{"id":25805,"date":"2022-10-09T11:50:00","date_gmt":"2022-10-09T03:50:00","guid":{"rendered":"https:\/\/www.99.co\/blog\/singapore\/?p=25805"},"modified":"2024-11-20T19:26:19","modified_gmt":"2024-11-20T11:26:19","slug":"letter-of-intent-loi","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/letter-of-intent-loi\/","title":{"rendered":"Letter of Intent (LOI): LOI for Tenants in Singapore"},"content":{"rendered":"
<\/div>\n

Every day, 99.co takes a piece of property jargon and explains it in English. Today, we’re looking at the Letter of Intent<\/strong> (LOI) for all tenants.<\/p>\n\n\n\n

What is a Letter of Intent (LOI)?<\/h2>\n\n\n\n

In the property market, an LOI is a prelude to another binding document, the TA<\/a>. It is a preliminary agreement by a tenant to lease a landlord’s property, as well as the latter’s acknowledgement.<\/p>\n\n\n

\n
\"Letter
An LOI is a preliminary agreement by a tenant to lease a landlord’s property.<\/figcaption><\/figure><\/div>\n\n\n

When the LOI is signed, it is always accompanied by a good-faith deposit, or booking deposit. The norm is one month of the rent for a 12-month lease, and two months for a 24-month lease. Note that this is convention, not an actual rule; there are a few rare cases where landlords accept an LOI with no deposit, or where the deposit has been than the usual sum.<\/p>\n\n\n\n

It is understood that, once the LOI is signed, the landlord will no longer pursue further tenants until the TA is signed. Once the TA is completed, the LOI’s good faith deposit then becomes the security deposit.<\/p>\n\n\n\n

Make sure the LOI is with the right person<\/h2>\n\n\n\n

Before you sign on the LOI, make sure you check out the landlord. The e-valuation list<\/a> on the IRAS website is handy here; use it to make sure the person you’re speaking to is the real owner of the property.<\/p>\n\n\n

\n
\"\"\/<\/figure><\/div>\n\n\n

Note that fraud involving the LOI is a favourite among scammers – they might pretend the property belongs to them, and then run off with the deposit money. If you have a property agent, they will go through the checking process for you.<\/p>\n\n\n\n

It’s advisable to pass the LOI, with the deposit, directly to the landlord. This prevents any intermediaries from stealing it.<\/p>\n\n\n\n

But LOIs don’t always result in a TA being signed<\/h2>\n\n\n\n

Let’s say you sign the LOI and hand over the deposit, but don’t sign the eventual TA<\/strong>. There are several reasons this can happen the most common being:<\/p>\n\n\n\n