SINGAPORE: Landlords and tenants of retail spaces must follow a code of conduct for lease contracts from next February, after parliament passed a new Bill on Thursday (Aug 3).
The code lays out leasing principles such as landlords not being allowed to mark up electricity rates. Landlords also cannot terminate leases early citing redevelopment works unless they meet certain conditions, such as giving tenants at least six months’ notice.
The code will apply to all retail leases with tenures of at least one year. Eateries, tuition centres and gyms are among the types of businesses covered. Businesses in shopping malls will generally be covered.
Deviations from some leasing principles will be allowed if both landlord and tenant agree.
The Bill also establishes a dispute mechanism. If the code is not complied with and mediation fails, landlords and tenants can be ordered to vary the lease agreement or pay compensation.
The code will be administered by the Fair Tenancy Industry Committee (FTIC) and evolve based on industry feedback, Minister of State for Trade and Industry Low Yen Ling said.
All government landlords and nine major private sector landlords, including CapitaLand Group and Frasers Property Singapore, have voluntarily adopted the code of conduct since June 2021.
WHY IT MATTERS
The COVID-19 pandemic saw rising tensions between tenants and landlords. With the code of conduct, tenants and landlords will have greater clarity on industry norms for key terms in retail lease agreements.
This makes the negotiation process “more transparent” for both parties and addresses the tenants’ concerns over “imbalances in bargaining power”, said Ms Low.
Additionally, the code also supports a “vibrant and healthy” lifestyle sector and contributes to Singapore’s tourism industry.
The retail sector makes up more than 4 per cent of Singapore’s total workforce, hiring 160,000 people. The food services and accommodation sectors employ about 7 per cent of the total workforce, or more than 260,000 workers.
Source: CNA
