Early Termination Of Tenancy Agreement

[dreamroof 0]

I am entering a 12-month tenancy agreement with the help of an agency. On close reading of the agreement, it seems to be a rewording of the standard HDB tenancy agreement to include clauses that will protect the agency's interest in two ways:

1. in the event of termination, it is spelled out that neither the landlord nor the tenant can seek compensation from the agency for the commission of the unexpired terms of lease.

2. in the event that the tenancy is extended at the prevailing rate, the agency is entitled to receive further commission from the new transaction.

This practice seems to be common in most real estate agencies' standard tenancy agreement. I have no particular concern over the agency wanting to protect their own interest. However, there does not seems to have any clause to spell out the consequences of an early termination that was initiated by the tenant.

To make things worse, the agreements typically will state that if the tenancy agreement was terminated by the landlord prematurely, the landlord is obliged to refund the deposit as well as pay the tenant the rent due for the unexpired terms of lease. These tenancy agreements seem to protect the interest of the tenant more than it protects the landlords' interests.

I understand that agents typically will feel uncomfortable about discussing the consequences of breaking an agreement with the tenant but I believe that an agreement should minimally cover aspects of the agreement that is likely to create ambiguity or cause disputes.

As a "landlord", I tried to add in the following clause to state the consequences of early termination just to protect my initial investment into the furnishing of the unit:

"In the event of the tenant terminating the rental agreement before the expiry of the agreed tenancy, the tenant shall pay the full rental due for the unexpired terms of lease to the landlord."

However, the tenant's agent tried really had to make things difficult by saying that it is an unfair clause and insisted on adding in the following clause as a counter:

"In the event of the landlord terminating the rental before the expiry of the agreed tenancy, the landlord shall pay the full rental due for the unexpired term of the agreement to the tenant."

While the last clause seems redundant in the presence of the early statement regarding the sale of the property in the midst of the tenancy, it exposes the landlord to the risk of compounded loss if the sale of the HDB property was under circumstances beyond the landlord's control. For example, in a forced sale by the government due to en bloc or change in housing policy.

I attempted to amend the clause added by the tenant's agent, by including the caveat "except under circumstances mandated by the government, beyond the landlord's control."

What is your opinion?

Is it necessary to spell out the consequence of early termination even in the standard HDB tenancy agreement?

Is the landlord's added clause and caveat to the tenant's request unfair?

What should I do so that both the tenant and the landlord can enter an agreement that will take care of each other's interest yet not be sources of disputes in the future if things did not pan out well?

Thanks in advance,

dreamroof

Edited January 1, 2012 by dreamroof

[yoongf 11]

You do not have to include any mention of tenancy extension with agency. U are the client, why do u let your supplier dictate the terms of the appointment?

There are tenacy agreements which are pro-tenant, and there are tenacy agreements which are pro-landlord. Which would u like to use?

Do not get intimated by the tenant's agent. U are the landload, and u are putting much more at risk compared to the tenant. Landlord shd be dictating the terms.

According to the tenant's agent argument.. if the tenant fail to pay rent.. and u decide to evict him, then landlord still have to compensate the tenant for early termination?

My opinion is simple.. u are the landlord and u should be calling the shots. If the tenant does not recognise this balance of power, are u comfortable passing a 500K or more investment to such a tenant? This type of tenant, I rather not have.

U have to understand 1 thing. An agreement is meaningless unless u go to court to get it enforced. Obviously, u have assets that looks attractive to a plaintiff. Now, can the same be said for this tenant? Therefore, Who shd be calling the shots?

Edited January 2, 2012 by yoongf