The agent should verify a foreign tenant's immigration and employment status before the tenancy
A worked RES examination question on private residential tenancy, from our Paper 2 bank — with the rule it turns on, and why each of the four options is right or wrong.
The question
Mr Tan is leasing his private condominium unit to a foreign professional through his agent, Rachel. The tenant is keen to sign quickly and by email, and asks Rachel to reassure him that an emailed agreement will save him the stamp duty. Before the tenancy begins, Rachel runs through the standard checks and who bears which cost.
Consider the following statements.
- (i) The tenant is the party responsible for paying the tenancy stamp duty.
- (ii) Because the agreement is signed electronically, it is not a dutiable document.
- (iii) Mr Tan, as landlord, remains liable for the property tax on the unit.
- (iv) Rachel should verify the prospective tenant's immigration and employment status.
The answer, and why
Answer: D
The rule. On a private lease the tenant pays the tenancy stamp duty and the landlord keeps the property tax. A lease is dutiable even when signed electronically. The agent should verify a foreign tenant's immigration and employment status before the tenancy.
Why D is correct. (i) tenant pays duty, (iii) landlord pays property tax and (iv) verify the tenant's status are right; (ii) is false — an e-agreement is still dutiable.
The other options.
- A drops (iv), the status check.
- B drops (i), the tenant's duty.
- C adds the false (ii), the e-agreement exemption.
Exam note. Tenant = stamp duty; landlord = property tax; electronic signing does not remove duty.
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