- The COC was first introduced on 26 March 2021 to set out “clear leasing guidelines and negotiation principles for landlords and tenants of qualifying retail premises in Singapore”.1 Since its introduction, it had gone through a subsequent modification on 15 March 2022.
- If the proposed Lease Agreements for Retail Premises Bill (the “Bill”) is passed, statutory effect will be given to the leasing principles as embodied in the COC. These leasing principles are:2
- Costs to prepare the lease agreement and third party costs;
- Advertising and promotion charge and service charge;
- Pre-termination by landlord due to landlord’s redevelopment work;
- Sales performance;
- Material adverse change;
- Pre-termination by tenants;
- Security deposit;
- Floor area alterations;
- Building maintenance; and
- Rental structure
- The Bill was tabled for its first reading in Parliament on 4 July 2023. Under the proposed legislation, landlords and tenants of qualifying retail leases must ensure that their lease agreement “complies with the leasing principles in force at the time the lease agreement is signed.”3 Such leases include retail leases with a period of a year or more, signed or renewed from the date that the proposed legislation take effect.4
- The proposed legislation allows landlords and tenants to deviate from the leasing principles in certain situations. Such deviations are referred to as permitted deviations. Landlords must submit to the Fair Tenancy Industry Committee a declaration of permitted deviation if required by the leasing principles.5
- A “declaration of permitted deviation” refers to a joint declaration by the landlords and tenants stating that they have agreed on a permitted deviation in relation to the lease agreement.6
- The declaration of permitted deviation must be submitted to the Fair Tenancy Industry Committee within 14 days after signing of the lease agreement.7 Otherwise, the permitted deviation may be void.
- If you wish to find out more or have any queries on the above, please do not hesitate to contact our Real Estate (Leasing) practice group.
1 Page 1 of the COC, a copy of which is published at “Code- https://www.ftic.org.sg/wp- content/uploads/2022/03/Code-for-Leasing-of-Retail-Premises-V2-15-Mar-22.pdf for-Leasing-of- Retail-Premises-V2-15-Mar-22.pdf (ftic.org.sg)”.
2 Part B of the COC.
3 Clause 6(1) of the Bill, which is accessible at “47f67ed6-ceb0-4a0f-969f-f2f8862be292 1..43 (parliament.gov.sg)”.
4Clause 2(1) read with the First Schedule of the Bill.
5 Clause 6(2) of the Bill.
Lee Soo Chye
Disclaimer: The material in this article is prepared for general information only and is not intended to be a full analysis of the points discussed. This article is also not intended to constitute, and should not be taken as, legal, tax or financial advice by Wee Swee Teow LLP. Any illustrations used in this article may not be applicable or suitable for your specific circumstances or needs and you should seek separate advice for your specific situation. Any reference to any specific local law or practice has been compiled or arrived at from sources believed to be reliable and Wee Swee Teow LLP does not make any representation as to the accuracy, reliability or completeness of such information.