1+1 year lease means what?

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curiousgeorge
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1+1 year lease means what?

Post by curiousgeorge » Fri, 01 Oct 2010 6:46 pm

Sorry to sound so dumb.

I imagine its a one year lease with option to renew for a further year...but does landlord have option to increase rent after 1 yr? Or obliged to continue at the same rent? Or totally negotiable?

Sorry, I did search but couldn't find a clear answer...still confused :?

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ksl
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Re: 1+1 year lease means what?

Post by ksl » Sat, 02 Oct 2010 12:04 am

curiousgeorge wrote:Sorry to sound so dumb.

I imagine its a one year lease with option to renew for a further year...but does landlord have option to increase rent after 1 yr? Or obliged to continue at the same rent? Or totally negotiable?

Sorry, I did search but couldn't find a clear answer...still confused :?
Legally speaking if it doesn't mention a rent rise after the first year, he cannot raise it, as you have the option to renew on that contract.

If he up's the rent, a new contract would have to be made, hence you have no option.

Though he's a landlord that may try it on. To get this clarified you should visit the free local legal aid advice meetings at the community centre close to you, any of the centres will inform you of the times and days the legal aid people will be around.

Download the pamphlet for a telephone number

http://www.lawsociety.org.sg/probono/CLC/aboutCLC.aspx

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Post by x9200 » Sat, 02 Oct 2010 4:10 am

For me it just give you the right to renew the contract with priority over some other potential tenants offering similar condition or the landlord if he would like to take it over for her/himself. In other words the landlord needs to check with you first if you are interested in further renting the apartment before offering it to anybody else. If there is nothing in the contract about the rent any* can be proposed by the landlord.

* close to prevailing market rent

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Post by ksl » Sat, 02 Oct 2010 7:30 pm

x9200 wrote:For me it just give you the right to renew the contract with priority over some other potential tenants offering similar condition or the landlord if he would like to take it over for her/himself. In other words the landlord needs to check with you first if you are interested in further renting the apartment before offering it to anybody else. If there is nothing in the contract about the rent any* can be proposed by the landlord.

* close to prevailing market rent
My opinion is slightly different, as i would look more into contract law, though the problem with most laws is, that they are not always right, so it would be based on previous case scenarios and the intent behind the contract. For example the contract could state 1 + 1 the second year option exercises the right for rental increase in line with market common practice. This is clearly stated so the offer is clear and acceptance would be based on the offer.

Under contract law 1 + 1 must refer to the contract, it is an offer and acceptance deal, if the increase in rent is not stated, it cannot apply. The offer can in fact be withdrawn before the run out date, however it cannot run out, and then say I am putting up the rent. It states cleary that notice must be given in good time....the offer of a 1 + 1 must be the same contractual condition, if not stated in the contract.

It wouldn't stand up in any court, if there was intent to raise the rent, and it wasn't stated in the contract, that rental would increase after one year.

The person accepting the option, would of course be interested if the rent was going to increase. Otherwise it would be totally a waste of time to give and option for 1 more year...

The landlord could just do the contract for 1 year and renew the contract with an increase in rent, the tenant would still get the same offer before letting to someone else, though with a rent increase, so there would be no point of an option of 1 + 1

A contract will be looked at on the intent behind the contract 1 + 1 is an offer, of the same contract, though it can be withdrawn with a reasonable deadline, and it must be done by letter. It's there in black and white, nothing to do with giving anyone the first offer.

http://www.singaporelaw.sg/content/ContractLaw.html

I'm no expert in law, though i am expected to be familiar with contract law. Which can swing both sides of the fence, so interpretation would have to be done by a legal advisor, who would probably look for court cases in the past, to argue the facts. Offer and accept must be clear.

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Post by x9200 » Sat, 02 Oct 2010 8:25 pm

ksl wrote:Under contract law 1 + 1 must refer to the contract, it is an offer and acceptance deal, if the increase in rent is not stated, it cannot apply.
The offer can in fact be withdrawn before the run out date, however it cannot
run out, and then say I am putting up the rent. It states cleary that notice must be given in good time....the offer of a 1 + 1 must be the same contractual condition, if not stated in the contract.

It wouldn't stand up in any court, if there was intent to raise the rent, and it wasn't stated in the contract, that rental would increase after one year.

The person accepting the option, would of course be interested if the rent was going to increase. Otherwise it would be totally a waste of time to give and option for 1 more year...

The landlord could just do the contract for 1 year and renew the contract with an increase in rent, the tenant would still get the same offer before letting to someone else, though with a rent increase, so there would be no point of an option of 1 + 1

A contract will be looked at on the intent behind the contract 1 + 1 is an offer, of the same contract, though it can be withdrawn with a reseaonable deadline, and it must be done by letter. It's there in black and white, nothing to do with giving anyone the first offer.

http://www.singaporelaw.sg/content/ContractLaw.html
1. Not everything must be covered and is covered in the contract. What is not, is cover by the civil law statues or other relevant statues. Besides, such approach makes little sense as a simple clause on the termination notice would serve it much better.

2. I doubt this is an offer. This is the RIGHT to receive an offer. It is an accepted contract clause agreed by both parties.

3. IMO a clear intent is to ensure that the tenant has a fair chance to extend his stay under fair condition. Fair does not necessarily mean the sam as the current contract.

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Post by ksl » Sat, 02 Oct 2010 9:06 pm

x9200 wrote:
ksl wrote:Under contract law 1 + 1 must refer to the contract, it is an offer and acceptance deal, if the increase in rent is not stated, it cannot apply.
The offer can in fact be withdrawn before the run out date, however it cannot
run out, and then say I am putting up the rent. It states cleary that notice must be given in good time....the offer of a 1 + 1 must be the same contractual condition, if not stated in the contract.

It wouldn't stand up in any court, if there was intent to raise the rent, and it wasn't stated in the contract, that rental would increase after one year.

The person accepting the option, would of course be interested if the rent was going to increase. Otherwise it would be totally a waste of time to give and option for 1 more year...

The landlord could just do the contract for 1 year and renew the contract with an increase in rent, the tenant would still get the same offer before letting to someone else, though with a rent increase, so there would be no point of an option of 1 + 1

A contract will be looked at on the intent behind the contract 1 + 1 is an offer, of the same contract, though it can be withdrawn with a reseaonable deadline, and it must be done by letter. It's there in black and white, nothing to do with giving anyone the first offer.

http://www.singaporelaw.sg/content/ContractLaw.html
1. Not everything must be covered and is covered in the contract. What is not, is cover by the civil law statues or other relevant statues. Besides, such approach makes little sense as a simple clause on the termination notice would serve it much better.

2. I doubt this is an offer. This is the RIGHT to receive an offer. It is an accepted contract clause agreed by both parties.

3. IMO a clear intent is to ensure that the tenant has a fair chance to extend his stay under fair condition. Fair does not necessarily mean the sam as the current contract.
Just to put you on the right track this is a business contract, there is no protection in Singapore for tenants, however one could and would apply the commercial contract of law on contracts where financial gain is obvious:wink:

http://public.findlaw.com/abaflg/flg-13-1d-8.html

What is an option to renew?
An option to renew is a clause in the lease, which you bargain for, that enables you to renew the lease at the end of the lease term for an additional term. Without an option to renew, you may be forced to move or to pay an extraordinarily high rent to remain where you are just at the time the business is becoming very profitable. To provide maximum protection, the rent, or at least a formula for determining the rent during the renewed period, should be specified.

An option clause is a benefit to the tenant, to take the option at the same price, not at a higher price. choice, alternative, possibility, selection, election; (Finance) right to buy or sell a particular thing (such as stock-market commodity) at an agreed price within a fixed time frame.

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Post by x9200 » Sun, 03 Oct 2010 2:05 am

I am on the right track :) and there is no contradiction between what I wrote and what you quoted above. Actually it proves rather mine point than yours:

"To provide maximum protection, the rent, or at least a formula for determining the rent during the renewed period, should be specified."

In the OP's case the rent is not specified so there is no maximum protection to the tenant and he is protected only to the extend I mentioned. If the rent is specified in the very clause then of course it has to be followed.

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Post by ksl » Sun, 03 Oct 2010 3:36 am

x9200 wrote:I am on the right track :) and there is no contradiction between what I wrote and what you quoted above. Actually it proves rather mine point than yours:

"To provide maximum protection, the rent, or at least a formula for determining the rent during the renewed period, should be specified."

In the OP's case the rent is not specified so there is no maximum protection to the tenant and he is protected only to the extend I mentioned. If the rent is specified in the very clause then of course it has to be followed.
In the OP's case the rent is not specified so there is no maximum protection to the tenant and he is protected only to the extend I mentioned. If the rent is specified in the very clause then of course it has to be followed.
The maximum protection is in fact the rent he his paying for the first year, otherwise there would be no option to take the premises for a second year, an option is a benefit at an agreed price within a fixed time and the time period is 2 years. Though it can be revoked providing communication has taken place and the offerer has in fact informed the offeree in a reasonable time.

If the rent is changed half way through its hardly an option worth considering, unless I couldn't find another place, in wich it would be unreasonable to try and up the rent after 1 year, without revoking the option.

So the contract is made with intent to mislead. Like I said before it makes no sense at all to have an option of 1 + 1 when you can just renew the contract after the first year...an option is to exercise the option before the first year runs out at the same rent, unless stated otherwise in the contract.

Not after the 1st year, of which it would be obvious the rent would increase especially in Singapore. Though we could discuss this forever, lets find an older case to settle it one way or the other :lol: By the way, there is no such thing as maximum protection in contract law link your source. :wink:

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Post by sundaymorningstaple » Sun, 03 Oct 2010 11:50 am

What is an option to renew?
An option to renew is a clause in the lease, which you bargain for, that enables you to renew the lease at the end of the lease term for an additional term. Without an option to renew, you may be forced to move or to pay an extraordinarily high rent to remain where you are just at the time the business is becoming very profitable. To provide maximum protection, the rent, or at least a formula for determining the rent during the renewed period, should be specified.

An option clause is a benefit to the tenant, to take the option at the same price, not at a higher price. choice, alternative, possibility, selection, election; (Finance) right to buy or sell a particular thing (such as stock-market commodity) at an agreed price within a fixed time frame.
That reads, to me, that if I have an option to renew, I am given first go, as a price to be determined, if not categorically stated. It doesn't mention that the price, in fact, needs to be stated in said contract. :???:

I also noticed that the clause in blue indicated the formula to determine used "should" and not "must", so it is, therefore subjective and can be negotiated. This then becomes a right of first refusal to me.
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Post by ksl » Sun, 03 Oct 2010 2:00 pm

sundaymorningstaple wrote:
What is an option to renew?
An option to renew is a clause in the lease, which you bargain for, that enables you to renew the lease at the end of the lease term for an additional term. Without an option to renew, you may be forced to move or to pay an extraordinarily high rent to remain where you are just at the time the business is becoming very profitable. To provide maximum protection, the rent, or at least a formula for determining the rent during the renewed period, should be specified.

An option clause is a benefit to the tenant, to take the option at the same price, not at a higher price. choice, alternative, possibility, selection, election; (Finance) right to buy or sell a particular thing (such as stock-market commodity) at an agreed price within a fixed time frame.
That reads, to me, that if I have an option to renew, I am given first go, as a price to be determined, if not categorically stated. It doesn't mention that the price, in fact, needs to be stated in said contract. :???:

I also noticed that the clause in blue indicated the formula to determine used "should" and not "must", so it is, therefore subjective and can be negotiated. This then becomes a right of first refusal to me.
yes you are right because what you say is reasonable, and that is were the conditions swing either one way or the other, it's about what is reasonable and sufficient time give for the receiver of the offer to comply.

Though my point is actually if the contract is a 1 + 1 the offer stands has 2 years, until the offer is revoked or changed, by reasonable actions, within a reasonable time frame. example the LL couldn't leave it until the day before the tenant was due to take an offer of change, if it was left late and without proper communication, what would be reasonable in the eyes of the court would be, the LL failed in his duty to give reasonable time...

I think it is a good discussion point to bring up, as it is all about test cases when it comes to challenging the legality of the law. Basically if the tenant doesn't find it reasonable he must have his reasons, and they are a legitimate concern, as Singaporeans in these kind of cases tend to take advantage of tenants, without knowing the consequences, so it's ideal that Tenants become familiar with the complexity of a contract. One cannot discuss maximum protection in a contract, has that maybe unreasonable and a court would decide that. So basically even though you sign a contract, you can take the contract to arbitration has unreasonable on the grounds of many factors.

Of course it may be in the LL favour, to have his legal team draw up a fool proof contract, only to discover that the legal terms have been unreasonable, and the LL failed in his duty to communicate prior warning, what is reasonable in terms of rental, is anybody's guess, though i would expect a month to 3 months notice on an option on property rental not 24 hrs or a week.

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Post by x9200 » Sun, 03 Oct 2010 2:37 pm

Ksl, this "maximum" word was quoted by you first and myself emphasizing it was only to show you a simple logic behind the quoted sentence which is that the option to renew can be both with or without the specification of the rent. You've been making a very simple thing very complicated so let me repeat once again: if in the option to renew clause the rent is specified then the rent cannot be increased by LL without a consent from the tenant, but if i is not specified then it can be changed.

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Post by ksl » Sun, 03 Oct 2010 9:22 pm

x9200 wrote:Ksl, this "maximum" word was quoted by you first and myself emphasizing it was only to show you a simple logic behind the quoted sentence which is that the option to renew can be both with or without the specification of the rent. You've been making a very simple thing very complicated so let me repeat once again: if in the option to renew clause the rent is specified then the rent cannot be increased by LL without a consent from the tenant, but if i is not specified then it can be changed.
Thanks for pointing that out, though the word is included in the link i provided, not my own words http://public.findlaw.com/abaflg/flg-13-1d-8.html. I agree I was getting myself into the closet, as I find the law to be a maze of if's and but's and everything can be challenged, so I tend not to believe everything i read, without confirming it first by other sources. Thank you for the reminder :wink:

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Post by x9200 » Mon, 04 Oct 2010 11:40 am

:)

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