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Real life common encounters on property problems and some possible solutions are shared to benefit all international surfers to www.asiahomes.com

TIPS for NEW SINGAPORE HOUSING AGENTS

More interesting Cases . . .

Case 31. Extracted from Tips for Expatriate Tenants and Landlords: Case 14. Sep 18, 97. Indian Nationals to be more aware of the Singaporean culture. "I told you so!" said the Chinese landlady. She discovered that the first and second months’ rental were not credited to her bank although the Indian nationals had agreed to bank in electronically. She was reluctant to accept Indian nationals as Tenants but was persuaded by me to do so as both husband and wife (no children) have responsible management positions in top US & global companies.

I had to ask her to let me investigate. The husband apparently forgot to instruct the banker as he travels frequently. The second month’s cheque was posted but might have been lost.

2 months’ rental cheques were collected by me personally and rushed to the Landlady’s residence. The couple apologised profusely.

Part of the fault was mine. The tenancy commenced on July 26 and 4 days’ rental plus 2 months’ deposit were paid. The advance monthly rental was supposed to be paid on August 1 but was not paid.

New agents would learn from my case. Get the Tenant to issue August 1 cheque at same time as the 4 days’ rental. Alternatively, make rental payments on 26th of the month.

Missed or delayed rental payments from personal leases or company leases happen. The Landlord must check the bank statements regularly.

Case 30. Sep 17, 97. 6-month lease. I spent one afternoon taking a Japanese around to view 4 apartments after convincing the Landlords to take a 6-month lease. In the end, he said he might have his family coming over and would need more than the one-bedroom apartment shown. Will this be considered a waste of time and should you be more selective in taking up corporate cases?

Case 30. Sep 17, 97. Screening your Tenants carefully. Male muscular tenant with ear-ring in one ear and a respectable hard working Englishman. The fashion industry people usually look different and above ear-ring prospect certainly was outstanding. The Landlady told me she was uncomfortable with this type of Tenant. However, new apartments are in great supply and economics is the bottom line.

I advised that I would do a thorough screening of this prospect, company search and visit the company to find out more, if there is a closing. As a new agent, one may not have much choice in the quality of Tenants! However, you should screen your Tenants. Some landlords are more interested in the bottom-line but some want quality tenants able to keep the apartment clean. Such landlords are usually present at viewing and you have to be on your toes!

Case 29. Sep 17, 97. Get the Company Accountant to issue the good faith deposit fast! Although the rentals are declining, there are certain places like The Atria at Meyer which attracts prospects. My co-broking agent worked very fast but still a "friend" of the Landlord has somebody interested and would offer $4,000 rental and maybe one-year lease. The Letter of Intent was just signed but this is not legally binding really as it is subject to contract. The Landlord phoned me to ask whether the prospect would be issuing him the deposit, just 24 hours after signing the Letter of Intent. Luckily my co-broking agent had the cheque.

Cases can be lost because of the Company’s delay or the agent’s inattentiveness to getting the cheque. This is because I did not have exclusive marketing rights and most Landlords will not give exclusive rights. I usually get the cheque within 24 hours as life is very competitive. The next big gun to chase is the lawyer to get the leasing contract out fast!

Case 28. What to do if you have multiple Tenants? I would expect the Jurong Town Corporation to buy more HDB apartments and rent direct at <$1,800. As new agents, you will be in for stiff institutional competition and may be wiped out if you are dealing with Tenants with rental budget of <$2,000.

One solution may be to get multiple tenants for private apartments like my Amberville Case (see below). Of course, your commission will be very little. The following is extracted from Tips for Expatriate Tenants and may offer useful advice to New housing Agents.

Case 27. Aug 20, 97. Multiple Tenants - Legal advice not to rent to multiple tenants. In this declining market, unless the Landlord is willing to renovate the whole apartment and put in new furniture, it is best to accept multiple Tenants. In this Amberville apartment, the Landlord will not replace the 20-year old cupboards. old sofa sets and other furniture. 3 bachelors want to share the apartment. His lawyer advised against leasing to multiple tenants as nobody will be responsible for damage to the apartment and collection of rent would be difficult.

  • As an agent, I would prefer families too as it takes more time to deal with 3 separate tenants. This case illustrates important issues for all Landlords with properties which do not attract interest from prospective renters.
  • "Would you want to wait longer or put in more money to refurbish the apartment since response was poor after viewing due to the lack of new furniture and condo facilities?" I advertised 3 times/week for past 4 weeks and know response was bad.
  • If Answer is No, multiple Tenants is a quicker way to recoup your investment in renovations done. At a rent of $1800/month, you will get $21,600 a year, more than enough to cover your minor renovations.
  • The quality of Tenants. These are foreigners employed by reputable Architect Firms as assistants and we would expect them to be responsible. I cannot guarantee they will look after the house properly. The solution will be for the Agent to do monthly inspection.
  • Would the Tenants keep religious idols in the Apartment. This should be stated clearly that no religious idols are allowed before leasing.
  • Who would be responsible for negligent damage to the Apartment? This should be stated in the leasing agreement that all 3 shall be equal responsibility.
  • What happens if one Tenant disappears if the lease is signed by only the Chief Tenant? Solution as advised by me is 3 separate leases. The other 2 Tenants will be protected in case the Chief Tenant wants to evict them legally.
  • No exclusive possession.
  • If one Tenant has excessive number of guests.
  • Who will be responsible for the cleanliness of the place? Cannot be enforced.
  • If one of three refused to pay rent, how to rent it out.
  • One month’s advance not sufficient. Default in payment and lock up the room.
  • Architect firm will not rent on their behalf
  • Chief Tenant disappears. Troublesome once possession of the place difficult to dislodge. The other 2 tenants still around. Cannot evict them and get new Tenant. Sub-tenants prepared to pay but no contract. Live free of charge, as no contract with Chief Tenant.
  • Chief Tenant returns.
  • Need a court order to take possession.
  • Exclusive Possession
  • Failure to pay rent being foreigner are common thoughts for the lawyer.

Legal solution in the Amberville Case. This case illustrates the need to seek legal advice. The lawyer’s solution was to make the 3 tenants to be jointly and severally responsible for the apartment and the rental.

My co-broking agent asked the 3 Tenants whether they should have a duty rooster to clean the apartment? The 3 young men did not respond to her humour. From this incident, it is best to keep our mouth shut as Asians may not have the American sense of humour!

Also, during the negotiations of the contract with the Landlord, my co-broking agent kept asking about their other matters. I said we should not be distracted from the intense bargaining to close. You have to focus both the Tenant and the Landlord on the contract otherwise you will not be deemed professional. When we said goodbye, one of them offered to refer cases to me although I represented the Landlord. If I had joked throughout, I might not have this offer as I would not be considered serious.

Case 16. Do not rent out unapproved HDB units - "locked one room" is commonly advised by many Agents.

The following is extracted from Tips for Expatriate Tenants & Landlords.

Case 30. Aug 31, 97. Locking one Room of the HDB apartment. Today, I was asked by a prospective Landlord of a Yishun 3-room (2 bedroom) apartment as to whether she should rent out to "friends" or with one room locked.

This is a perennial question. To lock one room and rent the whole apartment as advised by some housing agents (most likely unlicensed or new housing agents).

I presume she is a genuine Landlord and not HDB official as this is Sunday morning! I advised all HDB owners not to sublet one room and lock up one room as HDB requires you to be occupying the apartment when you sublet one room.

Approval from the HDB is required if you wish to rent the whole unit. If you wish to let your "friends" stay in the whole unit, this is not allowed technically.

How does the Government know? Complaints by neighbours or someone. The other method is to check the mailing address, telephone and utility bills. If your "friends" or unapproved Tenants have listed their names on such bills (since you are not going to pay for them), this will be a lead for the officials if they want to use the powerful computers to match owners with, for example, utilities bills or phone bills.

You may pay all the utilities but you will not want to pay the phone bills as they could be substantial. It is best to get written approval from the HDB. Quality tenants with employment pass will not want to get involved with illegal acts. You will end up renting to those who will take the risk.

Case 15. Try not to forget the 1 month’s advance payment to the Landlord. August 30. Last night was handing over of the Amberville Apartment to 3 tenants. The co-broking agent forgot to get the 3 tenants to bring along a cheque/cash. Once there is handing over of keys, the advance rental must be paid.

I know of one case from another agent in which the Tenant did not pay the advance rental on occupation. I have a case where the Landlord agrees in writing to accept the advance rental one month later since the Tenant will be getting his salary.

In all situations, please remember to remind the Tenants to bring their cheque books/cash or you will have to spend more time, driving them to the automated machines past midnight or going to their offices to get the money! If you have multiple tenants, you will spend more time!

Case 15. Try to get references from existing tenant when you know you are not going to close. Nothing to lose. August 29. Heavy afternoon shower. I received an unsolicited phone call and rushed to show a Scottish wife a 2,100 sq. ft apartment in Lloyds Road, 3+1 with attached baths in all rooms and a spacious kitchen, renovated, 2 big balconies (Americans usually love balconies), asking for $3,800 rent. There was a flattened site ready for development of condo and a completed building on the other side.

Established Agents will not waste time on such a unit because chances of success are very slim. Location in Orchard Road area, spacious rooms and few minutes walk to the Somerset MRT and being renovated are its selling points. The wife was hesitant owing to the possibility of noise from new construction on vacant land.

A bare-chested Australian tenant in next unit was at the balcony of the neighbouring unit. This is an opportunity for reference from an existing tenant. It is a double-edged sword. However, he highly recommended the place (this is the best referral and it is free). I asked him about the construction noises. He was not affected. To my surprise, he even said that since Mr Lee (Kuan Yew) is staying behind, there will be little construction noise from the vacant lot!

From negative reply, the Scottish wife agreed to ask her husband to view the apartment the next day. The battle was won when Mr Lee’s name was mentioned. The war was lost because the husband refused to view the place because of its construction activity! You may pick up a prospective tenant though.

Case 14. Try not to let prospective Tenant and Landlord meet. August 28. I had a case whereby the Landlord had golden yellow curtains installed and the Tenant wanted pastel curtains and to change the new black sofa set to another colour. After introducing both to each other by phone, the deal was dead because the Landlord must have scolded the prospect. From this experience, it is sensitive for the Landlord if the prospect criticises his property. It is best not to let both parties negotiate as there will be a "loss of face" when either party disagrees. Much time and effort would have gone to waste in such cases.

Case 13. Ethics - To co-broke but no payment of commission. August 28. I had a recent report of a government-linked property company whose telephone operator promised commission to Agents on success. However, when a one-year residential property lease was secured, the company refused to pay the commission saying that the Company’s policy is to pay only for leases secured for more than one year. Such actions are "dishonest" and new Agents must be aware of such "tricks" set by institutional/bigger Owners/Developers. Some have bad reputations. Ask around and learn from the experiences of others.

Case 12. Ethics - To co-broke or not? Acting in the interest of Owners/Developers is the best policy. August 28. There is nothing wrong in not wanting to share the commission since you have worked hard for your exclusive listing. Today, I know of 3 cases of agents not wanting to co-broke. These are: a Claymore studio apartment, the Yio Chu Kang housing project of one of the big 4 local banks and a terrace house in Clover Road. The houses in Yio Chu Kang are residual from an earlier project and have been vacant for over 2 years (with "for sale" signs hung out on the gate). In this declining market, I am surprised that the bank’s own property development does not want to co-broke.

Co-broking will be the best policy and will be in the interest of the Owner/Developer. This enlarges the base of prospects and may close the deal earlier. In such instances, the Owner or Developer probably has entrusted the Agent with the property and will not like non-cooperative attitudes.

For new Agents, please note that the vast majority of rentals (in my experience) are closed through co-broking as few expatriates (being new) will ring you to find out about your property. It is wiser to earn less than to earn nothing as the sophisticated Owner/Developer will not give you a second chance if you take too long to sell his property.

Case 11. Ethics - Should you tell lies? Honesty is the best policy. August 28. New agents need every cent to cover their higher overheads. I have a real case here in which the Tenant prefers a Bayshore apartment but I have to co-broke with another agent. The other apartment was second choice but this was direct from the Owner and I need not share the commission. You will face such situations and may tell the Tenant that the choice unit‘s owner will not rent to him (being an Indian). It is hard to be honest. Much depends on you.

Case 10. Construction next door, facing busy main, ground floor, badly maintained apartment with leaking toilets/windows. Poor prospects of getting a tenant. August 28, 97. Lately, Tenants are becoming fussy. If you are a new agent, do NOT waste money advertising apartments with above mentioned characteristics as you will have very slim chance of success. Unless the rental is exceptionally lower or there are special reasons.

Case 9. A persistent follow-up is necessary. New Agent needs to hurry the lawyers. August 26, 97. There are 2 types of co-broking agents and one type of lawyer your will encounter.

  1. One type of co-broking agent will tell you that the lawyer (for the Tenant or Landlord) is scrutinising the tenancy agreement but actually is evaluating several other offers or getting better offers. After wasting >7 days, you will be told that the party is not interested.
  2. The other rare type will be honest enough to tell you promptly that the offer is not acceptable.
  3. As regards the lawyer acting for the Tenant or Landlord, he or she is invariably "busy" and if you do not pester for prompt advice (<2 days), you may lose your prospect as your co-broking agent cannot afford to wait for you. In addition, the other party has to read the agreement and will need more time.

Please be persistent by phoning the lawyer and/or his Secretary who will get sick of you to impress on the urgency of the business. Otherwise, you may lose a case just because the lawyer has been busy in court.

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