1H 2016 Singapore Property Market Review

For those looking to rent

101 on rental contracts and negotiation

Things to take note of

Have a good understanding of the rental market
Landlords are typically represented by agents and are more often than not, familiar with market prices and norms. You are likely to be on the losing end if you enter a rental negotiation without any view on prices in the area, price trends or demand for a particular property.

To get started, you can get access to rental information from Singapore’s Urban Redevelopment Authority (URA). For those who would like easy access to property insights on the go, DREA.sg provides you instant real estate insights on past transactions, prices in the area, trends and even a comparison of properties to help you shortlist the right homes for you.

It would also be advantageous for both landlords and tenants to know the market norm. Prior to signing the contact, landlords, tenants, and agents should sit down and go through the tenancy agreement. It would be useful to highlight any clause that is out of the norm so that all parties are fully aware of what the contract entails.

Letter of Intent - Agree on furnishing items and itemize them where possible
A letter of intent is typically provided by the tenant to the landlord before a rental contract is issued. Tenants are the ones providing the Letter of Intent, and they should try to be as detailed as possible in the letter to achieve mutual agreement with the landlord from the onset on which items and fixtures are provided. For example, if there is verbal agreement for landlord to provide a television and a fridge, these should be itemized and reflected in the Letter of Intent.

Tenants renting a unit without the help of their own agent should thoroughly review their Letter of Intent before sending it across to the landlord. Do note that templates for Letter of Intent found online may not always reflect rental norms in Singapore.

Take pictures – likely to come in handy when resolving disputes
It is advisable for tenants to take detailed pictures of the rental unit prior to moving in. This is helpful if tenants end up finding fault with the unit after moving in for a period of time. e.g. a cracked ceiling. With pictures as evidence, it is easier to determine who is responsible for the repair fees and arguments over minor issues can be avoided.

Negotiation – Research matters and don’t just negotiate on rental prices
One way to negotiate for a discount is to offer to pay several months worth of rent upfront. However, this may not necessarily work on all landlords. The best way to get a good rental price would be to research on past rental transactions in the property and in the area, and use that as a base for negotiation. DREA’s instant negotiation tool provides you with key points for negotiation as well as data to back you up.

Aside from prices, tenants may also negotiate for a warranty period on furnishing items. This way, if items such as the Television were to break down soon after moving in, they will be covered by the landlord.

Minor repair fees – Agree on the amount and the process for getting quotes
Minor repair fees refer to the amount a tenant would have to pay out of pocket. Any repair cost above this amount should be paid by the landlord unless it is a case of damage caused by the tenant. It is therefore important for tenant and landlord to agree on this and have in in the rental contract.

Separately, it is also important to agree on the process for getting a quotation for repair. Will the landlord be the one to get a quotation or should the tenant be getting a quotation? Landlords will always want to get the cheapest quote so they don’t have to pay as much; tenants will always want to get a quote higher than the agreed minor repair fee so they don’t have to pay for the repairs and get the best quality possible. Hence, landlords and tenants should agree on a procedure for getting quotes to avoid arguments in the future.

Tenancy Agreement
The Tenancy Agreement is actually a standardized agreement that is commonly used for all rentals. This is a template that real estate agents would use. If there are clauses that the tenants and landlords would like to include or remove, the agent should edit the agreement before having both the landlords and tenants sign it.

More tips on saving money when renting a condo

1.Start apartment hunting early - Always allocate 1-2 months to do your research on the condos that will fit your requirements

2.Know your landlord - Understand if the landlord has had multiple enquiries and find out if the apartment or condo has been on the market for a while

3.Identify your needs - Identify the things that matter to you from the onset so you don’t end up paying a premium for things that matter to others but not to you.

4.Be sure of what you’re asking for - Do not show hesitation or weakness as the landlord might sense that and you will lose bargaining power.

5.Be creative with your asks - If you tried lowering the rent but failed, don’t give up. Try for something else. Be creative with your asks and you might just get it.

6.Find the right agent to represent you - The right agent will recommend the right homes and provide additional input to help you get the best deal possible.

Visit DREA.sg to find out about market norms and negotiation points