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The Fair Tenancy Framework has been “unsuccessful in creating a level playing field in the rental terms between landlords and tenants”, according to SG Tenants United for Fairness.
The current tussle between landlords and tenants in Singapore over rental rebates and support amidst the Covid-19 outbreak emphasized the uneven relationship between the two parties, prompting more than 300 mall tenants to call for the review of the Fair Tenancy Framework.
Aside from pressing for additional rental aid from landlords, the growing group of tenants called for the reworking of the Fair Tenancy Framework to ensure fair play beyond the outbreak, reported The Business Times.
Launched in 2015, the Fair Tenancy Framework has been “unsuccessful in creating a level playing field in the rental terms between landlords and tenants”, according to SG Tenants United for Fairness.
Among the notable imbalance complained of is that most rental agreements provide for a high fixed-base rent, and only 1% to 2% is based on the variable gross turnover of a business. Such arrangement protects landlords in times of low sales.
The group advocates for a fairer structure where rental agreements will comprise a higher or full variable gross turnover component.
“We seek to work closely with landlords to fully appreciate each other’s situation and come up with win-win solutions for both the short- and long-term good of the industry, thus reflecting the true symbiotic nature of the tenant-landlord relationship,” they said.
Accordingly, the group already met and shared its plans with trade associations such as Singapore Retailers Association (SRA), as well as government bodies like the Enterprise Singapore and have “received support” for their position and action plans.
The chair of the Singapore Business Federation’s SME Committee, Kurt Wee, believes that the action is timely.
Wee, whose committee led the development of the framework before, asserted that they have long been promoting “rental transparency and have been pushing for landlords to recognise and endorse the framework”. Unfortunately, the landlords, “haven’t been forthcoming”.
In fact, it was only government agency JTC Corporation that backed the framework.
“Our ask for help simply comes from a crisis situation that exacerbated a pre-existing condition,” said one representative who operates in fashion retail since 2003.
SRA, for its part, opined that a reworking of the current Fair Tenancy Framework is “definitely in the works”, adding that the relationship between landlords and tenants is “symbiotic and needs to be managed on fair, level terms for both parties … if we want the retail industry to thrive”.
Meantime, the group of mall tenants seek 50% rebates off three months’ rent from landlords, as aid for the present difficulties in their businesses due to the Covid-19 outbreak.
While the existing measures being offered, such as savings from the property tax rebate and the use of security deposits to offset rent, are helpful, it is still insufficient to get the business through a prolonged outbreak.
As of now, almost half of the 53 members surveyed said that they have already started to lay off staff.
The group plans to engage in a collective negotiation with landlords this month but noted that no street protest nor shop closures will be made.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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