For the month of October 2017, Asia Law Network is collaborating with 99.co to bring great property-related legal content to readers of their blog written by Asia Law Network Premium Lawyers. In the second article of the series, Raina Chugani from Lalwani Law Chambers answers the top 10 Frequently Asked Questions (FAQs) about landlord-tenant disputes that they hear from both landlord and tenants as lawyers.
~10% of Singapore population skilled expatriates
Singapore is a popular destination for expatriates to live and work in. Talent from all over the world come to Singapore with different types of employment passes, and some of them are PRs (permanent residents) to pursue their career. BBC reports that expats call Singapore a utopia because of the incredible convenience that comes with living and working in Singapore.
There are about 1.34 million foreign workers in Singapore, a country with a population of 5.6 million in 2014 (that is about 24%). Of these, there are approximately 600,000 professional and managerial workers who are here on employment pass. This translates to about 10.7% of the population being more skilled PMET expatriates.
Expatriates in Singapore typically rent
While Singapore comes with many conveniences, one of the downsides is that it can be comparatively expensive to live in Singapore compared with other countries in the region. One of the larger ticket items that expatriates have to pay for is rental in a land-scarce country where real estate can be quite expensive.
It may be impractical for an expatriate who is here for a contract role of 1-2 years to buy property when renting gives a lot more flexibility and is likely to be more economical for them. Some of the expatriates here might be students at local universities or MBA programs like at INSEAD at one north in the west, near the startup hub Blk71 who might rent for even shorter periods of time from 3-6 months up to a year.
Landlords refusing to return security deposits – a common source of disputes between landlords and expatriate tenants
Landlords in Singapore usually require tenants to provide a sum of money at the start of a lease as a security to ensure that the tenant performs the lease and returns the property in an acceptable manner.
In the event of the tenant’s default, the landlord may use the security deposit in accordance with the lease to mitigate the landlord’s loss. At the end of the lease, the landlord is obligated to return the security deposit to the tenant, less any deductions that the landlord is allowed to make under the lease agreement. You can read more about security deposits in this article by Wayne Ong for Asia Law Network.
A common dispute that arises between landlord and expatriate tenants is when landlords refuse to return their tenant’s security deposit.
These rental deposits can often be substantial sums of money, and for students who might pay a lower rental for a smaller unit or a room, it can represent a lot of money to them vis a vis their non-existent or paltry income.
Tenants lament that landlords are often unfair about this, and cite reasons that do not seem fair to them.
Do landlords really take advantage of expatriate tenants?
Expatriate tenants often perceive that landlords might be taking advantage of them because landlords know that they are expatriates, and are therefore less likely to stand up for their rights.
This is because they are not as familiar with the law in Singapore and therefore less likely to have the confidence or resolve to bring this dispute to the next level. It may be even more challenging if the landlord knows that the tenant is leaving soon to return to their home country or another country, and therefore won’t be around to take the necessary steps to speak with lawyers or physically show up at a Consultation or Hearing at the Small Claims Tribunal to plead their case.
Considering the above-mentioned factors, it may be a legitimate temptation and incentive for landlords to push the envelope in not returning a security deposit and expect a tenant to give up reclaiming what is owed to them.
Some mixed marriage couples even go so far as to make sure that the Singaporean or Asian partner is around to make the rental payment to the landlord to reduce the exposure and risk that the landlord knows that his or her tenant is an expatriate and therefore be tempted to take these actions.
It is easy to understand how expatriates might be frustrated and outraged at this sort of prejudice.
So, is there any truth to these claims?
Whether this is true or not, this situation may encourage bad behavior by expatriate tenants
There are several tight-knit expat communities in Singapore on Facebook and other forums and they often commiserate on this happening. Expatriate tenants who think this might happen to them may be tempted not to pay their last month of rental because they think that their landlord will do this to them, which in truth likely not permitted in their tenancy contract. Tenants are expected to pay until their final month of their tenancy agreement and the security deposit is refunded after the landlord has taken back the property and verified that it is in good condition according to the agreement. Withholding the final month of rental on the assumption that the landlord will not return their security deposit is unfair to landlords who deal in good faith.
A tenant’s perspective
Jean*, an expat, who has since returned to her home country said, “We are advised on expat forums to conveniently not pay the last two months of rental as there is little hope of us getting back our security deposit from the landlord once we return home. This has become the unspoken ‘rule of thumb’ most of us follow. It seems as if Singapore landlords think that it’s their right to withhold the security deposit to fix progressive wear and tear in the rental premise and charge it to the tenant. Rather than to have to risk losing any money and acceding to someone else’s unreasonable demands, I’m quite happy to contra off the two months security deposit in lieu of two months of rent.”
A landlord’s perspective
Andrew*, owner of a 2-bedroom apartment in Robertson Quay has this experience to share, “I had a tenant who left multiple unremovable wine stains on the marble flooring and hid it under a carpet during the handover. I scolded my agent for overlooking that. Who’s going to foot the bill for polishing the marble in order to get rid of the stains? He’s already long gone, so I might as well use the security deposit to clean up my marble floor. I think he expected that to happen because I haven’t heard from him since he vacated my premises. If he does contact me, I am going to scan a copy of the polishing bill from the contractor and attach all the photographic evidence.”
A lawyer’s perspective
Lawyer Wayne Ong shares a legal perspective: the law in Singapore leans towards landlords rather than tenants (foreign or local). He also suggests carefully thinking through if the effort to recover your deposit is worthwhile:
“Depending on the value, it may not be economical for a tenant to sue to recover his security deposit as his legal costs may exceed the security deposit. Even when the value of the security deposit justifies legal proceedings, it can be difficult for a tenant to sue when he is no longer in Singapore, or if he is unable to commit the time and effort to manage legal proceedings. In this sense, the law favours landlords in Singapore, as the tenant has to expend resources to recover his money.”
So, what can you do to prevent this?
Wayne provides great tips for this in this article for Asia Law Network.
It is critical that you plan for this right at the beginning, and not after you already signed your tenancy agreement. You should start by scrutinising your tenancy agreement and suggest changes to terms that you may feel uncomfortable with. It is likely that you as the tenant are required to keep the property in good and tenable repair, but if the agreement is worded too vaguely or in the landlord’s favor it may give your landlord just cause to withhold your security deposit. You might consider asking a lawyer friend or getting a Quick Consult (practicing lawyer will call you back within 1-2 days to answer your questions) with a lawyer to check if a clause is fair before you bring it up to your landlord.
After you are satisfied with your tenancy agreement that you drafted with your landlord and has signed it, the next step is to be conscientious in taking over the property. Be meticulous here. Go through the inventory of what you are taking over and take lots of photographs of the condition of the property and any furniture within. Immediately point out any defects and note the condition of the property. Document this carefully and put it aside – you will likely want to refer to this when you end your tenancy and hand over the apartment back to your landlord, or if a dispute arises.
OK! You’ve moved in and made yourself comfortable in your new home. If you notice any defects or damage, it may be the landlord or someone else’s obligation (e.g. apartment management or MCST) to fix such as leaking pipes, faulty electrical fittings, mold or damage caused by neighbours. Be sure to immediately highlight this to your landlord in black and white.
Lastly, when it is nearly time to end your lease, you should arrange for the landlord to inspect the property. Keep your initial photographs and notes handy for this meeting and review the condition of the property and reach an agreement if you are obliged to carry out any repairs, and get it done before the handover date to facilitate the process. The tenant should confirm with the landlord in writing that (i) the property is returned in a satisfactory manner and (ii) there are no outstanding debts due to the landlord, before giving back the keys.
Being a conscientious and organised tenant will also reduce the chances that your landlord will feel he can take advantage of you. You are also making life easy for your landlord and he or she may take this into account in dealing with you.
This already happened to you, what can you do now?
If you feel that your security deposit may be wrongfully withheld, you may apply to the Small Claims Tribunal (SCT) to recover your security deposit.
To qualify to apply to the Small Claims Tribunal:
- The lease is a residential lease that does not exceed two years,
- The value of the claim is less than $10,000 and
- The claim is made within one year from when the security deposit ought to be returned.
Starting 10 July 2017, the Small Claims Tribunals allows parties involved in disputes to file claims and access Court e-services from the comfort of their homes or any place with an internet connection via CJTS (Community Justice and Tribunal Systems).
A consultation date will be fixed for parties to appear before the Registrar in Court to access if the claim is within the Small Claim Tribunal’s jurisdiction, give the parties an opportunity to discuss their views and resolve their dispute amicably and where this is not possible fix a Hearing before a judge or make orders as it deems fit. This may be challenging for tenants who are no longer in Singapore.
In most other cases, the tenant will have to apply to litigate to recover his security deposit. It is also important to note that the lease agreements usually restrict the mode of dispute resolution. In such a case, the tenant should follow the dispute resolution process set out in the agreement.
While there are merits to negotiating an amicable resolution, if in doubt, parties should seek legal advice to ascertain their rights.
Speak to Wayne about tenancy disputes
If you have questions on tenancy disputes, you can get a Quick Consult with Wayne or other lawyers. With Quick Consult, you can check out in minutes and for a transparent, flat fee of S$49, the lawyers will call you back on the phone within 1-2 days to answer your questions and give you legal advice.
This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to a practicing lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in or to any constituent part of Interstellar Group Pte. Ltd. accepts or assumes responsibility, or has any liability, to any person in respect of this article.