Quick Answer
When you buy a property "sale with tenancy," you're obligated to honour the existing lease until it ends, so review the actual signed tenancy agreement before the OTP is issued, not just the rental figures you've been told. Check the security deposit and the renewal clause, especially whether the renewal rent is fixed or open to negotiation. And visit the tenant yourself before completion to surface anything the seller may have promised verbally.
Introduction
Buying a tenanted property means inheriting someone else's lease, and most of the problems I see come from buyers who never actually read it.I'm Dennis, a fixed fee property agent with HomeUp in Singapore that charges $1,999 to sell an HDB flat instead of the usual 2% commission. Here are three checks I'd never skip on a sale with tenancy.
Why Should I Review the Actual Tenancy Agreement Before the OTP?
When you buy a property listed "sale with tenancy," you're obligated to continue the existing lease until it ends. Most buyers ask about the rental amount and lease expiry during negotiation, then forget to verify those details against the actual signed agreement before the OTP is issued. Sometimes the owner or the seller's agent has simply misremembered the rental amount or expiry date, with no bad intent involved, but any discrepancy can directly affect your move-in date if you're buying to live in the unit yourself.
If you're buying purely as an investment, check the inventory list too. Furniture or appliances may have been swapped or removed during the tenancy without the list being updated, worth confirming which items actually belong to the tenant before any misunderstanding comes up later.
What Should I Check About the Security Deposit and Renewal Clause?
The standard security deposit is 1 month's rent for a 1 year lease, or 2 months for a 2 year lease. If the current tenant has renewed several times already, some landlords end up waiving or reducing that deposit below the usual amount. This isn't a major concern on its own, your appointed law firm will sort out exactly how much deposit gets transferred to you at completion.
What matters more is the renewal clause itself. Some agreements state the renewal amount is "subject to negotiation," others lock in a fixed figure. A fixed amount agreed two years ago between the current tenant and the seller may not actually benefit you as the new owner, especially in a market where rents have moved up since that figure was set.
Should I Visit the Tenant Before Completion?
Yes, ideally with your property agent. It's good practice to visit the tenant and update them on the impending sale, after the OTP is issued but before completion. Sometimes the seller has made a verbal promise the tenant is expecting, a rent reduction on the next renewal, new air conditioning units, that never made it into the written contract.
Any verbal commitment like that should be raised with the seller, who's morally on the hook to settle it before the sale completes, it's not automatically your obligation to honour just because you're the new owner. This visit also reassures the tenant directly and tends to set up a smoother landlord-tenant relationship once you take over.
How HomeUp Approaches This
Buying a tenanted property means inheriting both a lease and a relationship, and skipping the paper trail on either one tends to surface as a problem only after completion, when it's much harder to fix. At HomeUp, all three of these checks are standard practice before any client commits to a sale with tenancy. [Book a planning call with HomeUp →] [See how we price selling your HDB →]
Conclusion
Read the actual tenancy agreement, not the verbal summary. Check the deposit and pay close attention to whether the renewal rent is fixed or negotiable. And visit the tenant before completion to catch any verbal promises that never made it into writing. Thinking about your next move? [Book a planning call with HomeUp →] WhatsApp +65 8087 7015.
FAQ
Am I obligated to continue an existing tenancy when I buy a "sale with tenancy" property?
Yes, you take over the lease as it stands and must honour it until the current term ends.
What's the standard security deposit for a rental property in Singapore?
1 month's rent for a 1 year lease, or 2 months for a 2 year lease, though this can vary if the tenant has renewed several times already.
Why does it matter whether the renewal rent is "fixed" or "subject to negotiation"?
A fixed renewal amount agreed years ago may sit well below current market rent, which works against you as the new owner if rents have risen since that figure was locked in.
What happens if the seller made a verbal promise to the tenant that's not in the contract?
That promise is the seller's responsibility to honour before completion, not automatically yours as the incoming owner. Visiting the tenant before completion is the best way to surface this kind of issue early.
Should I check the inventory list if I'm buying a tenanted property as an investment?
Yes, furniture or appliances may have changed during the tenancy without the inventory list being updated, so confirm what actually belongs to the tenant before any dispute comes up later.