The introduction of ‘landlord insurance’ in Singapore, which is something that is being offered in Australia.

With the growing property rental market in Singapore, it may be time to look at more ways to protect the interests of both landlords and tenants.

This was the opinion of some viewers who wrote in after a landlord was interviewed on Get Rea!, a Channel NewsAsia’s current affairs programme.

In the Get Rea! episode, “Just Follow The Law”, it was a case of a Singaporean landlord living in Australia who had problems with a difficult tenant in Singapore.

Among other things, the tenant refused to let the landlord’s property agent arrange for a joint inspection of the premises towards the end of the lease.

So the inspection was carried out at midnight on the last day itself.

The property was left in such a mess that the two months security deposit was forfeited.

The landlord, Sharon de Souza, suggested the introduction of ‘landlord insurance’ in Singapore, which is something that is being offered in Australia.

She said: “Landlord insurance essentially gives you coverage. They will cover up to A$5,000 of your legal fees if you have to engage a lawyer to get rental back or claim for damages. Also, if you’ve lost rental income because of a delinquent tenant, the policy - based on what policy type you take - will cover part of your rental.”

While insurance companies that were contacted declined to comment, saying they were not familiar with the proposal, the Institute of Estate Agents (IEA) thinks the suggestion is worth considering.

Jeff Foo, President of Institute Of Estate Agents, said: “Landlords buy the insurance to cover themselves against loss of income, damage, malicious damage to their property, theft and perhaps legal fees. But a lot of this will depend on supply and demand because a month’s rental will go into paying for the premium of such policies. But it may not be a bad idea.”

Ms de Souza had also suggested that property agents be paid their commissions on a staggered, monthly basis, instead of a total sum upfront once the Tenancy Agreement is signed.

However, property agents told Channel NewsAsia that adopting such a system is harder in Singapore.

Vincent Chong of Colliers International explained: “It’s because generally, our rental rates are relatively low for the lower end of the market. For instance, if it’s a S$2,000 rent and it’s spread over 24 months, it’s going to be less than S$100 per month for the property agent. But of course, if the rental prices are in the region of S$20,000, it would be possible for agents to accept a kind of staggered commission.”

There was also a suggestion on how landlords could deal with difficult tenants, especially when it is a long-distance relationship.

“We suggest to the landlord that they engage a Property Managing Agent to do the day-to-day running of the lease, which includes collection of the rent, maintenance of the air-conditioning,” said Mr Chong.

Engaging such a Lease Management Agent could cost you 10 percent of your monthly rental fee, although some property agencies offer it free-of-charge to landlords as a value-added service.

As for the tenants, Low Swee Kim, Vice-President of Institute of Estate Agents, said: “We have a Small Claims Tribunal where tenants or landlords can go to resolve their disputes. They don’t need to pay any high legal fees because they don’t need to be represented by lawyers. They can go anytime when they have a dispute during the tenancy; they don’t have to wait till the end of the tenancy period.”

But as in any relationship, sometimes all it takes to close the door on a nasty chapter, is simply by talking it out.

Source : ChannelNewsAsia - 8 Nov 2007