Written reply to PQ on protection against unfair business practices for small retail subtenants in commercial properties

Question:

Dr Charlene Chen: To ask the Deputy Prime Minister and Minister for Trade and Industry (a) what measures are in place to protect the rights and deposits of small retail subtenants in commercial properties; and (b) whether regulations can be enhanced to prevent unfair practices. 

Written Answer by Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong

1.                  The Government has worked with the industry to develop the Fair Tenancy Industry Committee’s (FTIC) Code of Conduct for Leasing of Retail Premises in Singapore. The FTIC sets out key leasing principles to facilitate fair and balanced lease negotiations between tenants and landlords. Since February 2024, all qualifying retail lease agreements must comply with the Code under the Lease Agreements for Retail Premises Act (LARPA). In the event of disagreements over lease negotiations or terms, the parties may bring their cases to the Singapore Mediation Centre for low-cost mediation or adjudication under LARPA. 

2.                  The Code stipulates a cap of three months on the security deposits of gross rent that subtenants of small retail commercial properties are required to provide for retail premises of up to 5,000 square feet floor area and a lease term of up to three years. This principle aims to strike a balance between avoiding undue strain on tenants’ cash flow and protecting landlords from the cost of reinstating the unit. 

3.                  The FTIC is undertaking a review of the Code which is expected to be completed later this year.