Letter of Intent Binding?

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monoid
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Letter of Intent Binding?

Post by monoid » Sat, 12 Feb 2011 10:53 pm

Hi folks,

On Friday I've stupidly signed a letter of intent for the rental of an HDB and now I'm having second thoughts.

I've searched the forum and found some info stating that it is not binding as long as no money changed hands, which didn't happen in my case as the viewing took place in the evening after banking hours.

Do I have to fear legal consequences by the agent/landlord if I walk away?

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JR8
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Post by JR8 » Sat, 12 Feb 2011 11:16 pm

I thought for a contract to be formed, something of value (a 'consideration') needed to be exchanged, which on the face of it you do not seem to have done.

But then I am not a lawyer etc...

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Mad Scientist
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Post by Mad Scientist » Sun, 13 Feb 2011 1:02 am

Do not worry about . The LL/agent cannot do any harm to you. Scare mongering yes but that is all the can do
The positive thinker sees the invisible, feels the intangible, and achieves the impossible.Yahoo !!!

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Re: Letter of Intent Binding?

Post by revhappy » Sun, 13 Feb 2011 10:53 am

monoid wrote:Hi folks,

On Friday I've stupidly signed a letter of intent for the rental of an HDB and now I'm having second thoughts.

I've searched the forum and found some info stating that it is not binding as long as no money changed hands, which didn't happen in my case as the viewing took place in the evening after banking hours.

Do I have to fear legal consequences by the agent/landlord if I walk away?
Ok. Now that I have changed houses twice and have dealt with agents extensively, So I qualify to share with you my knowledge about how renting works here. :cool:

1st step is you go to view a house along with your agent. There may be many others who also view the house at the same time. And then your agent asks you how much you are willing to the rent the house for. You quote a figure. At the same time there would be many others there who would also quote figures. Now the landlord has to make a decision on whom to rent it out to based on the amount each tenant is willing to rent for.

So the Landlords agent asks each prospective tenant to sign a letter of intent. So it is quite possible that the landlord has got LOIs from several propective tenants for the same house.

Then the land lord decides whom to rent it out to and the selected tenant needs to pay the deposit. In this case the LOI is sort of protection for the Landlord to keep the deposit in case the tenant backs out. Also the once the Landlord accepts the deposit he is not supposed to rent out the house to anybody else untill the date of occupation. So the tenant needs to request a copy of the LOI as well.

In your case since you havent paid any deposit, the LOI serves no purpose. Its void. So just chill and relax.

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Post by monoid » Wed, 16 Feb 2011 10:32 am

So now the agent is telling me that since there's a LOI involved, the landlord has the right to sue me to get the unpaid deposit. Any truth to that?

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Post by Saint » Wed, 16 Feb 2011 10:36 am

monoid wrote:So now the agent is telling me that since there's a LOI involved, the landlord has the right to sue me to get the unpaid deposit. Any truth to that?
None what so ever, the LOI isn't worth the paper it's printed on and not binding. Not until you sign the TA and the Stamp Duty is paid do you have a legal binding contract with the landlord which will be recognised in any Singapore Court.

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Post by revhappy » Wed, 16 Feb 2011 11:20 am

Agree with Saint. The agent is doing that just to get his agent fee. I am sure the landlord himself doesnt care about it and is waiting for the next agent to get a tenant. :)

So I would say, be polite to agent and just stand your ground and refuse to pay anything, agent fee or the deposit. They cant sue you. They aren't stupid enough to sue you. In fact sueing is going to be an expensive affair for them as they will have to keep the house vacant. So its just not going to happen. Ignore the agent if he keeps calling you again.

I was in a situation worse than you. I had even issued a cheque to the landlord and then backed out by doing a stop payment. The agent threatened me just like yours. I spoke to another agent who was a friend of mine who allayed my fears. Its been about 1 year since that episode and nothing has happenned. So just chill :)

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