Relocating, moving, diplomatic clause

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deemi786
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Relocating, moving, diplomatic clause

Post by deemi786 » Tue, 10 Aug 2010 10:23 pm

I need some help if possible people.

Unfortunately myself + family may have to relocate back to the UK so we are currently weighing up options.

I asked my agent what the case was with us and how much we would have to pay/not pay if we decided to leave early and she gave me the following mail regarding the diplomatic clause and/or other options.

"Regarding the diplomatic clause, it’ll keep you here till Jan. However, you still need to pay pro-rated Landlord’s agent commission on the unexpired portion of your lease (ie. 10 months left) on the calculation of:
$4600/24 x 10mths remaining = $1,916.67

If you really need to leave, perhaps we can ask the Landlord to consider letting you find a replacement tenant (to his approval) so that he can release you. You will have to cover the cost of the agent’s commission though (one month’s rent)."


Just wanted to know if she is in fact telling the truth, heard some stories of dodgy agents trying to get money of us poor expats!

Any advice would be appreciated, in the meantime im scouring the forum trying to get some answers..

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Post by Mad Scientist » Wed, 11 Aug 2010 6:41 am

From my understanding this is not the case. IMHO the agent is trying to pull a fast one on you. I maybe wrong on this. Saint has more exposure to this

Read this link to get more info
http://forum.singaporeexpats.com/ftopic ... tion+lease
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Post by x9200 » Wed, 11 Aug 2010 7:52 am

OP, this is not true unless you have it explicitly stated in your tenancy agreement. On more practical side they will likely try to deduct it from your deposit. As you are leaving the country your only choices could be not paying the last rents (there are some risks involved) or be convincing enough that even you are gone you still going to sue them if the deposit is not paid back in full.

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Post by Saint » Wed, 11 Aug 2010 8:53 am

deemi786 wrote:
"Regarding the diplomatic clause, it’ll keep you here till Jan. However, you still need to pay pro-rated Landlord’s agent commission on the unexpired portion of your lease (ie. 10 months left) on the calculation of:
$4600/24 x 10mths remaining = $1,916.67

Who paid the Agent's commission, the LL or you? The reason I ask is that I'm assuming your monthly rental is $2.3k which falls in to the grey area as to who pays the commission. If the LL paid then this is quite reasonable as the LL has paid 2 months commission for the property to be rented for the full 2 year tenancy.[/b]

If you really need to leave, perhaps we can ask the Landlord to consider letting you find a replacement tenant (to his approval) so that he can release you. You will have to cover the cost of the agent’s commission though (one month’s rent)."
[/b]

This additional one month's commission is complete bollox and the agent is trying to pull a fast one. The Agent states that you can find a replacement tenant so why would the Agent want to get paid commission for doing sweet FA?! If the Agent finds a replacement tenant then the LL or new tenant pays the commission.

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Post by Mad Scientist » Wed, 11 Aug 2010 9:23 am

Thank you Mr Saint, I have my reservation when the agent said this to OP but I let the expert to give a better insight.
:)
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Post by deemi786 » Wed, 11 Aug 2010 11:22 pm

My rent is 4600 a month, does this change anything? Thanks ever so much people for all the help! I really appreciate it!

Am weighing up my options, we're expecting our third bubba and we are wondering whether to go back to UK or give up the car and get a maid instead with the savings per month to help with the new arrival and possibly move into cheaper accomodation!

Lots to think about!

So you think she's talking bollox??

Am wondering how to put it to her in an e mail!

I was thinking something along the lines of, you're talking bollocks, frick off but the wife wants to be a little more sensitive.

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Post by Mad Scientist » Thu, 12 Aug 2010 4:28 am

deemi786 wrote:My rent is 4600 a month, does this change anything? Thanks ever so much people for all the help! I really appreciate it!

Am weighing up my options, we're expecting our third bubba and we are wondering whether to go back to UK or give up the car and get a maid instead with the savings per month to help with the new arrival and possibly move into cheaper accomodation!

Lots to think about!

So you think she's talking bollox??

Am wondering how to put it to her in an e mail!

I was thinking something along the lines of, you're talking bollocks, frick off but the wife wants to be a little more sensitive.
Go thru your contract thoroughly, skim thru with a comb, if it is not stated therein then that agent is pulling a fast one on you
There is guideline on real estate commission as stated by this report

http://www.iea.org.sg/index.cfm?GPID=150

Give her a scare stating you know your rights and you are a CASE member. Case is a body that fights for consumer against dodgy dealing including real estate agent
She will backed down if that is not the case.
Good Luck
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Post by x9200 » Thu, 12 Aug 2010 6:42 am

deemi786 wrote: Am wondering how to put it to her in an e mail!

I was thinking something along the lines of, you're talking bollocks, frick off but the wife wants to be a little more sensitive.
I would bluff a bit along the line that you checked this out with your lawyer.. blah, blah... and any attempt to deduct it from the deposit will result in legal action...blah, blah. You may also warn her that that trying to get you pay for this in the situation where she as a professional should know this is not legally justified may be considered as a fraud attempt and she could be prosecuted (not entirely that straight forward, but we are bluffing a bit, aren't we).

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Post by Saint » Thu, 12 Aug 2010 9:13 am

deemi786 wrote:My rent is 4600 a month, does this change anything? Thanks ever so much people for all the help! I really appreciate it!

Am weighing up my options, we're expecting our third bubba and we are wondering whether to go back to UK or give up the car and get a maid instead with the savings per month to help with the new arrival and possibly move into cheaper accomodation!

Lots to think about!

So you think she's talking bollox??

Am wondering how to put it to her in an e mail!

I was thinking something along the lines of, you're talking bollocks, frick off but the wife wants to be a little more sensitive.
The first part is normally a standard within the Dip Clause, see below

1. Diplomatic or Escape Clause and Reimbursement Clause

Check for this clause. This clause is to safe guard you if in the event you are no longer employed, transferred to other countries, you can terminate the lease after 12 months by giving 2 months notice. Thereafter, the security deposit will be refunded to you. Please note that most landlords will only include the diplomatic clause if the lease is more than a year.

In a standard Singapore Tenancy Agreement, there is usually the reimbursement clause together with the diplomatic clause. This clause states that if you exercise the diplomatic clause, you will have to reimburse part of the commission the landlord had paid to his agent.

The reason behind this clause is that the landlord had paid the full one month's agent commission for a 2 years lease but if you terminate the lease by exercising the diplomatic clause, hence unable to complete the full 2 years, you will have to refund the pro-rata commission. Since landlord grants the diplomatic clause, they will usually demand reimbursement clause to be included in the tenancy agreement.


The second part is complete bollox especially if it's not in your TA which I'm sure it isn't. I would send a polite but strongly worded email back to the agent saying you agree with the first part but definitely not the second part and will be contacting the Agent's company to complain and make them fully aware of exactly what this Agent is trying to do.

All commission/fees paid by either a LL or tenant are paid to the company itself rather than the Agent and has to be accompanied by a TA. How would the company account for $4.6k with the absence of a TA? But I would hazard a guess that the Agent would ask the fee to be paid directly to them!

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Post by deemi786 » Fri, 13 Aug 2010 3:35 am

yes it seems you are right!

there is mention of point 1.

To reimburse the Landlord the commission paid by the Landlord to his agent, pro-rated
accordingly based on the unexpired term remaining, should the Tenant be required to
vacate the demised premises pursuant to a breach of this Agreement or upon the earlier
termination of this Agreement pursuant to clause 5(i) herein or otherwise
.

but nothing about this commission i have to pay!

Thank you so much people!!! Ill keep you posted!!

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Post by deemi786 » Fri, 13 Aug 2010 4:52 pm

So i sent the mail as suggested telling her she was talking crap and i didnt agree with the second part (commission)

she sent me this back! Makes absolutely no sense to me but i think she's waffling just to try and confuse the shit out of me!!

Anyway, I think you misunderstood my earlier email. I believe it was in response to a question of breaking the lease even before the diplomatic clause kicks in...
That one month commission you are referring to has NOTHING to do with ME and IS NOT PAID TO ME!

1. It will be paid to the Landlord's agent and the Replacement Tenant's closing/co-broke agent.

2. You are right. It is not in your TA just as it is also not in your TA to allow you to break the lease before the diplomatic clause takes effect.


3. It was only a suggestion that you offer to pay the agents' fees for finding a new tenant for the property as an incentive for the LL to allow you to break your lease.

It could be that you avoid paying it by finding a replacement tenant yourself and the LL is kind enough to accept the replacement without further ado.
It can happen if say, a friend is willing to take over the lease.

However, in most cases an agent or 2 will be involved in helping you find a replacement. Usually the LL's agent and the new tenant agent. And they will need to be paid for their time and efforts (and advertising costs). Usually LL pays this commission but if you want to break the lease, the LL wont want to pay another time for a replacement, when the lease is not up.... It is common practice for the existing tenant to find a replacement "at his own expense". The replacement may just take over the remaining lease or sign a new one altogether.

Hope that clears this up.

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Post by carteki » Fri, 13 Aug 2010 5:09 pm

Please don't bold - I can't read it this late on a Friday...

The agent is right is saying that you should refund the landlord the unused portion of the fee. Actually you should refund the agent who should refund the landlord but that gets too technical. So that is the $1.9k (Once I had a tenant leave early on me and the agent agreed to waive the finders fee for the new tenant). By rights this should really be included in the standard leasing contracts as a cost of leaving early.

You don't need to pay a cent towards the new lease costs. This is a cost that the LL would incur if you left at the end of the contract and all you're doing is completing the terms of your contract (to the terms of your contract).

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Post by observer » Fri, 13 Aug 2010 7:09 pm

Actually, I think she makes sense.
It's common sense - if you try to come in before I go out, I can't go out. And you can't come in! Lose-lose!

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Post by Saint » Fri, 13 Aug 2010 7:39 pm

I would personally try and stay until the dip clause kicks in unless you can find a new tenant to take over the lease. I'm pretty sure if you leave before this you will lose your deposit or a large portion of it which I guessing is 2 months rent seeing as it's a 2 year TA?

btw for others, I never go for a 2 year contract and don't believe what agents say that 1 year contract are rare.

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Post by deemi786 » Mon, 16 Aug 2010 6:34 pm

thanks for all the help people!

We are staying till Jan and will see how it goes.

Appreciate the help one and all.

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