Renting in Singapore: Expert Terms You Must Know

16/04/2019

Renting in Singapore: Expert Terms You Must Know

Renting in Singapore: Expert 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 expert terms that appear in literature about renting in Singapore.

 

Contractual Performance

This term refers to the fulfilment of requirements in the promised obligation or contractual agreement between two or more parties. If a tenant does not “perform”, it means the tenant fails to meet at least one requirement in the lease. In such a case, breach of contract occurs, and certain penalties will befall the tenant.
Depending on the terms of the rental contract, performance obligations can persist even after tenancy ends. And of course, non-performance penalties can persist past the conclusion of tenancy.

Rental Deposit Guarantee

In Singapore, this term is interchangeable with the term “Sing-Guarantee” because it is the first product of its kind in the country. A Sing-Guarantee or rental deposit guarantee is issued by us in favour of the landlord. It replaces the traditional rental deposit that the tenant must place as collateral with their landlord.
This alternative to the traditional rental deposit helps tenants—especially the expats—save on the set-up costs that come with moving to a new place. Most prominently, the tenant pays just an annual fee for the benefit of freeing up their cash instead of locking it away with the landlord.
Normally, when tenants move into their landlord’s property, they must pay a certain amount of money right away (that isn’t for their first month’s rent). That sum is known as the “rental deposit”, which is worth one month's rent for every year of lease, according to the rental industry practice in Singapore.
Its purpose is to guarantee (i.e. give a sense of security/comfort to) the landlord that the tenant will behave in accordance with the contract they have signed for the duration of their stay. If the tenant does not break any rules of the contractual agreement, they will get that locked-up money back when their rental stay ends.
However, that traditional way of guaranteeing landlords causes some inconveniences; namely, causing tenants to have less disposable income for other important expenses (e.g. healthcare) that accompany their move.

Security

The broad term for any certificate or instrument of some oral, written, or electronic agreement, issued by one party to another as a means of assuring the latter that the agreement will be carried out. More accurately, this term refers to the sense of security that the party being assured (i.e. the beneficiary of the security) is supposed to get from the value of the assets linked to the certificate or instrument in question.
In the Sing-Guarantee context, the beneficiary is the landlord, the security is the Sing-Guarantee certificate, and the issuer of the security is Sing-Guarantee.
Importantly, this term should not be confused with “collateral”: a similar term that is more specific. In the rental context, “collateral” refers to any property or asset provided by tenants to their landlords as a form of security. For example, a rental deposit is a collateral.
As far as Sing-Guarantee is concerned, this term means the same thing as “rental deposit guarantee”.

Security Deposit

In practice, this comes in the form of cash worth 1-3 months’ rent—given to the landlord by the tenant. Tenants must pay this sum before moving into their landlord’s property. The landlord should release any remainder of this sum to the tenant upon the rightful completion of tenancy (i.e. the tenant’s exit after fulfilling the tenancy agreement or contract).
In other words, this term can be used interchangeably with “rental deposit”, “cash deposit”, and “cash bond”.

Security Deposit Guarantee

A guarantee in the form of a certificate or any document that promises financial reimbursement to a landlord for any loss arising from tenant-related misgivings. This is a replacement of the assurance that landlords traditionally get from holding on to security deposits paid by their tenants.
In other words, this term is the long-winded form of “security”, which thus makes it a synonym of the terms “rental deposit guarantee” and “Sing-Guarantee”.

 

Want to know more terms? Here are basic terms and hard 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.