The Process of Renting a Place (18 Jan 2009)

The correct process of searching a rental house may be easy for some people, but terrible for others. Last month, a couple from Malaysia and an expatriate from Japan were fooled by a swindler pretending to be a manager-cum-landlord of a property terrace residence in Serangoon Gardens.

He rented the same residence to the two parties and ran off their money worth $10,300. Both parties reported to the police, but there is no assurance that they will obtain their money back.

A property agent said that lease scams happen most of the time and most of them include HDB residences. Although there are no possible foolproof ways to prevent these lease scams, there are still safety measures that tenants can assume to ensure they will not become a prey to a deceit.

On dealing with agents, tenants should primarily deal or engage with a certified property agent of an established or a reputable company, according to Mr. Mohamed Ismail, PropNex chief executive.

Even tough this is clearly not foolproof; it does give a protection if something will go wrong. ”At least there is a company to go to for help,” he said.

Companies like his will do investigations and take proper actions, such as ending the services of the agent if needed or assisting the tenant to obtain his money back, he said.

Secondly, check the property firm of the agent or the Internet site of the Institute of Estate Agents (IEA) to know if the person making a deal is a legitimate agent, advised Mr. Mohamed Ismail, the first vice-president of IEA.

Thirdly, tenants should not pay an agent with large cash. He added, “If you pay cash, he can misappropriate the money”. Instead, they should disburse with a use of a cheque or cashier’s order stating the name of the owner.

Before tenants sign the lease, the Property agency also recommends discovering the standard practises before entering a lease agreement.

These property agents should carry out due diligence to determine the property’s ownership they are managing, so tenants can see the documents. The property tax statement of the owner would be upright.

If tenants are dealing with a managing agent, one should ask for documented proof such as an authorisation letter from the property owner allowing the agent to take actions on his behalf or a power of attorney, according to Mr. Albert Lu, managing director of C&H Realty.

Mr Eric Cheng, executive director of HSR Property Group, said that tenants should negotiate for a lesser deposit and it is up to the property owner to agree, even if in the property market, the standard is a one month deposit for a year rental and two months deposit for two year rental.

He added tenants should only pay the advance lease upon the passing over of the keys to the property, to lessen their risk.

However, legitimate owners sometimes cheat, too. Therefore, tenants should pay their lease on a monthly basis, Mr. Cheng recommended. There were tenants who were satisfied to pay out 6 to 8 months in advance lease for a lower rental fee, only to discover later they were cheated.

In one situation, the lawful owner sold his apartment soon after the rent was closed and disappeared.

Tenants should have to be watchful, said Mr. Lu. ”If the rent is too good to be true, then you have to beware”.