It is important to have termination or exit clauses in the Tenancy Agreement and to understand the terms and consequences before making any decision to terminate the tenancy agreement unilaterally.
Tenants should ask for early termination clauses in their lease agreements if they are likely to move out earlier.
For example if you are renting temporarily while waiting for your home to be built. You should ask for terms that allow you to terminate the lease earlier without incurring penalty if there is a possibility that you could move into your new home ahead of schedule.
A clause that lets you give three months’ notice if you need to leave earlier could save you from having to pay the remaining months of the lease.
This is especially crucial for those who are likely to move out earlier as a result of being deployed to work in another country by their company.
However do take note of the minimum rental period of 3 consecutive months for private properties and 6 months for HDB flats, which is stipulated by the respective authorities.
There are common exit clauses drafted in the Tenancy Agreement that are straightforward such as the following:
1. The Diplomatic Clause
This clause is usually application for expatriates and can be activated after one year of continuous stay. In the event that the tenant is transferred out of the country by the company or is terminated by the company, the tenant is permitted to serve notice to the landlord to terminate the lease early. Do note that this must be supported with documentary evidence from the tenant’s employer.
2. En-Bloc Clause
If the current development that you are staying in is undergoing a collective sale or has concluded a collective sale, you will have to follow the notice given by the developer or competent authority for the date of vacant possession.
3. Damage or Destruction
For example if there is a fire that has caused severe damage to the flat leading it to be inhabitable, the tenancy agreement can be terminated. Such damages take time to repair and restore to a habitable condition and tenants cannot be left homeless.
4. HDB Revokes or Withdraws Its Consent
For HDB flats, Landlords are required to submit an application to HDB for approval and they are required to update any changes in the tenants’ particulars or details. In the event of a policy change or breach in guidelines, HDB may decide to revoke or withdraw its consent for the rental.