Tenant’s due diligence

By Viktor Chong 

Do your due diligence before signing

Do your due diligence before signing the deal

Most people assume that a tenancy is merely the act of the tenant paying his or her rent on time to the landlord. But, it is not just that. A responsible tenant should consider and take the necessary steps to protect their self-interest. Here are a few things you can do:

1. Are you talking to the owner of the house?

Rightly, a landlord is the person who can form a binding contract with a tenant. SP Chen, Leong & Partners lawyer Jimmy Kwok provides his advice to future tenants.

“As a tenant, you need to know if the landlord is the owner of the property. Legitimate ownership can be known by requesting to sight the property title, (if the individual title has been issued by the relevant authority), or the latest Sales and Purchase Agreement (if the individual title has yet to be issued by the relevant authority). In the case of the latter, the name of the landlord should correspond with the name on the document,” he said.

Messrs Eunice Tan & Partners founder Eunice Tan Mui Lee added, “The tenant can also instruct his or her agent/lawyer, to do a land search of the property. A bankruptcy or company search will reveal if the landlord is bankrupt or the company has been wound up (whichever is applicable),” she said.

2. Can you deal with anyone who is not the landlord?

According to Kwok, the tenancy agreement shall be signed by the landlord in any event. However, an agent can be used as an intermediary if properly appointed by the landlord. Even so, the tenant should still take all reasonable steps to determine the owner of the property.

“The owner may execute a power of attorney by appointing his representative to act on his behalf in renting out the property, signing the tenancy agreement and also carrying out duties under the tenancy agreement etc. Please note that the power of attorney is a powerful legal document which is required to be registered at the High Court,” he said.

3. The tenancy agreement

“A tenancy agreement is a contract freely entered between the landlord and the tenant on their agreed terms. Hence, the tenant can negotiate with the landlord to include additional clauses to protect his or her rights. Subject to the landlord’s agreement towards the added clauses, it will be bind to the parties when the tenancy agreement is properly executed,” Kwok said.

According to him, the tenant should pay extra attention towards the duty and covenants of the tenant when reviewing the tenancy agreement.

“These are obligations and responsibilities which the tenant should do to fulfil the terms of the tenancy agreement. For example, the duty to pay rent, not to make any structural alteration and not to sublet the property.

“The additional clauses shall be on a case by case basis, depending on the needs of the tenant. For instance, if the tenant intends to sublet the property, he or she shall ensure that there is no such restriction in the tenancy agreement,” he said.

Tan added, “The tenant should look into the termination clause. When the tenant intends to terminate the agreement, what are the procedures to be followed to terminate the tenancy in accordance with the contract?

“Other than that, the tenant should also look into the tenant’s obligations so that he or she will not breach any of it. If there is a breach, the landlord has the option to terminate the tenancy agreement based on the terms and conditions stipulated therein,” Tan said.

4. Spell it out

Kwok also suggested that the tenant lists out the fixture and fittings on the property and annex it to the tenancy agreement.

“If the landlord agrees to maintain or include specific fixture and fittings, this will prevent the landlord from going against his or her words (for example, removing particular fixture and fittings which he or she has agreed to be maintained on the premises). This also allows both parties to avoid a possible dispute on any missing items at the expiration of the tenancy,” he said.

Kwok further suggested that the tenant should take photos of the fixture and fittings, damages and interior of the property. A copy of this collection of photos can then be emailed to the landlord with the date recorded. This is to protect the tenant. It ensures that any damages to the property occurred before the commencement of the tenancy is appropriately documented and communicated to the landlord.

“Same as the previous scenario, we do this to ensure the landlord does not blame the tenant for any damages that have occurred before the beginning of the tenancy,” he said.

To Read More: Ask Me Anything: Dealing with rebellious tenants

To Read More: Ask Me Anything: Dealing with rebellious tenants- Part 2

To Read More: How to legally deal with a tenant when they do not pay up

To Read More: Ask Me Anything: Tackling tenants and landlords issues

To Read More: What are your rights as a tenant?

To Read More: Tackling tenant-landlord issues and leasehold renewal cost calculation

To Read More: Ask Me Anything: Who is responsible for IWK bills, wiring and piping issues in a rented property?



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