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Tenancy Agreement (TA)

11 min read
Property jargon of the day: Tenancy agreement
Property jargon of the day: Tenancy agreement

Once in a while, 99.co picks a piece of property jargon to demystify. Today we look at the Tenancy Agreement (TA).

What is a Tenancy Agreement (TA)?

A tenancy agreement is the contract between the landlord and tenant, regarding the lease of the property. It’s a legal document that states the rights and responsibilities of both parties, and any potential repercussions for violations.

It’s important to note that, in Singapore, the TA is not as standardised as in some other countries. There is a template document from the Council of Estate Agencies (CEA) here, but it is not mandatory to use it. (We suspect this may change in the future, but at the time of writing, it’s still possible to draft another TA to use).

As such, to come across TAs with unusual term. There are TAs that ban the consumption or preparation of certain food types, for example, and TAs that ban certain home activities (e.g. running any “from home” business, or mining Bitcoin).

Prospective tenants should never make assumptions about the TA and must study the details.

Two people about to sign a document.
The TA is the contract between the landlord and tenant regarding the lease of the property.

What is in the TA?

A tenancy agreement will usually include:

  • The details of the tenants and landlords.
  • Tenant’s covenants: these are the tenant’s promises, like paying rent, keeping the house clean, not illegally subletting the unit, etc.
  • Landlord’s covenants: these are the landlord’s promises, like not entering the unit without the tenant’s permission, maintaining the structural condition of the unit, paying back the security deposit at the end of the lease, etc.
  • How the utilities will be paid (power, water, Wi-Fi, etc.) The tenant usually pays for these bills in Singapore.
  • Liability for repairs. The most common arrangement is that the tenant is liable for up to a certain amount (usually S$150 to S$300), while the landlord must cover the rest.
  • Details on when and how the rent is to be paid.
  • Termination clauses for the lease, such as the diplomatic clause (see below), or any other circumstances that let a tenant break the lease.

Again, remember that TAs are not all the same, so you will see some variations. Even if you’ve rented a house before, never assume the conditions are all the same.

For landlords, you can get the help of a property agent or lawyer if you want to add an extra clause to the TA. But if you do this, be sure to highlight the extra clause to your prospective tenants. This will prevent misunderstandings later.

HDB flats for rent

 

Here are some clauses to watch out for:

The “Exclusive Possession” clause

This is an important term that shouldn’t be missing from the TA. It typically says the tenant can “enjoy the premises without any interruption by the Landlord”.

Under this clause, tenants may refuse entry of the premises to others, as if they were the owner. In fact, they can even refuse entry to the landlord. So if the landlord wants to enter the house for any reason, such as to do renovations or conduct viewings, they need the permission of the tenant to do so.

The “Fair Wear and Tear” clause

Tenants must keep the house (and any inventory) in good condition. However, the “fair wear and tear” clause means they are not liable for damages caused by aging, and reasonable use. The landlord also can’t keep part of the security deposit to pay for this damage.

For example, if the kitchen sink pipe bursts because it’s 20 years old, the tenant isn’t liable or that. But if the pipe burst because it got clogged, and the tenant tried to take it apart to do a DIY repair, then they’re liable for the damage.

The definition of fair wear and tear is loose, but common sense applies. For example, the landlord can’t make the tenant repaint the entire condo because the paint in some areas is peeled.

The diplomatic clause

The diplomatic clause is important to foreigners. It lets them break the lease without incurring penalties, if they can no longer live in Singapore (e.g. retrenchment, a new posting, dropping out of university).

With this clause, tenants only need to give two months’ advance if they need to break the lease. However, most tenancy agreements will state that the clause only applies to tenants who have stayed for at least 12 months.

Condos for rent

 

The “Right of Re-entry” clause

This effectively allows a landlord to terminate the lease when a tenant violates some rules. The most common reason is late or unpaid rent. The TA should state how and when this may happen (e.g. if rent is not paid within 21 days of the due date).

A terminated tenancy agreement lease contract.
Landlords can end the lease when a tenant violates some rules.

Be on the lookout for tenancy agreements that contain strange or missing terms here. For example, if the TA says the landlord can take over the property again when you don’t pay rent (giving no timeline), you could be evicted just for being a day late.

 

What is the process of the payment and signing of the Tenancy Agreement in Singapore?

To secure a rental property, tenants typically need to pay a deposit equal to one month’s rent for a one-year lease or two months rent for a two-year lease, along with the first month’s rent. It’s advisable not to pay more than one month’s rent as a deposit. 

A third-party witness, such as an agent, should witness the signing of the tenancy agreement. 

Both parties should agree on a fixed payment method, such as GIRO or internet banking, to ensure proper documentation of all financial transactions. It is also recommended to avoid making cash payments for the deposit or rent. Instead, cheques should be used as proof of payment.

 

Where do I get a Tenancy Agreement in Singapore?

These standard tenancy agreement templates have been created by the Council of Estate Agencies (CEA) with input from regulatory agencies, real estate industry associations, experienced practitioners, and consumers to help those who plan to rent out or rent an HDB flat, bedroom, or private property. 

While some clauses may require customisation, most are ready for use.

What bits of property jargon confuse you? Let us know in the comments section below.

If you found this article helpful, check out Tenancy agreement and security deposit in Singapore: What renters must know and Guide to breaking lease and early termination of tenancy agreement in Singapore.

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About Ryan Ong

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