What is a tenancy?
A tenancy has the legal effect of transferring an interest in land from the landlord to the tenant. It means that for a certain term at a determined rent, the tenant has exclusive possession of the premises.
Typically, the duties of the landlord and tenant are found within the terms of the tenancy agreement.
A breach of any of these terms potentially leads to the termination of the tenancy, resulting in several types of remedies available for both landlord and tenant.
Types of tenancies in Singapore
In Singapore, tenancy takes the form of leases or licences.
A lease is not the same as a licence. A lease gives the tenant a proprietary interest in the land.
A licence is only a personal arrangement between two parties, where the landlord has given the tenant a personal permission to use the premises for a short period of time.
A lease offers the tenant the common law rights of assignment to a third party (depending on the property) and is capable for binding a third party.
Further, if the tenancy takes the form of a lease, a tenant may sue in an action for nuisance or trespass. A licensee does not have such rights to assign the premises to a third party, nor sue for nuisance or trespass.
Special restrictions apply to the renting out of Housing and Development Board (HDB) flats, such as a minimum occupation period.
Generally, a lease should not be less than 6 months in duration. For example, you may be in breach of Singapore’s housing laws if you rent out your property for short periods of time on Airbnb.
The tenancy agreement
It is important to know the terms within the tenancy agreement.
Most tenancy agreements will contain terms that give the tenant quiet enjoyment and exclusive possession. Hence, the landlord must allow his tenant to occupy the premises exclusively, without any intrusions and disturbances from outsiders.
The landlord cannot grant a lease of his premises on terms that effectively or substantially negative the utility of the grant. For example, if a landlord leases a store space to a tenant within a shopping mall, he must not prevent the entry of customers into the building.
Similarly, a tenant will have responsibilities under the tenancy agreement too. For example, a tenant has to pay regular rent and may have to agree not to assign the lease to another person. He may also have to bear the costs of any repairs which may be necessary in the course of the tenancy.
Should there be ceiling leakages, faulty electrical appliances, or peeling paint, either the landlord or tenant may bear the burden of repair, depending on their negotiations.
Hence, the tenancy agreement sets out the duties of the landlord and tenant at the start of the tenancy, and prevents such disputes from arising.
Ending a tenancy early
A tenancy may be terminated only when either the landlord or tenant gives the appropriate notice to quit the tenancy. The appropriate period for notice to quit should correspond with the length of the tenancy period, and may be inferred by the frequency of rent payment.
For example, for a tenancy where rent is paid monthly, the appropriate period of notice should be one month. The common minimum notice period is 30 days. To be safe, check your tenancy agreement.
If you are a tenant, you should not end the tenancy prematurely without notifying the landlord. If you wish to surrender his lease, you have to obtain the consent of your landlord. While the landlord is not obliged to accept the surrender, he may request for monetary compensation from you.
To guard against the premature termination of a tenancy by your tenant, some landlords request for a security deposit equivalent to an additional month’s rent.
Landlords have to establish the parameters of the tenancy agreement with the tenant and find out the likelihood of a premature termination of the agreement.
Where a tenant has breached the terms of the tenancy agreement, such as by his failure to pay rent, a landlord may forfeit the tenancy and re-enter the premises to evict his tenants.
What does forfeiture entail? It means that the landlord can obtain possession of the premises either by effecting a peaceable entry by himself, or by process of law through an application to the court.
Generally, forfeiture will not be invoked unless the tenant fails to pay up despite being given opportunities to do so.
To re-enter the premises, the landlord needs to make a formal demand for the tenant to leave the premises.
If the tenant does not submit, the usual practice is to invoke the services of a solicitor to issue a writ of summons for possession, and begin legal proceedings for taking possession. To do this, the landlord should make sure that he has expressly stipulated a right of re-entry in the tenancy agreement.
The landlord must also serve a notice, under section 18 of the Conveyancing and Law of Property Act, specifying the breach complained of, the compensation sought, and the remedy to be undertaken by the tenant.
However, a tenant may also apply to the court for relief against the forfeiture of his lease. As forfeiture is an extremely harsh remedy, courts will give the tenant a reasonable time of an additional four weeks for the tenant to pay rent.
Collecting unpaid rent
One solution for the landlord who is owed rent is to exercise his right to distress under the Distress Act.
The right to distress is a remedy for the arrears of rent where the landlord must apply for a writ of distress, where he can claim up to 12 months’ arrears preceding the distress application.
It is important to note that the landlord should act on the matter swiftly and not take his own time in claiming the arrears. After which, a notice of seizure of goods and writ of distress must be sent to the defaulting tenant. If the tenant does not reply within five days, the landlord may exercise his option to sell off the goods.
As there is no comprehensive law governing landlord-tenant relations, much depends on the tenancy agreement. There is no one set of legal process for evicting tenants.
As a matter of precaution, always review the terms of a tenancy agreement before entering into one.
This article was first published in SingaporeLegalAdvice.
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