LOI - "Good Faith Deposit" lost?

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rodskogj
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LOI - "Good Faith Deposit" lost?

Post by rodskogj » Sun, 19 Jan 2014 12:11 am

We just landed in Singapore last week and are looking for a condo in the Novena area. We found one we liked at the right price quite quickly and signed a LOI and gave the landlord a good faith deposit. Following this the landlord has presented us with a TA that is completely unacceptable - we pay for all repairs, no guests or FDW allowed, no rights etc, etc.

We are sitting down to discuss/negotiate TA on Monday. My question is this: if we fail to come to an agreement do we forfeit the deposit? Should we have asked to see the TA before we signed the LOI? This seems like a major loophole in the rental process as landlords can collect many good faith deposits until an ignorant tenant agrees to his outrageous terms

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Strong Eagle
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Post by Strong Eagle » Sun, 19 Jan 2014 2:27 am

You may well have done yourself in if the landlord doesn't want to be cooperative. Most folks who have been in the Singapore rental game would never hand over any deposit with an LOI because it is essentially a useless, unenforceable document. Only if I had reviewed and accepted the proposed TA would I consider putting down a deposit. This may be the tuition costs of being instructed on what landlords are like in SG.

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Post by Beeroclock » Sun, 19 Jan 2014 6:06 am

If landlord acting in bad faith and you can demonstrate the proposed TA is having many terms outside the norm, then might have a chance via SCT ? But it's not a good position when the LL has your money and can assert you are the one who has failed to take up the TA, all the onus is on you to recover it unfortunately. Good luck

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Post by ohmz52 » Sun, 19 Jan 2014 6:30 am

Damn, that is insane!
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Post by x9200 » Sun, 19 Jan 2014 8:38 am

LOI in principle is not legally binding. LOI is like a memorandum, minutes of the meeting with the LL. Just google out if you don't believe. Even in Singapore. In other words LL has no base to keep such deposit if no TA is signed.

We walked away, after LOI was signed, with deposit money with no problems of any kind at the stage where the TA was already agreed. Our reason was we were not comfortable with this particular LL. This was too the case of a very unreasonable TA proposed by the LL and he was arguing about some most absurd clauses. At the end of the day we would not like to be somehow dependent on this kind of person and deal with him in case something gets broken or at the stage of possible contract renewal.

Most of the time for any tenancy matters in Singapore, these are the people who make the mess, not the law.

If LL refuses to return it, go to STC. Unlikely it will get to the hearing stage and the GFD will be returned soon after (s)he sees you are serious about it.

Of course it does not mean that LOI should be treated frivolously. Doing all in good faith is important.

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Post by beppi » Sun, 19 Jan 2014 5:24 pm

I have, in 12 years of renting in Singapore incl. six moves, never paid a good-faith deposit. It is something invented by property agents to justify their existence (or maybe because an agent automatically adds a dose of mistrust to the transaction) - and I never rented through agents in the first place. It is safer, cheaper and more pleasant that way!

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Post by nakatago » Sun, 19 Jan 2014 5:38 pm

Good-faith deposit should just be called naive-newcomer deposit.
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Post by x9200 » Sun, 19 Jan 2014 6:35 pm

Maybe, but for my over 12y of renting here I always paid it and never had any issue with it. You just should know your rights and stay firmly defending your position or walk away. If you show insecurity the voulchers will prey on you regardless you pay GFD or not.

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Post by ecureilx » Mon, 20 Jan 2014 11:11 am

nakatago wrote:Good-faith deposit should just be called naive-newcomer deposit.
+1

and also signs of a rental market in upswing is when the agent says "please do bring your first month deposit, when viewing the unit .. "

all you have to do is, ask if the agent will give the contract on the spot .. and you can see the reaction

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