In this article, we will discuss the formal requirements of a tenancy agreement[1] so that it is legally valid and you can enforce it against the other party. In a subsequent article, we will be dealing with the essential terms and conditions in a tenancy agreement.

• Requirement of Writing and Signing

When you enter into a tenancy – whether as a landlord or a tenant – it is best to have an agreement that is in “writing” and “signed” by the parties.

For convenience, the agreement may provide for execution in counterparties. This would allow the parties to sign separately and on different copies of the same document. The signatures are not legally required to be witnessed, but this is a good practice to guard against a claim by the other party that he or she did not sign the agreement. The witness should be at least 21 years old.

If, for some reason, there is no signed agreement in writing, it may suffice to have some memorandum or note capturing the essential terms of a tenancy agreement. The memorandum must be in writing and signed by the other party, so that you can enforce the agreement against him or her. Beyond these requirements, the memorandum need not take any special form: it can be a letter, a company’s minutes, or an entry in a book.

We now take a closer look at the meaning of “writing” and “signing”.

“Writing” is statutorily defined to include printing, lithography, typewriting, photography and other modes of representing or reproducing words or figures in visible form. Nowadays, most of our written correspondence takes place via e-mail and text messages. These will satisfy the requirement of writing since they are words in visible form when displayed on the computer screen or mobile phone screen or when printed out.

As for the requirement of “signing”, the law does not require signatures to be handwritten or in wet-ink. A signature in typewritten or printed form is sufficient to satisfy the signing requirement. You may wish to read our article on electronic signatures for tenancy agreements, which can be accessed using this link.

The takeaway is to ensure that your tenancy agreement is in writing and signed. If you merely have an oral agreement without any written evidence at all, you may find it challenging to enforce the tenancy agreement against the other party.

• Requirement of Stamping

A tenancy agreement must be stamped with the Inland Revenue Authority of Singapore (IRAS) – i.e. stamp duty must be paid on a tenancy agreement.

• How much stamp duty is payable?

Stamp duty is assessed at the rates set out in the table below, based on the average annual rent (AAR). AAR is the average of the annual contractual rent or annual market rent, whichever is higher. It also includes payments for furniture charge, maintenance charge, service charge and any other charges, but excluding GST.

• Who is liable to pay stamp duty?

Parties can contractually agree between themselves who is to bear stamp duty. If there is no agreement, the default position is that the tenant shall bear the stamp duty.

• When is stamp duty payable?

A tenancy agreement must be stamped before it is executed.[2]

However, a penalty will not be charged if the tenancy agreement is stamped (i) within 14 days after it has been first executed in Singapore, or (ii) if first executed outside Singapore, within 30 days after it has been first received in Singapore.[3]

• What if the agreement is not stamped, insufficiently stamped, or not promptly stamped?

If the tenancy agreement is not stamped, it cannot be admitted in evidence in court. This means that you may find it challenging to enforce the tenancy agreement against the other party. It is in the interest of both parties to have the tenancy agreement stamped.

If there is a delay in payment of stamp duty not exceeding 3 months, the penalty imposed is $10 or an amount equal to the duty payable (or shortfall, as the case may be), whichever is greater. For such delay exceeding 3 months, the penalty imposed is $25 or 4 times the amount of duty payable (or shortfall), whichever is greater.

In our next article, we will discuss the essential terms that should find its way into your tenancy agreement.

Authors:

Jacqueline Teo, Senior Associate, Wee Swee Teow LLP

Lee Chang Yang, Senior Associate, Wee Swee Teow LLP

Disclaimer: While every effort has been made to ensure the accuracy and completeness of the above information, which was prepared on 1 February 2021, no guarantee is given nor responsibility taken for any errors or omissions. The information does not constitute professional advice and should not be relied upon as such.

[1] Please note that tenancies exceeding 7 years will have to be by deed in the English language (see Section 53 of the Conveyancing and Law of Property Act (Cap. 61)) and registered with the Land Title Registry (see Section 87 of the Land Titles Act (Cap. 157)). For the purposes of this article, we will not go into the details.

[2] Section 42 of the Stamp Duties Act (Cap. 312)

[3] Section 46 of the Stamp Duties Act (Cap. 312)

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