Saturday, June 8, 2019

Financial And Non-Financial Consideration For Renting Condo In Singapore

This is an update to my earlier post Weekend Leisure Post - To Renovate Or Upgrade? Finally, we've decided to choose the upgrade route and made a 5% deposit via Option To Purchase (OTP) for an upcoming condo. This means that we need to sell our current HDB within 6 months in order to avoid the 12% Additional Stamp Duty. 

During this period, we will be moving out to an interim accommodation (another Condo) for 2 years. It has been busy past few weeks/months and lots of viewings (both for renting as well as for selling). So, I thought it might be a good idea to jot down some of the interesting experience/facts that I've personally went through during the process of in renting the condo (I have yet to collect the key yet, so the list of consideration might not be complete). 

Case In Point        : Renting of a condo at Sengkang area (just TOP)
Contract Tenure    : 2 years
Rental per month : SGD2,100 (2-Room)     

Financial Considerations

1. Stamp Duty - Tenant need to pay for the Stamp Duty of the Tenancy Agreement (TA) and basing on the rental of SGD2,100, the Stamp Duty is about SGD201. The application of the Stamp Duty can be done via IRAS online.

2. Deposits - For 2 years contract, there is a need to pay 2 months deposit to the landlord (this might not be peculiar to Condo). With the 1 month rental to be paid up-front, before you step into the rented condo, you need to pay 3-months worth of rental (SGD6,300 in this case). 

3. Commission - For 2 years contract, tenant usually don't need to pay any commission as the landlord will pay 1 month worth of commission to the agent representing the landlord and this commission will be shared between the two agents. However, for 1 year contract, both tenant and landlord will pay half-month commission to their respective agents (if any). 

4. Early Termination - If there is early termination of the contract initiated by the tenant, the tenant need to pay the pro-rated commission (calculated based on the balance number of days) and it will be deducted from the deposit (withheld by the landlord).  

5. Monthly Maintenance Fee - Usually, the monthly maintenance fee will be borne by the landlord. 

6. Utilities Fee - Utilities like electricity, water, gas and data services will need to be arranged and paid by the tenant. 

Non-Financial Considerations

1. Letter Of Intent (LOI) - Once you've viewed and satisfied with the unit, your agent will help you draft the Letter Of Intent to the landlord specifying the contract period, monthly rental amount and list of tenant's requirements like lighting, curtains, furnishings etc..This is the time you need to pay 1 month rental to secure your interest.

2. Tenancy Agreement (TA) - Once the landlord agree with the Letter Of Intent, he will sign and send you the Tenancy Agreement specifying all the T&C of the contract. If you are agreeable, sign the contract accordingly and it is deemed effected from the indicated Commencement Date. 

3. Commencement Date - Usually, the landlord or his/her agent will arrange for the collection of keys on the Commencement Date stated in the TA. This is the time whereby the tenant need to pay the balance 2-months rental as deposit. 

4. Permit To Move In - Before you move in, you need to apply for the permit for the move, usually, it can be done only during weekdays, half-day on Saturday ans strictly no moving on Sundays. Also, there is a need to place a deposit to the management office for the move (for my case, it is SGD1,000 deposit which will be return upon completion of the move).  

The rental side of the event is more or less settled and now more time will be spent in arranging the viewing by the potential buyers on our existing unit. That's all from me for now.

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