6 things you need to include in the tenancy agreement

Picture: BankBazaar.sg

Giving your house out on rent is a huge decision! You may have lived there and made it a home full of memories, or you may have just bought it with your hard-earned money as an investment. Either way, the asset remains precious.

If renting it is what you decide, then it is prudent to keep some safety checks in place to ensure it plays out well for you. It is estimated that expats comprise 40% of Singapore’s population, making the property and rental market very dynamic. While there is a pretty standard process for documentation, you can also check out your rights as an owner online.

We have six crucial details that you must ensure that you include in your contract to make your life easier.

1. Cap on repairs

Usually, a tenant needs to pay for minor repairs amounting to $150. The homeowner has to pay anything more than that. In case you are providing premium furniture and fittings, you can pin this amount to $200. So you are only required to foot the bill for expenses that exceed this amount.

Make sure to take pictures or even videos where required of the furniture and fittings.

Why is this important and how can you safeguard yourself from misuse?

  • If appliances are mishandled, as a homeowner you could have to spends hundreds of dollars in replacing them. So ensure that apart from setting a minimum amount, you also keep guarantee cards handy.
  • Try buying goods that are energy efficient.
  • Insist on known vendors or cleaners to be used for your appliances if they are brand new. This will impact longevity and the clause can be put into the contract as well.

Related: How to get the best WIFI at home

2. Security deposit details

The security deposit amount typically ranges from one month’s rent to three months’ rent depending on both parties and also other factors like the lease period, location, etc. It would be best practice to list down in your agreement, what the security deposit can be used against.

This is not a legal requirement but would just save you the hassle at the end of the lease period, just in case the tenant defaults on something.

Why is this important and how can you safeguard yourself from misuse?

  • While normal wear and tear remain your responsibility as a homeowner, tenants sometimes could be irresponsible with marble floors or high-end fittings. It is best to let them know your expectation of maintenance before you hand over the keys.
  • If there are young children in the household, again it is prudent to come to an understanding regarding what the security deposit will cover and what it won’t.

3. Air conditioner maintenance

The tenants usually do regular servicing and maintenance of the air-con units every quarter. The landlord may sometimes suggest a preferred company that they like to work with, but they cannot impose it. However, ensure you collect the receipts when the house the vacated. You will need them to show to your next tenant.

Why is this important and how can you safeguard yourself from misuse?

  • Most homes have 3-4 AC units each. Hence, it is best to get the commitment to have regular maintenance done in your contract. Also put in a clause indicating that in case that is not done, a certain amount will be deducted from the security deposit.
  • As a homeowner, you can insist on a more thorough chemical cleaning once in two years as well.

4. Permission to visit the property

Towards the end of the lease, you may want to bring in new prospective tenants to view the apartment. You will have to mutually agree with the residing tenant on the time and date for each appointment.

You wouldn’t want to skip this clause and risk being in a position where you have to wait for your apartment to be vacant before you search for new tenants and lose out on rent in the interim.

Related: 7 Necessary Questions to Ask Before Renting an Apartment in Singapore

5. The preferred mode of payment

Clearly specify in the tenancy agreement, the preferred mode of payment. Bank transfers are convenient. If you prefer cheques, then it would be wise to collect post-dated cheques for the entire period. Once you agree on a date that suits both you and your tenant, you should add that into the TA. For example, 5th of each month, etc.

Our advice would be never to let the tenants get behind on their rent payment for more than a month or two depending on the security deposit.

You are within your rights to give a written ultimatum to a defaulting tenant and then an eviction notice. If for some reason, you would still like to keep your tenant, you should get a writ of distress made, that would allow you to collect arrears for up to 12 months.

6. Number of tenants

Are you renting out an HDB unit? There are strict rules in Singapore for maximum occupancy. Make sure that you put down in your agreement the total number of occupants that will be residing in your unit.

See the table below for a quick check on what is allowed and avoid unnecessary legal trouble later.

Flat Rental Room Rental
Flat Size Max. no. of tenants Max. no. of rooms Max. no. of tenants
1 or 2 room 4 Not allowed NA
3 rooms 6 1 6
4 rooms & above 9 2 9

Clementi. Picture: iProperty

It is always desirable to have tenants you can communicate well with but if that isn’t possible, you can also route all your interactions through your agent. Once your contract is signed, sit back and enjoy the joys of having a passive income.

RelatedShort-term stays – one step closer to reality

Share