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The committee also urges the government to legislate and pass a Fair Tenancy Bill to prevent unfair and undesirable tenancy practices and behaviour by either tenants or landlords.
The Fair Tenancy Framework Industry Committee (FTFIC) has called on the government to pass a fair tenancy law to address the growing imbalance in landlord-tenant relationship.
Comprised of five business groups – namely Association of Small and Medium Enterprises (ASME), Singapore Business Federation SME Committee (SBF SMEC), Restaurant Association of Singapore (RAS), the Singapore Tenants United for Fairness (SGTUFF) and Singapore Retail Association (SRA), the newly established committee raised 15 recommendations in a position paper presented to the Ministry of Law as well as the Ministry of Trade and Industry, reported CNA.
Read: Rental Relief Guide for Commercial Tenants during COVID-19
The recommendations can be divided into three parts – transparency of information, regulation of conduct and enforcement.
The FTFIC wants landlords to provide a public rental information database which is updated monthly and a mall-level productivity and performance data.
Currently, landlords can access the sales data of tenants via the point-of-sale systems, while tenants have scant information on the mall’s footfall or performance, said FTFIC Chairman Kurt Wee, adding that the lack of information reciprocity led to “lopsided” rental negotiations.
The committee also urges the government to legislate and pass a Fair Tenancy Bill to prevent unfair and undesirable tenancy practices and behaviour by either tenants or landlords.
They also recommended the mandatory addition in leases of an “adverse circumstances clause”, having a security deposit limit and for rents to be calculated using a base rent formula as well as a negotiable gross turnover component.
They also sought the setting up of a Fair Tenancy Commission which will oversee the generation and creation of market rental data.
The commission could also provide guidance on disputes and gaps, undertake periodic review of the legislation and regulate matters between tenants and landlords, said the position paper.
SGTUFF representative and business owner Terence Yow described the fair tenancy law as “a long overdue course of action”. He believes that many businesses on the frontline would have been spared from the “unnecessary pain” of closing or laying off employees amid the virus outbreak should there have been one in place.
FTFIC Co-chairman Andrew Kwan noted that around 26% of revenue by an average restaurateur is allotted for rental payments, while another 65% or so to manpower and goods costs.
Government support helped alleviate labour costs, leaving rent the “elephant in the room … (that) is dragging operations down”, said Kwan, who also serves as RAS Vice President.
“If there is no light in sight, there is a grave danger that many SMEs would rather cut losses at this point in time,” he said. If that happens, it could lead to a “sudden and severe uptick” in unemployment, he added.
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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