Renting in Singapore: Hard Terms You Must Know

05/04/2019

Renting in Singapore: Hard Terms You Must Know

Singapore is famous for being one of the world's most expensive cities to live in. As a foreigner, if you seek to begin a new life on this warm island-nation, you will have to deal with renting—a costly and potentially complex issue—whether you like it or not.
To simplify things for you, we have gathered into a few parts rental terms you must know. In this part, you will find hard terms that appear in literature about renting in Singapore.

Bond

A written, legal instrument issued by some organisation with political and/or socioeconomic clout (e.g. a corporation or government body) to an individual or collective entity. It serves as proof of debt owed by the individual or collective entity to the organisation; if broken, the former will face some sort of penalty—typically monetary—that can be legally enforced by the latter.
To put it in context, when expats in Singapore have their rent sponsored by their employer, they are typically bonded to the employer. Should the bond be broken by, for example, earlier-than-expected resignation, the expat in question will have to pay back the debt owed to the employer. The payback is almost always in monetary terms.
(This is also probably your last name, if you are a British expat from MI6 on assignment in Singapore.)

Cash Bond

A bond that, upon creation, requires some amount of cash—not necessarily in physical form—from the bonded entity (e.g. tenant) to be held by the bond issuer (e.g. landlord). It functions as security against the bonded entity’s potential non-performance of the agreement set out in the bond. If broken, the cash in question will be consumed by the bond issuer—typically in full. The exact amount to be consumed ultimately depends on the terms of agreement in the bond.
In the rental context, this term can be used interchangeably with “cash deposit”, “rental deposit”, and “security deposit”.

Guarantee

An umbrella term that covers any financial instrument used to assure, secure, or reinforce a promised obligation or contractual agreement between two parties. For example, a bond is a form of guarantee that is usually asset- or equity-based. One agreeing party is the guarantor while the other is the beneficiary of the guarantee.
When renting in Singapore, this term is sometimes used as a shorthand for “rental deposit guarantee”.

Guarantor

A participant in a two- or multi-party bond, who is the one backing the party contractually obligated to perform, in a manner that mitigates the risks for the issuer of the bond. Mitigation of the risks typically comes in the form of a promise to reimburse financially the bond issuer (e.g. landlord) for whatever losses they may experience with regards to the assets.
A guarantor’s (e.g. Sing-Guarantee) responsibility to the beneficiary of the guarantee (who is the same party as the bond issuer) is to fulfil all requirements of the promised obligation or contractual agreement in question, only in the event of default of the party being guaranteed (e.g. tenant).

Lease

In Singapore, this term is used interchangeably with “rental agreement”. It refers to a rental contract between a landlord and a tenant. The terms and conditions involved are highly variable, especially when it comes to the minimum length of tenancy that the tenant must commit to: a period of one year is common. However, a shorter period of 3-6 months, or a longer period of 2-3 years is possible as well.
As a tenant, you should examine the terms and conditions of any lease to ensure that they are in line with your rental expectations. You are the only one who can decide for yourself what minimum length of tenancy (or any other requirement to meet) is suitable for your current circumstances.

FIN

The acronym for “Foreign Identification Number”, this term refers to the unique 9-digit code issued to any foreigner with an immigration or work pass by Singapore’s Ministry of Manpower (MOM) or Immigration and Checkpoints Authority (ICA).
If an expat intends to remain a foreigner rather than become a Singaporean citizen or permanent resident, this string of numbers (or their passport) will consistently be asked for in the rental application process.
Importantly, this is not the same thing as a work visa. Refer to this handy breakdown of the different passes available to foreigners who intend to work in Singapore.

NRIC

The acronym for “National Registration Identity Card”, this term refers to the identity document issued by Singapore’s government to Singaporean citizens, and foreigners who are permanent residents of Singapore. It comes in pink for Singaporean citizens, and blue for the permanent residents.
If an expat becomes a Singaporean citizen or permanent resident, this identity document will replace the passport or FIN in the rental application process.

 

Want to know more terms? Here are basic terms and expert terms you must know when renting in Singapore. If you still have questions about any terms after reading, please don’t hesitate to contact Sing-Guarantee for more information.

 

 

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