Hi all,



I'm going to rent my property to a relative of mine starting May next month. I'm interested in buying my second property in the near future, so I wanna use my tenancy to boost my loan repayment capabilities (boost my DSR).

As a poor person, I'm drafting my tenancy agreement myself and plan to do everything A-Z (stamp etc) myself

1) normally tenancy agreement is 1 year period right? since its long term, can I put longer like 3 / 5years? is it acceptable?

2) I noticed that most tenancies they put 1 year period + 1 year option to extend at prevailing market rate mutually agreed upon. Meaning maximum can 2 years only right?


If can only do like 1 year + 1 year option, does that mean every2 years I gotta sign the agreement again and stamp again??

Thanks all

1) Yes, you can put longer term, but your stamp duty will be higher. One of the ways is you put one year but the tenant has the option to continue renting with the agreed amount (same amount or increase by how many percent).

2) You can actually put more than that. But depend, if tenant will able to find cheaper one or places more convenient to them, they may move after the minimum period. The option will not cost anything to them.

It is good that you sign another agreement after the earlier one end, or else the tenant has the freedom to move out or not paying you because no more agreement bound.

1) one (1) year + one (1) year [optional] is the norm currently being practiced in the market and you can depart from the norm and imposes either two (2) or three (3) years on the principal period and with an option of either one (1), two (2) or three (3) but never three (3) simply because any period more than three (3) years continuously amounts to a lease, you don't want to lease your property.

2) you can go to a maximum of hundred (100) years if the parties have not issues but noted my paragraph (1) on the issue of lease and also, limitation period sets in after six (6) years. the only good thing you get out of having long extendable option periods is that you don't need to redraft a new tenancy agreement, all you need to do is have a letter to confirm the exercise of the option and then have it stamped ad valorem.

3) you are right, if you have a two (2) years + two (2) years tenancy agreement, once the entire four (4) years period has lapsed then you need to prepare a fresh tenancy agreement.

if I put 1 year + option 1 year.. let's say in the third year still continuing at same rate. Will bank accept my tenancy agreement when applying for loan?
or can I put 1 year + option to continue unless termination notice is GIVEN. Or confirm bank will only accept 1+ option 1 year only

Basically I'm renting to relatives long term as stated, so no need worry about anything.

I just want the easiest method for loan application in the future next time.

An agreement without a time is void for uncertainty, if your agreement states one (1) year + one (1) optional year then it is only valid for two (2) years provided the option was exercised. As far as formality is concerned, there is no third (3rd) years.

You cannot even sue for rental after the two (2) years. It's called a "tenant-holding-over".

Just do a three (3) years + three (3) optional years.

Why is it that one doesn't want to lease out the property? Care to elaborate?

Tenancy of more than 3 yrs is deemed as a lease based on NLC and shall be registered on the title deed. As lessee's rights / interests are protected under the NLC, from the owner (lessor) perspective anything that makes its position more restrictive / less desirable logically shall be avoided.

i will not elaborate simply because then it will be a wall of text.

what people need to know is that lease is a registrable interest, meaning to say the lessee is entitled to have their name endorsed on the individual document of title to the property, you don't want other people's name to be endorsed on your property now, do you?

just think of it like a "caveat". you will still remain the registered proprietor of the property, so no worries about that and your rights are not diluted in any way but now, you share the property.

unless, you have no interest in any undertakings to the property otherwise don't create a lease because a lease also give "somewhat-owners" right.