FAQs

Under the Act, an aggrieved party can elect to file a complaint of non-compliance with an authorised dispute resolution body, if the signed lease agreement (i) does not comply with the leasing principles set out in the Code, or (ii) if a leasing principle incorporated into the lease agreement has not been complied with. He must do so within 14 days after (i) signing the lease agreement (or settlement agreement, where relevant), or (ii) the date of the alleged non-compliance. The complaint will then be dealt with through mediation, and if unsuccessful, through adjudication.

The adjudicator can vary the lease agreement to correct the non-compliance or he may order compensation that is in accordance with what is prescribed in the Code.

Please refer to SMC’s website for more details.

This is subjected to negotiation between tenants and landlords. If the tenants and landlords agree to integrate their POS systems, the cost of integration is to be shared equally between both parties.

In the event when both parties agree to the integration, but tenant is an existing tenant with existing POS system which is not compatible with landlord’s, the cost to purchase a new POS system and the cost for integration are also to be shared equally between both parties.

Landlords and tenants are strongly encouraged to negotiate in the spirit of forming a symbiotic and collaborative relationship, and seek to see how each party’s requirements can be addressed.

Yes. If mutually agreed, both landlords and tenants may pay for the POS integration fee charged by their respective vendors (on the same basis as POS maintenance fees).

New tenants that are required to integrate their POS system with landlords should purchase a compatible POS system at the onset, and this will be part of tenants’ business setup cost. For new tenants, only the POS system integration cost will be shared equally between landlords and tenants.

Yes, tenants will have to bear the cost (either in the form of legal fee or admin fee, but not both) for both the landlord and tenant, if they make request to make changes to a lease agreement that is already CoC compliant.

All third-party costs which are to be borne by tenants must be clearly communicated upfront to tenants. Where the actual cost quantum is not known upfront, landlords can communicate an estimated quantum or a range of the expected quantum, and follow-up subsequently with the actual cost quantum when determined.

No. Submission of audited sales report is only required for tenants that have rent structures that includes GTO (i.e. only applicable when rent structure is percentage GTO rent or base rent + percentage GTO rent).

Landlords will provide tenants a panel of auditors to choose from and must inform tenants of the fees upfront when the audit is requested. These fees will be shared on a 50:50 basis. Landlords must also provide an estimated fee for the audit.

This is when the landlords have obtained consent of all the tenants to purchase electricity for the entire premises. The selection of the electricity retailer and negotiation for the rates is done on behalf of all the tenants.

The landlords will be the master-metered account holders and will provide electricity to the tenants who are the sub-metered account holders. For more information on the En-bloc Contestability Scheme please refer to the Open Electricity Market website.

Tenants may procure their own electricity from their preferred electricity retailer if the premises they are leasing is not on the En-bloc Contestability Scheme, as long as the existing physical infrastructure of the building can support this.

If the premises is on the En-bloc Contestability Scheme, tenants are unable to procure their own electricity from retailers.

Landlords are required to abide by the guiding principles to all chargeable costs, including electricity charges:

• There must be transparency, for example an upfront disclosure of chargeable third-party costs to the tenants must be made.
• The fees must be legitimate and justifiable in order to cover real costs (e.g. labour costs in coordinating work).
• There must not be profiteering.

The landlords must be able to justify the rates charged to tenants in cases of disputes.

There is no cap on the administrative fees charged by landlords. However, the administrative fees must be legitimate and reasonable. The spirit of the CoC is that there should be no attempts to unfairly profit or take unfair advantage of the other party.

The administrative fee must also be communicated upfront and tenants may negotiate with the landlords for a reasonable administrative fee.

Reasonable administrative costs are legitimate and justifiable costs incurred by the landlord in the administration of the bulk electricity purchase agreement (e.g accounting for conversion of high tension to low tension supply, billing etc). Such administrative costs will need to be communicated upfront to tenants.

The Code of Conduct applies to Master leases for retail premises signed on or after 1 February 2024. The Head Lessor should review their Lease Agreement to comply to CoC at the earliest opportunity during a lease/rent review.

The administrative fee charged should be the same for all tenants within the same building under the En-bloc Contestability Scheme, unless additional administration is required for the purpose of conversion between high and low tensile electricity. In such instances, all tenants that requires conversion between high and low tensile electricity should be charged the same administrative fee.

For leases with longer tenure where escalating cost over time could be a concern, landlords and tenants may negotiate and provide for rental escalation over time in the lease agreement.

No. Tenants will not be required to do so, and also will not be required to make any payment in lieu of reinstatement.

Landlords are only entitled to pre-terminate the lease of any premises if the intention is to carry out substantial redevelopment, asset enhancement or reconfiguration works under the following conditions:

• If they intend to carry out substantial redevelopment works and requires
  vacant possession of tenant’s premises. Not when it is for minor works.
• Give no less than 6 months’ prior written notice to tenant.
• Pay compensation sum based on the Agreed Declared Value of the Tenant’s Fit Out Capex Works.
• Inform tenant of proposed works when written permission from URA to carry out the redevelopment works is obtained prior to signing of the lease.

Tenants are allowed to pre-terminate under the conditions when:

• Business principal (i.e. the originator of the goods and/or services that the tenant has obtained the rights to sell the goods and/or provide the services which is being retailed at the premises) is insolvent; or loss of distributorship or franchise rights not due to non-performance or breach.
• Give no less than 6 months’ prior written notice to landlord and pay landlord a compensation sum equivalent to the security deposit amount.
• Tenant may request to assign the lease to a replacement tenant, subject to landlord’s approval.

Paragraph 4 of the CoC clause applies to all pre-termination by landlords due to landlord’s redevelopment plans. For cases where it is purely and fully due to government redevelopment plans (e.g. land acquisition), landlords and tenants should work out a mutually agreeable compensation, taking into account (i) the compensation landlord is receiving from Government, and (ii) the principles on compensation in Paragraph 4 the CoC. In the event that the landlord is of the view that the compensation from the Government does not adequately cover compensation to be paid to the tenant(s), the landlord should work with the tenant(s) to bring the case up to relevant authorities to seek additional compensation.

When the landlord accepts the estimated cost of Tenant’s Fit Out Capex Works as the Agreed Declared Value, the tenant need not be required to submit to the landlord the fit-out invoices for verification of actual expenses incurred. Compensation shall be based on the estimated cost as the Agreed Declared Value.

As a general rule, sales performance clauses (e.g. a clause which allows landlord to penalise the tenant in any manner, such as pre-termination of the lease, if the tenant does not fulfil a stipulated sales target) must not be included in the lease agreement.

On an exceptional basis, if both parties agree to include a sales performance clause in the lease agreement, such sales performance clause may be included in the lease agreement.

While not mandatory, tenants and landlords are encouraged to re-negotiate the lease agreement in cases where the tenant is prevented, obstructed or hindered from performing its typical business activity at the leased premises due to events beyond tenant’s control.

For escalating rental structures, as long as the security deposit collected does not exceed three months gross rent of the highest rent amount of the lease term, it will be CoC compliant. Example: First year rent is $3,000, second year is $3,500 and third year is $4,000. As long as the security deposit collected does not exceed three months gross rent of $12,000, it is compliant.

An exception will be made when the security deposit collected is $500 or less but exceeds the sum of three months’ gross rent. The need to file for deviation will be waived for such instances.

Landlord and tenant may mutually agree to forego the need to have a surveyed area certificate:

• for floor area of premises 300 square feet and below; or
• when both parties mutually agree to accept building plans from the relevant authorities as an alternative to a floor survey, provided that there are no revisions from the original plans.

Yes. If the responsibility of maintenance of the building / parts of building is mutually agreed to be undertaken by the tenant, such commercial terms can be negotiated and the areas of maintenance by the landlord and/or tenant are to be specifically stated in the lease agreement. CoC’s leasing principle on building maintenance will not apply if such an agreement in the lease is included. The landlord shall indicate “Not Applicable” in CoC checklist’s leasing principle on “Building Maintenance”.

The clause on building maintenance applies for cases where the landlord is responsible for the maintenance of the building and there is gross negligence or wilful default on the part of the landlord. For cases where the landlord is not responsible for the maintenance of the building, the clause would not apply.

The CoC’s guiding principle of reciprocity when applied to rent formula, would mean the sharing of both upside gains and downside risks of tenant’s monthly sales, if the rent formula contains any turnover element. In the example given, the landlord benefits from increased sales from the tenant but does not share in the downside risks when sales drop. Therefore, it is not CoC compliant, and deviation will have to be filed if this is the mutually agreed rent formula.

In general, the following types of rent formulas are CoC compliant:

• Fixed rental with no GTO – e.g. $X psf, or $Y per month.
• Rental with GTO component that applies from the first dollar of GTO – e.g. Y% of GTO, or $X psf + Y% of GTO.

Any rent formula that requires tenants to pay a higher total rent on account of a higher GTO, but not a lower total rent when GTO is lower, is not CoC compliant as these are effectively “whichever is higher” rent formulas. Mutual agreement and declaration to FTIC would be required for non-CoC compliant rent formulas.

Landlords who collect sales data from tenants to compute rental based on Gross Turnover must share sales data by trade category on a confidential basis before new lease is signed. For existing tenants, the data must also be shared on a bi-annual basis. For reasons of confidentiality, sales data will not be shared where the number of tenants for the relevant trade category is less than 3.

An example of the type of data to be shared can be seen in the table on page 33, para 1 of the CoC – trade category, no of units, total monthly sales turnover, etc.

The Code is a living document and will continue to be maintained and updated by the FTIC, based on feedback from stakeholders and changing industry needs. Feedback and enquiries can be submitted through the FTIC website. Alternatively, the FTIC can be contacted by email or phone. Landlord and tenant representatives may also reach out to the FTIC via their TACs or business advisors.

A Filing fee of $100 per deviation (excluding GST) will be imposed from 1 Feb 2024. Landlord will pay for the fees first when filing for the declaration on the FTIC website, and landlord and tenant must share the filing fees on 50:50 basis.

The FTIC website has a link to the user-friendly online portal that landlords can use to submit their declarations of deviation. It utilizes SingPass-integrated login, and also includes streamlined forms for the landlord to enter tenancy details and reasons for deviation. A filing is done once the landlord has completed this step. After submission by a landlord is done, the declaration will automatically be routed to the tenant to review and acknowledge the landlord’s submission.

The FTIC website also has a guide to file a deviation, which states that both parties can authorize a 3rd party with NRIC/FIN to file or acknowledge the joint declaration.