Retail lease negotiations to be fairer with mandatory adherence to industry standards
As of February 1, 2024, a new law has been enacted in Singapore, mandating that all retail leases comply with an industry-wide code of conduct, aiming to ensure more balanced and equitable lease negotiations between tenants and landlords.
The Lease Agreements for Retail Premises Act 2023 introduces 13 leasing principles, including preventing landlords from pre-terminating leases unless for redevelopment purposes and regulating the use of gross turnover rents in certain cases.
The code applies to retail leases with a tenure of at least one year, covering leases that are signed or renewed from February 1, 2024. Notably, this law does not apply to industrial, office, or residential leases.
The Act follows the introduction of the code of conduct in March 2021 and a Bill passed by Parliament in August 2023. As of last year, government and some private-sector landlords had voluntarily adopted the code, but this new law will legally bind all stakeholders.
The Fair Tenancy Industry Committee (FTIC), which oversees the code, will handle complaints, with mediation or adjudication as a means of dispute resolution.
Businesses can find resources such as code-compliant lease templates and guides on deviations on the FTIC’s website.
