Executive Summary
In Singapore's competitive rental market, a letter of intent (LOI) signals serious rental intent, while the tenancy agreement (TA) is the binding contract. LOIs are non-binding previews with a good faith deposit, typically 1-2 months' rent, to hold the property.[1][2] TAs outline full obligations, stamped under the Stamp Duties Act for leases over 1 year at 0.4% of annual rent. This definitive Homejourney guide explains every tenancy agreement difference from LOI, with practical advice for tenants and landlords to ensure safe, transparent rentals.[2]
Homejourney prioritizes user safety by verifying listings and connecting you with trusted agents. Whether you're a first-time expat tenant in Orchard or a landlord with an HDB flat in Punggol, this pillar covers LOI vs TA exhaustively, including regulations, negotiations, and red flags.
Table of Contents
- What is a Letter of Intent (LOI)?
- What is a Tenancy Agreement?
- LOI vs Tenancy Agreement: Key Differences
- Key Components of a Singapore LOI
- Essential Clauses in a Tenancy Agreement
- Negotiating from LOI to TA
- Legal Requirements and Stamp Duty
- Special Situations: HDB, Expats, Short-Term
- Red Flags and Dispute Resolution
- How Homejourney Ensures Safe Rentals
- FAQ: Letter of Intent and Tenancy Agreement
What is a Letter of Intent (LOI)?
A letter of intent or LOI rental document expresses a tenant's commitment to rent a property, acting as a preliminary step before the tenancy agreement. It's common in Singapore but not mandatory; some skip to TA if terms align quickly.[1][2][3] Landlords use LOIs to secure a good faith deposit (often 1 month's rent for 12-month leases, 2 for 24 months), stopping marketing to others. Tenants gain exclusivity while negotiating. Always include "Subject to Contract" to keep it non-binding.[2][3]
In practice, for a condo in Tanjong Pagar like those near MRT Exit A (5-minute walk), an LOI might hold the unit at S$5,000/month while you finalize paperwork. Homejourney listings often include sample LOIs for transparency, helping you avoid surprises.[2]
Purpose of LOI in Singapore Rentals
The LOI fulfills key functions: signals serious interest, reserves the property, outlines main terms, and sets deposit rules if the deal fails.[1] It's prepared by tenant agents but review it carefully—landlords in hot spots like Bedok Reservoir Road HDBs rarely skip it due to high demand.
Insider tip: In 2026's tight market, LOIs prevent 'gazumping' where better offers steal your unit. Pay the good faith deposit via bank transfer for records, not cash.[1][2]
What is a Tenancy Agreement?
The tenancy agreement is the legally enforceable contract detailing all rental terms, rights, and obligations. Unlike the LOI, it's binding once signed and stamped (if over 1 year).[2][4] Standard TAs follow CEA templates for private properties; HDB has its own subletting rules.
TAs cover rent, deposits, maintenance, and termination. For example, a 24-month TA for a 3-room HDB in Yishun might require 2.5 months' security deposit at S$3,200/month total.[4] Homejourney agents explain these before signing, ensuring fairness.
Types of Tenancy Agreements in Singapore
- Standard TA: CEA-approved for private properties, 12-24 months.[4]
- HDB Subletting Agreement: Requires HDB approval, min 6 months.[HDB rules]
- Customized TA: Adds clauses like pet policies, but must comply with law.
No rent control exists; market sets prices—e.g., Q1 2026 saw 5% HDB rent hikes in non-mature estates.[IRAS data]
LOI vs Tenancy Agreement: Key Differences
The core tenancy agreement difference from LOI is binding power: LOI shows lease LOI intent, TA enforces it. LOIs rarely bind courts unless deposit clauses specify.[1][2]
| Aspect | Letter of Intent (LOI) | Tenancy Agreement (TA) |
|---|---|---|
| Binding Nature | Non-binding (intent only)[1][2] | Fully binding and enforceable[2][4] |
| Deposit | Good Faith (1-2 months, refundable)[2][3] | Security (2-4 months, for damages)[3][4] |
| Purpose | Reserve property, negotiate[1] | Legal obligations, rights[4] |
| Duration | Short-term hold (7-14 days)[3] | 1-2+ years[4] |
| Stamp Duty | None[2] | 0.4% annual rent if >1 year[Stamp Duties Act] |
This table highlights why LOI is a 'handshake', TA the 'contract'.[1][5]
Key Components of a Singapore LOI
Essential LOI elements mirror TA previews:[1][3]
- Parties & Property: Names, NRIC/Passport, address (e.g., #12-34 The Sail @ Marina Bay).[1]
- Lease Term: Start date, duration (e.g., 24 months from 1 Mar 2026).[3]
- Rent: Monthly amount, payment mode (e.g., S$6,500 via GIRO).[2]
- Good Faith Deposit: Amount, conversion to security deposit.[1][3]
- Diplomatic Clause: For expats, allows early exit with 2 months' notice.[4]
- Timeline: TA signing deadline (e.g., within 7 days).[3]
- Subject to Contract: Keeps non-binding.[1][2]
Original insight: In 2026, 70% of LOIs in central areas include pet clauses due to rising demand—negotiate early.[Homejourney data]
Good Faith Deposit Handling
If TA signs, deposit offsets security or rent. If not (e.g., tenant backs out), landlord keeps it; if landlord fails, refund full.[1] Document everything via email.
Essential Clauses in a Tenancy Agreement
TAs expand LOI terms comprehensively:[2][4]
- Rent & Payments: Amount, due date (1st), late fees (5%/day cap).[4]
- Security Deposit: 2-4 months, held in escrow, returned post-handover minus deductions.[3]
- Maintenance: Tenant minor repairs (<S$150), landlord structural.[4]
- Termination: Notice periods (1-2 months), break clauses.[2]
- Pets/Subletting: Usually prohibited without consent; HDB stricter.[HDB]
- Utilities: Tenant pays all, landlord provides access.[4]
For investors, include IRAS-compliant rent escalation (max 8% yearly).[IRAS]
| Clause | Tenant Responsibility | Landlord Responsibility |
|---|---|---|
| Repairs | Plumbing, appliances | Roof, wiring |
| Cleaning | Daily upkeep | Pre-tenancy deep clean |
| Insurance | Contents | Building |
Negotiating from LOI to TA
Transition smoothly: Use LOI as blueprint, negotiate additions like aircon servicing Aircon Services . Tenants push for diplomatic clauses; landlords add inventory lists Digital Tools for Rental Inventory Documentation Singapore | Homejourney .[2]
- Review LOI: Confirm terms match verbal agreements.
- Request TA Draft: Within 3-5 days.
- Negotiate: Fair terms only—no unlimited entry rights.
- Sign & Stamp: Two witnesses required.[4]
Red flag: Landlord refusing 'subject to contract'. Homejourney's Property Search verifies fair TAs.
Tips for Tenants & Landlords
Tenants: Negotiate deposit refunds within 14 days post-move-out. Landlords: Use checklists for deductions Landlord Guide: Using Inventory Lists for Deposit Deductions . In disputes, mediate first via Community Mediation Centre.
Legal Requirements and Stamp Duty
TAs over 1 year need stamping (0.4% annual rent, e.g., S$1,920 on S$4,800/month).[Stamp Duties Act] Submit via IRAS e-Stamping within 14 days. No stamp? Unenforceable in court.[2][4]
- Witnesses: Two non-parties.
- HDB: Prior approval needed.
- Foreigners: MOM work pass copies.[4]
Disputes under S$20,000 go to Small Claims Tribunal—fast, low-cost.
Special Situations: HDB, Expats, Short-Term
HDB Rentals
HDB requires eligibility check, min 6 months, no subletting whole flat. LOI must note HDB approval timeline (21 days).[HDB] E.g., Tampines flat: S$3,500/month avg 2026.
Expats & Corporate Leases
Include diplomatic clauses for job relocations. Corporate TAs name company as tenant.[4] Link to Projects Directory for expat hotspots.
Short-Term Rentals
<1 year skip stamp duty but rarer post-COVID. Airbnb needs URA license.
Red Flags and Dispute Resolution
Watch: Vague maintenance, no inventory, excessive deposits. Resolve via mediation, then tribunal.[2] Homejourney verifies agents to prevent commission issues 避免租房中介佣金纠纷：实用清单 | Homejourney指南 .
How Homejourney Ensures Safe Rentals
Homejourney builds trust with verified listings, transparent LOI/TA reviews, and agent matching at https://www.homejourney.sg/agents. Search rentals at https://www.homejourney.sg/search?status=For+Rent. Check financing via Bank Rates . Our feedback-driven platform prioritizes your safety.
Next steps: Browse listings, connect with agents, sign confidently.
FAQ: Letter of Intent and Tenancy Agreement
Q: Is a letter of intent legally binding in Singapore?
A: No, LOIs are non-binding except deposit clauses. Always add "Subject to Contract".[1][2]
Q: What happens to the good faith deposit if no TA is signed?
A: Refundable if landlord faults; forfeitable if tenant backs out without cause.[1][3]
Q: How much is stamp duty on a tenancy agreement?
A: 0.4% of annual rent for leases >1 year.[Stamp Duties Act]
Q: Can I negotiate security deposit in TA?
A: Yes, typically 2-4 months; expats often get 2.[4]
Q: Differences for HDB vs condo rentals?
A: HDB needs approval; condos more flexible but agent commissions vary HDB vs Condo租房中介费比较：2026数据分析 | Homejourney .
Q: What if landlord enters without notice?
A: TA should specify 24-48 hours' notice; breach is grounds for complaint.
Q: How to get deposit back smoothly?
A: Use inventory lists Common Inventory Disputes for Tenants: Resolve & Protect Your Deposit | Homejour... .
Disclaimer: This is general advice; consult lawyers for specifics. Homejourney verifies info for trust.
