You have viewed a flat, liked it and told the agent you want it. Before you see a full tenancy agreement, you will usually be asked to sign a short document and hand over money. That document is the letter of intent, or LOI, and the money is the good faith deposit. For newcomers, this step is easy to rush because it feels like a formality. It is not.
A letter of intent for a rental in Singapore is where the main terms of your lease are agreed. Once you have signed it and paid, changing those terms becomes much harder, and walking away can cost you the deposit. This guide explains what the LOI is, what should be in it, how the good faith deposit usually works and what to check before you sign. It is general information, not legal advice.
What the Letter of Intent Is and Why It Comes First
In Singapore’s private and HDB rental market, the LOI is a short written offer from the tenant to the landlord. It sets out the key commercial terms: rent, lease length, start date, deposit and any special requests. When the landlord accepts and signs it, both sides have agreed the deal in principle. The agent or landlord then prepares the full tenancy agreement (TA) based on those terms.
The LOI exists because rental flats in popular areas can move quickly. It lets a landlord take a unit off the market with some confidence, and it gives you a written record of what was promised during viewing and negotiation.
The LOI is usually short, but courts and agents treat it seriously. Depending on its wording, parts of it may be binding. If you are unsure what a clause means, ask before you sign, or have a lawyer look at it.
What Should Be in Your LOI
A good LOI is specific. Anything you discussed verbally and care about should be written in. Typical items include:
- Property address and unit number, for example unit #08-15, plus whether it is the whole unit or a room.
- Monthly rent and whether it includes utilities, internet, maintenance or service charges.
- Lease term, such as one or two years, and the start date.
- Security deposit amount for the lease, and the good faith deposit amount paid now.
- Diplomatic clause, which commonly lets a tenant end the lease early after a minimum period if they are transferred out of Singapore or lose their job, with notice. Its exact terms are negotiated.
- Repairs and maintenance, including who pays for minor repairs and air-conditioner servicing.
- Items to be fixed or provided before move-in, such as replacing a mattress, repainting or adding curtains.
- Furnishing level, with a note that an inventory list will be attached to the TA.
- Occupants, including how many people will live there and whether pets are allowed.
- Conditions, such as “subject to the landlord’s HDB approval” or “subject to my work pass being issued”.
If something is missing from the LOI, assume the landlord will not agree to it later.
How the Good Faith Deposit Works
The good faith deposit, sometimes called a booking deposit, is paid when you sign the LOI. In common market practice it is often one month’s rent for a one-year lease, but the amount is negotiable and not set by law.
What usually happens to it:
- If the landlord accepts and you sign the TA, the good faith deposit normally becomes part of your security deposit. You then top up the balance.
- If the landlord rejects your offer, the deposit should be returned in full.
- If you back out after the landlord accepts, many LOIs say the deposit is forfeited. This is the main risk to understand.
- If the landlord backs out after accepting, the LOI should say the deposit is returned, and some LOIs also include compensation.
Always get a written receipt. Pay by bank transfer or cheque made out to the landlord, not in cash, so there is a record. If paying to an agent’s company account, make sure the LOI says so clearly.
For what happens to the security deposit at the end of the lease, see our guide on rental deposits and disputes for newcomers.
LOI Compared With the Tenancy Agreement
It helps to know which document does what.
| Point | Letter of Intent | Tenancy Agreement |
|---|---|---|
| When it is signed | After viewing and negotiation, before the TA | After the LOI is accepted, before or on move-in |
| Length and detail | Short, covers key terms only | Full contract with all clauses and an inventory |
| Money paid | Good faith deposit | Balance of security deposit and first month’s rent |
| Stamp duty | Not usually stamped | Stamp duty is payable to IRAS, commonly by the tenant |
| Main risk | Losing the deposit if you back out | Being bound for the full lease term |
The TA should match what the LOI says. When the draft TA arrives, compare the two line by line. If terms have changed, raise it before signing.
Checks to Make Before You Sign and Pay
Newcomers are sometimes targeted by rental scams, often through online listings. A few checks reduce the risk:
- Verify the agent. Property agents in Singapore must be registered with the Council for Estate Agencies (CEA). Search the agent’s name or registration number on the CEA public register.
- Confirm the landlord owns the property. Ask to see proof of ownership. Agents can do a title search through the Singapore Land Authority (SLA), and you can ask whether this has been done.
- For HDB flats, check that the owner is allowed to rent out the flat or room. HDB has eligibility and approval rules for subletting, and non-compliant rentals can be ended. Check current rules on the HDB website.
- Match your pass. If you are on a work pass or Dependant’s Pass, make sure the lease start date and term fit your pass validity. Add a “subject to pass approval” condition if your pass has not been issued.
- Never pay before viewing. Be very cautious about anyone asking for a deposit for a flat you have not seen in person or by a live video call with the agent present.
- Read the forfeiture wording. Know exactly when you lose the deposit.
Negotiating at the LOI Stage
The LOI is your best chance to negotiate, because the landlord has not yet committed to anyone. Reasonable things to ask about include:
- A slightly lower rent in exchange for a longer lease.
- The landlord fixing specific defects before move-in.
- A cap on the amount you pay for each minor repair, with the landlord covering anything above that.
- A diplomatic clause if your job could move you abroad.
- Permission for a pet, in writing.
Be polite and realistic. In a tight market, landlords may choose a tenant who asks for less. Decide what truly matters to you and focus there.
If Something Goes Wrong
If the landlord delays the TA, changes terms or refuses to return a deposit you believe should be refunded, start by putting your concern in writing to the agent and landlord, citing the LOI. Keep all messages and receipts. If you cannot resolve it, the Small Claims Tribunals handle many rental deposit disputes; check the eligibility rules and claim limits on the State Courts website. For agent conduct issues, you can contact the CEA.
Explore more: Rental Deposits and Disputes for Newcomers in Singapore · Getting Your Rental Deposit Back · A Landlord’s Guide to the Rental Deposit
Frequently Asked Questions
Can I back out after signing a letter of intent? You can, but you risk losing the good faith deposit. Many LOIs say the deposit is forfeited if you withdraw after the landlord accepts, and parts of the LOI may be binding depending on wording. Read the forfeiture clause carefully before signing.
How much should the good faith deposit be? It is negotiable and not set by law. In common market practice it is often one month’s rent for a one-year lease. Whatever the amount, get it written into the LOI, pay by bank transfer or cheque, and ask for a written receipt.
Who pays stamp duty on the tenancy agreement? Stamp duty is payable to IRAS on the tenancy agreement, and it is commonly paid by the tenant. The LOI itself is not usually stamped. Agree who pays in advance, and check the current stamp duty rules on the IRAS website.
How do I check a rental agent is genuine before paying? Property agents in Singapore must be registered with the Council for Estate Agencies. Search the agent’s name or registration number on the CEA public register, and never pay a deposit for a flat you have not seen in person or on a live video call.
Further reading: Is Airbnb Legal in Singapore? Short-Term Rental Rules Explained