1129Singapore Real Estate, Cuscaden Tower,  Rental Houses, Apartments, Condos, Homes Singapore Classifieds, Internet Property Advertisements published by: Asiahomes
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Report written in August 1998.
Integrity Issues for the Landlord..

What should the Landlord do when the Tenant asks for benefits like maid services, payment of utilities and the Relocation Consultant or Introducer asks for monthly management fees ?

Rental Update:
Nov 1999.

No longer available for rent. In November 1999,
Cuscaden Tower was sold for $86 million ($883 per sq. ft per plot ratio including development charge. The 38,412 sq. ft
site can be redeveloped into a 30-storey luxury apartment project.

4-bedroom: 350 sq. m
Penthouse: 661 sq. m. There is a swimming pool.

Interiors:
Spacious living and separate dining areas - marble tiles.
Bedrooms - wool carpet unless renovated.

Facilities: Swimming pool, 24-hour security, squash court, covered car park and barbecue area.

Competitors:
Parisian (27 units) at Anguilla Park. The Claymore (146 units). Few city condos have 4 bedrooms with such large living areas.

Investors to note:    Freehold.  Not for sale. Enbloc sales done in November 1999.

Advantages:

Great location. Orchard Road location and within 10-minute walk to the Orchard subway and the American Club/Tanglin Club.

Low density (16 units only).

One unit/floor. Maximum privacy. No need to greet neighbours.

Four-bedroom units only and very spacious. 

Disadvantages:

Dated. No gym, tennis court.

 

Case Study:
Report written in August 1998.
Integrity Issues for the Landlord..

What should the Landlord do when the Tenant asks for benefits like maid services, payment of utilities and the Relocation Consultant or Introducer asks for monthly management fees ?

Case 1.

"This is not Vietnam, this is Singapore!" reiterated the Singaporean realtor in charge of a house in Vanda Link when the Asia USA associate asked whether her client was willing to provide monthly fees to pay for the maid.

"We have our integrity and we don't deal with such prospects (and lose our agency licence). "The CPIB (Corrupt Practice Investigation Board of Singapore) would consider this practice corruption……" No money goes to the Tenant or Asia USA but the Landlord would foot the bills. The Landlord's agent considered this corruption and refused to entertain the Asian tenant further.  No problem. There were other houses for rent in the year of recession 1998.

"We are not comfortable in paying the utilities bill (out of the rental payment)" said a Taiwanese Owner of Costa Rhu.  Another case was thrown out. As Costa Rhu has so many listings, it was not difficult to find one Landlord agreeable to this practice.

Case 3.

"We have so many properties and have not encountered such a situation. It is a kickback to the relocation consultant!" said a ruffled Singaporean Owner of Costa Rhu.

The relocation consultant to this American firm wanted $500 from the $4,500 rental to be paid to the firm billing via monthly invoices and receipts if they proceed to closure of the case.

The Landlord was happy with the $4,000 rental and a good corporate lease.

However, the wife was saying that Australian Realtors managing the unit charges only 6% of the rental while the relocation consultant was charging around 20%.

This is besides the point as in this case, no management fee was charged for the $4,000 rental received.

The $500 was asked by the Consultant advising expatriate rentals and relocation.

The "management fee" was an incentive for the Introducer to recommend the unit (and it had been over 3 months without any interest in this ground floor Costa Rhu unit). The unit had been advertised by the Landlord and by Asia USA (3 times/week in the Straits Times with poor response).

The Landlord had a high mortgage interest to pay.

All investment condos cannot be vacant for longer periods as mortgage interest must be paid.

It can be considered an expense and although it constituted 20% of the rental, there are no statutory regulations, as far as Asia USA is aware of, limiting the amount of management fees to be paid to a relocation consultant in Singapore's free market.

Whether this is a kickback or not is debatable as the Consultant has had provided services to the American couple, accompanying them on house inspections with the co-broking agent.

Conclusion.
If your condo is on the ground floor and faces the afternoon sun, it is usually unpopular because of the perceived lack of security, privacy and not being able to enjoy  the hot terraces or patios in the afternoon.

Once you get a Tenant after a prolonged period of vacancy, it may be good to be flexible.

Tax implications, rather than corruption is the crux of the matter for most sophisticated Landlords.

Management fees are tax-deductible as the services provided are bona fide.

Provision for maid services under Management fees may also be tax deductible. Please consult your own Accountant and Auditor.

In the end, early occupancy and more taxes to be paid are more important.

Integrity is important too but there does not appear to be any corruption in paying management fees.