Letter of Intent and Good Faith Deposit: What You Are Actually Committing To

Almost every private rental in Singapore starts with the same two-page document and the same bank transfer, and almost nobody reads the clause that decides who keeps the money. The letter of intent is not the lease. It still sets the rent, the term, the minor repair cap and the diplomatic clause, and once the landlord signs the acceptance copy those terms are very hard to move. This guide works through a standard agency LOI clause by clause, prices what actually leaves your account before the keys do, and flags the one obligation the template quietly leaves for later.

What is a letter of intent in a Singapore rental?

A typical agency template runs to fifteen numbered clauses. Rent is stated per month and inclusive of maintenance charges, the period of lease carries an option to renew at prevailing market rate, and the security deposit is expressed in months, payable on or before execution of the tenancy agreement. Then come the terms that quietly decide how the next two years feel: a minor repair cap, with everything below a stated figure per item borne by the tenant and the excess by the landlord, and the landlord fully responsible for all repairs in the first month; a diplomatic clause exercisable only after twelve months’ occupancy, on two months’ notice or two months’ rent in lieu; stamp fees borne by the tenant; utilities and telco accounts in the tenant’s name; and air-conditioning split so that the landlord services the units before commencement, the tenant services them quarterly, and the landlord pays for repairs.

That list is worth pausing on, because those are the clauses you can still negotiate. Once they are accepted, they are copied into the tenancy agreement almost verbatim. Our guide to the tenancy agreement clauses every renter should know covers what each one does over a full term, and the diplomatic clause explained covers the exit most expatriate tenants eventually use.

How hard you push depends on the market you are pushing into. URA recorded private residential rentals up 0.7 per cent in the second quarter of 2026, with non-landed homes up only 0.4 per cent, the Core Central Region up 1.2 per cent and the Outside Central Region down 0.3 per cent, against a 6.4 per cent vacancy rate for completed private homes. A suburban unit in that market gives you more room to amend an LOI than a prime-district one.

Is a letter of intent legally binding?

In practice the LOI does two things. It records the commercial terms so the tenancy agreement can be drafted from something, and it takes the unit off the market. It also takes you off the market, which is the part tenants underestimate: you stop shortlisting, and if the deal collapses in week three you restart from zero.

Two dates control the whole document: the signing deadline, being the working days from acceptance within which the tenancy agreement must be signed, and the lapse of offer clause, under which the offer expires and any monies must be returned if the landlord has not accepted by then. Leave either blank and you have handed over a month’s rent against an open-ended promise.

How much is the good faith deposit and where does it go?

Market conventions for private residential leases in 2026, not quotations. Stamp duty rates are IRAS lease duty; amounts and who pays them are always negotiable between the parties.

Put real numbers on it. A two-bedroom condominium at S$4,500 a month on a two-year lease attracts a good faith deposit of S$9,000, which then stands as the security deposit rather than being returned and re-paid. Stamp duty is 0.4 per cent of the total rent over the term, so 0.4 per cent of S$108,000, or S$432. Add the first month’s rent and roughly S$13,932 has left your account before you hold a key. By convention the tenant pays the stamp duty, but the Stamp Duties Act makes landlord and tenant jointly liable, so IRAS can pursue either if it goes unpaid: our guide to tenancy agreement stamp duty sets out the calculation and the deadlines.

When is the good faith deposit forfeited, and when do you get it back?

Read your own document before relying on that summary, because this clause is frequently drafted badly. One widely circulated agency template states that where the terms cannot be agreed in time “the Landlord shall forthwith forfeit the goodfaith deposit to the Prospective Tenant”, using forfeit where it means return. The intent is clear enough from context, but a clause that says the opposite of what it means is exactly the clause you do not want to be arguing about later. Ask for it to be rewritten in plain words: who returns what, within how many days, to which account, and with no deduction or interest.

The harder problem is proof. Once negotiations break down both sides claim the other caused it, and there is rarely a clean record of who moved the goalposts. The real protection is settling the material terms in the LOI itself rather than leaving them to the draft tenancy agreement, and keeping every exchange about them in writing. The evidence discipline that wins a security deposit dispute two years later starts here.

What should be written into the LOI before you pay?

1. Fill in the signing deadline. Seven to fourteen working days from acceptance is normal. A blank here means the deposit sits with the landlord indefinitely.
2. Fill in the lapse date. The offer should expire if the landlord has not accepted it, with any monies returned immediately.
3. Rewrite the refund clause in plain words. Name the circumstances, the number of days for repayment, and the account.
4. Put a figure in the minor repair cap. S$150 to S$300 per item is the usual band. Our guide to the minor repair clause explains how the cap behaves per item rather than per year.
5. Spell out the diplomatic clause. Twelve months’ occupancy, two months’ notice or rent in lieu, and say plainly whether the agent’s commission is to be refunded pro rata.
6. Pin the air-conditioning split. Landlord services before commencement, tenant services quarterly, landlord pays repairs. Chemical washes are a separate scope and should be named as such.
7. Require an inventory at handover. Say the tenancy agreement will attach a signed inventory with dated photographs. Our move-in inventory guide covers what a defensible record looks like.
8. Name the reinstatement standard. The template does not have one, which is the subject of the next section.

Why is reinstatement the clause the LOI leaves out?

The sequencing is the whole problem. At LOI stage the landlord wants the unit let and has not yet taken it off the market. At tenancy agreement stage your deposit is already forfeitable and your current lease is probably ending, so a clause that could have been two sentences becomes a take-it-or-leave-it paragraph three weeks later.

Four lines are worth adding. That reinstatement is limited to alterations the tenant made, so you are not restoring what you never changed. That fair wear and tear is excepted, which is the distinction our guide to fair wear and tear versus damage works through. That repainting is due only where the tenant repainted or damaged the walls, not automatically at the end of every term. And that the tenant may appoint their own contractor rather than a nominated one, which is where landlord-nominated contractor arrangements tend to become expensive.

The numbers justify the paragraph. Full condo reinstatement runs S$3,000 to S$12,000 for a typical unit, which is comparable to the whole security deposit on the S$4,500 lease above. Get the reinstatement clause right while the good faith deposit is still in your hand, and understand which of your own additions are fixtures rather than fittings before you install anything.

What if the landlord will not return the good faith deposit?

Where the tenancy agreement was never signed, your claim is a contract dispute about the letter of intent rather than a dispute under a lease, so the tenancy head may not reach it. Ask the Tribunals or a lawyer before filing rather than after. Industrial and commercial leases are excluded outright, as is any licence of premises, so a room licence sits outside the process however small the sum.

Whichever forum applies, the evidence pack is the same: the signed LOI, the landlord’s acceptance copy, the bank transfer or cheque record, and the full message thread showing which side stopped responding or changed a term. Send a written demand with a deadline first, because a documented request that went unanswered is worth more at a hearing than the claim itself. Our guide to who actually decides a deposit dispute covers the same escalation for money held at the other end of a tenancy, and getting your full deposit back covers the handover that prevents it.