Entrepreneurs who start a new business in Singapore and plan to rent an office premises are often not familiar with the process of drawing up a lease agreement and with all the protocols and documents related to it. The purpose of this leadership is to help you get acquainted with the process of renting an office and a lease agreement in Singapore, so that it is easier for you to cope with this task.
There are two main ways to search for office premises in Singapore. The first involves the hiring of a real estate agent, and the second option is to search for an office space on your own. In the second option, to find a free office room in Singapore, you will need to view local newspapers, ads and Internet sites that advertise the presence of free space. Keep in mind that the process of independent search for an office premises can take a lot of time. A real estate agent is hiring the most popular option in Singapore, especially taking into account the fact that, in accordance with ordinary practice, the lessor is responsible for the payment of the commission to the agent, and this will not cost the tenant any money.
Before signing the lease, it is necessary to calculate all the costs associated with the rental of the office in Singapore. Although you can afford the rent for the office space, you must also make sure that you can afford other accounts related to the room, such as electricity, telecommunications, office cleaning, etc. There are also unforeseen expenses that you must consider , such as insurance, etc.
Office rental - general conditions and practice of lease in Singapore
The conditions and the widespread practice of leasing vary from country to country, and what, in your opinion, is accepted and carried out in your country, may not necessarily be the same in another. Below are some general conditions and a lease practice, which are followed by most landlords and tenants in Singapore.
The most common practice of a lease agreement in Singapore is from 2 to 3 years, while a longer lease for 5-6 years is possible if you are going to occupy a large area. At the end of the rental term, most landlords offer you the possibility of extending for the next period, as a rule, at a market price prevailing at the time of extension. As a rule, landlords usually provide the lessee with the opportunity to extend the next period of the same duration for the rent, in advance by both parties, or at the prevailing market rate of rent at the time of extension.
The base part of the lease
Usually the term "gross rent" is used in Singapore. The total rent is usually paid monthly and consists of a basic rent calculated for square feet of the area, goods and services (GST) (GST) in the amount of 7%, if the lessor is a company registered as GST and service (on average) . From 0.75 to 1.20 Singapore dollars per pound per square foot), which relates to the payment of general management services provided by the lessor, such as air conditioning during working hours, maintenance of the building, control, building repair and security. The current amount of service fees is usually indicated in the lease agreement together with the clause that may change during the lease term. This allows the lessor to recover from the tenant any increase in service fees.
Deposits and other expenses
The returned warranty pledge equivalent to a three -month gross rent is a common practice and is paid by the tenant in two stages; The full rent for one month is expected after the exchange by legally binding documents, the tenant’s intention and the lesson’s letter, and the balance is paid when signing the lease agreement, occupying the premises or the beginning of the lease term. what will come earlier.
The warranty deposit is returned without interest upon the expiration of the lease term, but subject to the proper compliance with the terms of the lease agreement. The lessor reserves the right to subtract the costs and expenses properly paid by the tenant, due to any violation by the tenant. The lessor or management of the building charges a separate returned deposit for repairs, if and when you intend to carry out any repair or finishing work in office premises, and covers any damage caused to the common parts of the building during the repair period.
Payment for the preparation of documents, a coat of arms, etc. Coordinated by the parties. Often the lessor asked the tenant to carry the full or partial cost. The law requires the payment of a stamp fee under a lease agreement of any real estate. The co -fee is paid within 14 days from the date of conclusion of the agreement, if it is signed in Singapore, and within 30 days from the date of receipt in Singapore, if it is signed outside Singapore. Singapore tax authorities are seriously related to late stamping and non -stamp. In a very rough approximation, a coat of arms can be estimated at about 0.4% of the total rental cost for the lease. So far, for example, for a two -year lease agreement with a rent of 2000 per month, the co -fee will be 192 (2000x12x2/250).
The applicable property tax is paid by the lessor in Singapore. However, in the lease, there may be a clause that allows the lessor to recover from the tenant any increase in property tax related to the premises during the lease term.
Utilities and maintenance
The tenant is responsible for all general electricity accounts and telecommunications, which must be paid directly to the relevant service suppliers. In addition to the provision of air conditioning services during working hours (most office buildings in Singapore have centralized air conditioning), which is included in the gross rent, tenants can also request air conditioning services for an additional fee. Accusation.
Maintenance and cleaning of the external part of the premises and public places is carried out by the lessor, and tenants are responsible for cleaning and maintenance of all the interior belonging to you. If you choose, you can appoint a contractor for cleaning, appointed by the lessor, to maintain your premises.
Depending on the situation with parking in the place where you rent an office, seasonal parking spaces can be allocated to tenants in accordance with a total rented area for a monthly fee from about 100 to 180 Singapore dollars for buildings outside the central business region (CBD) and from 170 to 300 Singapore dollars for buildings in the central business area.
Most landlords do not allow the tenant to submit office premises in full or partially without the written consent of the lessor. In each case, the landlord may allow the tenant to find a new tenant who will take over.
It is expected that in Singapore, during the lease term, tenants will have a civil liability insurance policy from applications for bodily injuries, death or material damage or any forms of losses arising from any operations of the tenant in the room. Tenants should also insure all the furniture, devices and equipment of their office from risks and damage. If the office is being repaired, tenants are also required to issue a fire insurance policy and special dangers for the duration of such work.
Repair of office
The office in Singapore usually has standard accessories of cement and false floor, suspended ceilings, standard fire extinguishing systems and protection, central distribution channels of air conditioning, main lighting and window fittings.
If you have the need to convert the office in accordance with your preferences, you can do this in accordance with the provisions and conditions established by the lessor (in large office buildings there is usually a standard equipment guide to the entire decoration. It works indoors. In such cases, you can agree on the period without rent from two weeks to three months, depending on the area and area of the floor for repair work.
The cost of installation and installation work depends on the area of the premises, the complexity of the layout and the technical requirements of various enterprises, as well as the payment of the services of interior designers or architects. It can be approximately divided into categories from 40 to 60 Singapore dollars. For a low budget, 70–90 Singapore dollars for the average budget and above 100 Singapore dollars for a high budget. Any work on decoration, or modifications of existing accessories, or additions and alterations should be performed from the approval of the lessor, and, as in most cases, the tenant is responsible for restoring office premises until their initial state at the end of the lease.
Office rental in Singapore - the process of concluding a lease agreement
As a rule, the stages of negotiations and the signing of a lease agreement in Singapore include:
A letter about intent
After you have determined the office room that meets your needs, it is time to start lease negotiations. Ask your agent (or do it yourself, if you do not have an agent) send a letter about the intentions to the representative of the lessor. A letter about intent, also known as LOI, is a short letter that sets out the main conditions of the office rental that you want to receive from the lessor, and it is reported that you are serious about renting the premises. Be patient during negotiations, since this process may take some time until you and the lessor can come to an agreement.
After receiving a letter about the intentions, the lessor usually checks the company, including the paid capital of the company to make sure that the company will be able to pay rent. As soon as the owner of the office premises will be satisfied with the company's application and both parties agree on the main lease conditions, the lessor will send a letter-offer along with a model of a copy of the lease agreement. The landlord will ask you to return the signed copy of the letter-offer along with the unstable payment. After signing a letter-off and making the necessary non-refundable deposit, the premises will be provided with a pledge, provided that the lease agreement is signed.
After signing the letter, the lessor will transmit you a lease agreement for signing. The housing rental agreement is usually a simple document, however, if you consider it necessary, you can use professional legal services at your own expense. At this stage, you can take with you the legal documents of your lessor or appoint your own lawyer to participate in the preparation of the final lease agreement.
You must pay a stamp fee to the Tax Service of Singapore (IRAS) after signing the lease. Herbal rental fee, which provides for a fixed rent throughout the rental period, will be calculated on the basis of gross rent and must be paid within 14 days from the date of registration if the document is signed in Singapore, or within 30 days from the date of its receipt in it Singapore, if the document is signed abroad.
Arrival in the office
After signing the lease agreement and making the necessary warranty deposit, you can enter into real estate and freely enter or carry out finishing work if there is such a need. In the latter case, to make any changes, modifications and additions to the premises requires the permission of the lessor. At this stage, you need to focus on ensuring your new office to work as soon as possible. You will need to contact the relevant authorities to receive connections such as utilities, telephone, Internet, etc. You will also need to think about attracting an agency for cleaning offices or a person.
Office rental - is it worth hired by real estate agent?
As in any large city, including Singapore, the search for a suitable office room and location can take a lot of time and tiring. Real estate agents spend a lot of time searching for an office market to track the available space, current rental rates, etc.
The presence of a local expert with special knowledge that will help you will increase your chances of finding a suitable room and get the best possible transaction. Taking the majority of the routine aspects of the process of searching for an office, a real estate consultant will allow you to devote time to your business, while it/it will deal with the rental issues of your office, including the search for suitable property, conducting rental negotiations on your behalf, coordination of documents. and other technical aspects of the lease.
The best thing is that, as is customary in Singapore, when renting real estate above 2500 Singapore dollars a month, real estate agents do not charge any fees from the tenant. The lessor usually pays a commission, an equivalent gross rent for one month. Most real estate agents in Singapore will not engage in unethical methods, such as the collection of commission from both the lessor and from the tenant in the same transaction without prior notice to the lessor and the tenant. With a monthly rental below 2500 Singapore dollars, the tenant is usually asked to pay a commission, an equivalent gross rent for half a month. However, experts Rentofficetode.com will find the best office for you absolutely free!