TIPS FOR LANDLORDS
Security Deposits in Singapore
Last updated: 11 Jul 2002
Research update from Asiahomes Internet. This URL:
http://www.asiahomes.com/singaporeaur/3months_deposit.htm
The Singapore Landlord requires the tenant to pay a returnable security deposit. In 2002,
the amount of security deposit is usually one month's, two month's and three-month's rent
for a one-year, two-year and three-year lease respectively.
However, there are several corporate landlords who demand three months' rent for a
two-year lease or they will not rent the unit. Much depends on negotiations.
What Can Landlords Deduct From Security Deposits?
The deposit can be used to cover non-payment of rent or for any damage that may be caused
during the tenancy. We don't know of Singapore laws defining "security" and have
used the California law as an example.
A "security," according to Civil Code 1950.5, is "any
payment, fee, deposit or charge, including but not limited to, an advance payment of
rent." The security may be used for the following:
Item1. "The compensation of a landlord for a tenant's default in payment in
rent." This means: Pay your rent or your deposit may be used. Before you leave,
30 days' written notice is the California law.
In Singapore, the security deposit is NOT permitted to be used as payment of rent in the
last 1, 2 or 3 months of the tenancy, as stipulated in the tenancy agreement although some
Tenants try to do it.
There is no Singapore law, as far as we know, requiring 30 days' written notice although
some tenancy agreement do state that the Tenant must give 3 months' notice of their
intention to renew the tenancy agreement.
Item 2. "The repair of damages to the premises, exclusive of
ordinary wear and tear, caused by the tenant or by a guest or licensee of the
tenant."
The Tenant can either fix the problem or pay for it. Problems also arise in defining the
terms "wear and tear." In Singapore, few prospective Tenants bother to
take note of the condition of the place at the time they move in.
Write down or take digital pictures of damages in the unit when you go through the
inventory list with your realtor or landlord. This list will be your best
protection.
Common deposit deductions include repainting (especially if the tenant got creative and
painted a new color), replacing window treatments and floor coverings.
In some Singapore tenancy agreements, the Landlord has demanded a new coat of paint at the
expiry of the tenancy agreement and there is no dispute. However, there are Landlords who
deduct the amount to repaint the unit at the expiry of the lease as the unit is not in a
"tenantable" condition and there have been disputes over this
deduction.
Some Singapore Landlords find that the patching of holes (used for hanging pictures)
affect the overall look of the wall as the new paint on the covered holes make the wall
colour look different. Most landlords do not deduct any amount to repaint the whole wall
to get an even colour as they understand that the lease had been for two years and there
would be a need for a new coat of paint for the new tenant.
However, in some bad relationships between the Landlord and the Tenant, the Landlord
simply deducts the deposit for repainting as the unit is not in a "tenantable"
condition. In bad relationships, some Tenants disallows viewings from new prospective
tenants or break lease and the Landlord just wanted the wall to be in the original
condition.
"Wear and tear" in the tenancy agreement is a great source of
dispute. For example, a Tenant may feel that a worn out sofa or a scratch on
the parquet flooring is wear and tear while the landlord may feel it's damage done by the
movers or the children or pets of the Tenant. Damage according to the dictionary is
"loss or detriment due to injury."
If something is broken or damaged in the apartment, the Tenant has the option of repairing
the damage himself but this must be done to the owner's satisfaction. Or an equivalent
value item may be replaced.
Item 3. "The cleaning of the premises upon termination of
the tenancy."
The Tenant wants to save the expense and do the cleaning themselves, and the landlord
wants professionally done cleaning. The Californian law
provides that cleaning can be deducted.
How clean is clean? Does it mean "broom clean" or "hotel room clean"?
Unfortunately the law does not elaborate. List down the areas to be cleaned at the expiry
of tenancy may be one way of preventing misunderstanding. Digital pictures of the
apartment or house condition before taking up tenancy may be a good idea. www.asiahomes.com provides such a service.
Item 4. "To remedy future defaults by the tenant in any
obligation under the rental agreement to restore, replace or return personal property or
appurtenances, exclusive of ordinary wear and tear, if the security is authorized to be
applied thereto by the rental agreement."
Appurtenances refer to anything and everything included in the rental agreement. Anything
from personal property items, such as a stove, to everything outside, including the garden
itself. The Tenant has to return the items, naturally, plus return them in the same shape
he has started with, less wear and tear.
The Californian landlord has 21 days after the Tenant moves out to send a detailed letter
and a check for the balance of your deposit. For more details on the law, visit www.leginfo.ca.gov.
In Singapore, the tenancy agreement usually has all the terms and conditions regarding the
security deposit, but many problems arise from the interpretation of "wear and
tear," "damage" and "cleanliness at the expiry of lease".
It is wise for the tenant to maintain an excellent relationship with the Landlord
as much of the interpretation depends on the kindness of the Landlord.
Another article: http://www.asiahomes.com/singaporehouses/
9506appeasement.htm
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