (weird) policy. I’m quite sure the company’s will treat you fairly and honestly. You can also try calling the Institute of Estate Agents (http://www.iea.org.sg) to find out more. Heard they’ve taken a stronger hand in regulating agents.

      Do let us know how it turns out. I’m sure a lot of other readers are quite interested as well. Good luck, Jaycel!

  6. Hi guys,

    Thanks for sharing what your experiences here!

    I’ve been overseas on a consulting gig the last few months, so not exactly up-to-date with all the recent developments (and there have been many!). Let me try to help you out anyway.

    By right, the good faith deposit should be handed over only upon signing the LOI. Of course, we all know that’s not how it’s usually done. The agent just asks you to hand over 1/2 to 1 month’s cash as a booking fee / good faith deposit without signing anything (bank transfer or cash receipt as proof).

    Think of it this way – If you hand over the good faith deposit without signing the LOI, then it means that you do not want any changes made to the tenancy agreement / apartment itself. Changing any terms after the good faith deposit has been given is tantamount to a new offer. This means that the previous ‘deal’ (the one you paid the good faith deposit for) has failed to go through and the landlord has the right to forfeit your deposit. Of course, some landlords have been nice enough to release the good faith deposit.

    Hope this was helpful and do let me know how it went for you!

  7. Hi there, thanks for the info. I am wondering what is a standard commission that the agent charges for every successful transaction? Is it commonly half the sum of the monthly rental?


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