{"id":1669,"date":"2022-09-04T16:00:00","date_gmt":"2022-09-04T08:00:00","guid":{"rendered":"https:\/\/www.99.co\/blog\/singapore\/?p=1669"},"modified":"2023-03-09T18:19:41","modified_gmt":"2023-03-09T10:19:41","slug":"letter-of-intent","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/letter-of-intent\/","title":{"rendered":"Letter of intent: What is it all about, and what does it entail?"},"content":{"rendered":"
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Having chosen your next home and negotiated the terms of the arrangement, it is time to make your move and secure the unit. While not obligatory, the letter of intent (LOI)<\/strong><\/a> is an often-used tool and many landlords would refuse to skip this step. <\/span><\/p>\r\n\r\n\r\n\r\n

Especially when you plan to rent a place for a long period of time, or when you aim to rent an entire unit, it is common practise to employ this transitory option and make use of the LOI.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n

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Many renters get confused over the letter of intent.<\/figcaption><\/figure>\r\n<\/figure>\r\n\r\n\r\n\r\n

What is a letter of intent?<\/h2>\r\n\r\n\r\n\r\n

A\u00a0letter of intent\u00a0is really just that \u2014 A <\/span>letter<\/span><\/i> stipulating your <\/span>intentions<\/span><\/i> to eventually enter a rental contract with the landlord in respect to the agreed-upon unit. <\/span><\/p>\r\n\r\n\r\n\r\n

In short, it serves as an intermediary step\u00a0between the viewing\/negotiation and the signing the tenancy agreement (TA)<\/a>.\u00a0While the LOI\u00a0can rightly be seen as an unofficial prelude to its official and legally binding brother that is the tenancy agreement, we still advise you to pay close attention to it.<\/span><\/p>\r\n\r\n\r\n\r\n

The letter of intent\u00a0serves a series of purposes. <\/span><\/p>\r\n\r\n\r\n\r\n

Firstly<\/strong>, it shows the landlord that you are serious in wanting to rent the unit. <\/span><\/p>\r\n\r\n\r\n\r\n

Secondly<\/strong>, and relatedly, it aims to secure the place, meaning that from the moment the LOI is signed, the landlord will cease to look for prospective tenants and exclusively focus on settling a deal with you. <\/span><\/p>\r\n\r\n\r\n\r\n

Underscoring the significance of the LOI, its issuing goes accompanied with the hand-over of a <\/span>good faith deposit<\/a> <\/span><\/i>(also known as a booking deposit). This is a mandatory measure and serves as a financial token to credibly back your intentions. <\/span><\/p>\r\n\r\n\r\n\r\n

The good faith deposit generally amounts to one month\u2019s rent for a 12-month lease, and double that for a 24-month lease. After the rental agreement is signed, the good faith deposit will become the security deposit or serve as an advance rental fee. \u00a0<\/span><\/p>\r\n\r\n\r\n\r\n

Before issuing the letter of intent, ensure the landlord is the real owner of the property<\/h3>\r\n\r\n\r\n\r\n

Importantly, before you write the LOI\u00a0and transfer the good faith deposit, make absolutely sure the landlord you are dealing with is in fact the real owner of the unit. <\/span><\/p>\r\n\r\n\r\n\r\n

A foolproof way to this is by e-validating someone\u2019s ownership here<\/a> (the cost is S$2.50).<\/span><\/p>\r\n\r\n\r\n\r\n

As a precaution we also recommend to bypass the agent and send the good faith deposit straight to the landlord. It should be in the form of a cheque or bank transfer (instead of cash), so that it is traceable<\/strong><\/span>.<\/p>\r\n

Diversity-friendly properties for rent<\/h4>\n
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