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LEGAL
OBSTACLES, HASSLES & PROCRASTINATION
A brief report on common legal hassles encountered by expatriates
relocating to Singapore is presented in response to numerous
expatriate queries and emails.
Corporations usually have their own standard tenancy agreement
with many conditions unfavourable to the Tenant. These are:
1. The Tenant to pay Goods and Service Tax (GST)
on the rent and the maintenance fees of the condominium. The fees
are paid by the Landlord but the lawyer will try and make the
Tenant pay the GST. If the Tenant is a corporation, it can claim
back the GST, but if the expatriate himself is the Tenant, i.e. a
personal lease, the expatriate incurs additional rental costs.
2. The Tenant to pay any increase in the maintenance fees
during the term of the lease. The expatriate may limit the
increase to, for example, 5% per annum. Or find another privately
owned property to rent. Maintenance fees are not increased
arbitrarily and monthly, as they have to be approved by the
authorities.
3. The Letter of Intent sent in by the Tenant's realtor on behalf
of the Tenant lists all items and services to be performed by the
prospective Landlord. It is usually ignored by the corporate
Landlord who may issue his own "Letter of Offer"
which may have some different terms and conditions.
4. The Landlord insists that the Tenant pays an additional
rent if the assessed value of the property is increased by the
Comptroller of Property Tax. This is seldom seen in the
tenancy agreement but there is one corporate landlord insisting on
this condition.
Case study 1.
In this case study, the penthouse is rented to the Company which
is the Tenant. However, the Company's employee is the Occupant and
any negotiations will affect him directly although he was not
consulted by the Company human resource manager and lawyers.
"You had been slip-shod in your services!"
one angry American said to me when he asked whether the tenancy
agreement to be signed by his Company and the corporate Landlord
had references to the terms of the Letter of Intent. The corporate
Landlord had used his "Letter of Offer" ignoring the
Letter of Intent and some of the terms and conditions requested by
the Occupant (employee of the Company) were ignored.
I was by-passed because the lawyers of the Tenant, this being a
corporate lease and the Landlord dealt with each other. There was
a possibility that the terms and conditions of the Letter of
Intent approved by the expatriate (in this case, an Occupant)
were overlooked.
In law, the Landlord could say that the tenancy agreement would be
binding and if it did not take into account the terms and
conditions of the Letter of Intent, there would be no compromise
after the tenancy agreement was signed.
It must be quite frustrating for a top manager to make such a
remark and I could understand that it was due to the stress of the
negotiations and the long time it took for lawyers to handle such
cases. The Tenant's lawyer was very abrupt to me shouting
why I told the Tenant's executive not to issue the cheques for the
deposits.
I told her that the Landlord's executive said that the terms were
not approved yet and therefore there was no point in preparing the
security deposit. That was what I was told, but the real dealings
were between the lawyers. Much time had had been spent on the
legal technicalities and somehow this lawyer became angry.
Just 5 days ago, the Landlord's executive just told me point
blankly: "The deal is off", because it
was costly as the lawyers of the Landlord spent much time on
fleshing out the details with the Tenant. I had to salvage and see
what could be a compromise.
Case study 2.
This was one case where the Landlord wanted the Tenant to service
the air conditioners and the roof top jacuzzi and the
Tenant did not want to do so. This disagreement could just make or
break a case. The rent of $16,000 was deemed too low by the
Landlord who probably hoped for a higher offer during the six
weeks of legal tussle.
Case study 3.
"Dry clean the curtains quarterly or the deal is off"
was another situation for the expatriate to handle. In this case,
the Occupant agreed to dry clean at the end of 12 months. Most
importantly, his wife liked it.
Case study 4.
Payment of legal fees to the Landlord's lawyer
for the preparation of the lease. This is one condition imposed by
some private individuals as well. Usually, each party pays his own
legal fees. Realtors should include this condition in the Letter
of Intent.
Case study 5.
Minor repairs of $250 per item per occurrence
imposed by the Landlord. The amount can be negotiated. $150 is
more common.
Case study 6.
Diplomatic clause of 6 months or even 2 months.
Many Landlords will not accept less than 12 months of occupancy
but the expatriate can try his luck. If the expatriate asks for
such terms, it indicates that he is in an unstable employment
situation and most Landlords will prefer not to get involved.
Case study 7.
Some airline pilots have this short notice clause to break the
lease by giving one month's notice as demanded by their company
which will be the Tenant. Landlords may have to take the risk.
Case study 8.
Payment of property tax. Somehow, the corporate
tenancy agreement would have this term squeezed in. It is
definitely not an industry's practice for residential leases and
not acceptable by the Tenant.
Case study 9.
"You are on your own" if the Landlord
does not agree to use the Company (Tenant) lease, one Englishwoman
working for an oil company was told. That means corporate
Landlords are not advised as they tend to insist on the use of
their tenancy agreement and are reluctant to make amendments as it
would be costly.
However, as a newcomer expatriate, use your common sense. Many
times, the loss of a choice property is due to the expatriate's
procrastination or lack of time. In one case, there was an
expatriate who got a beautiful Blair Road shophouse for a 6-month
plus 2 months notice. This was unusual for a Landlord to
rent out his brand new shophome for a short lease of only 8
months. He wanted to see the place the 3rd time and only at
7 p.m on weekdays.
He lost the place to another expatriate.
If you need more information, contact judy@asiahomes.com
or tel: +65 668 6468.
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