Lease Agreements for Retail Premises Act 2023 to take effect from 1 February 2024
The Lease Agreements for Retail Premises Act 2023 (“Act”), which mandates compliance with the Code of Conduct for Leasing of Retail Premises in Singapore (“Code”) for qualifying leases of retail premises, will take effect on 1 February 2024. The Code enables a fair and balanced lease negotiation process that will support the growth of retail businesses and strengthen the symbiotic relationship between tenants and landlords in the long run.
Application of the Act
Under the Act, the landlord and tenant of a qualifying lease must ensure that the lease agreement for that qualifying lease complies with the leasing principles in the Code which are in force at the time the lease agreement is signed.
A “qualifying lease” refers to a lease for retail premises with a tenure of one year or more where the agreement for the lease, or extension or renewal thereof, is signed on or after 1 February 2024, whether or not the lease, extension or renewal is expressed to be governed by Singapore law. Premises are retail premises if they are used primarily for the sale of goods by way of retail or the supply of services, e.g. restaurants, supermarkets, clinics, and walk-in bank branches.
Deviations from selected leasing principles are permitted with mutual consent by tenants and landlords. Where there is a permitted deviation in the lease agreement, the landlord must, if required by the leasing principle in question, submit to the Fair Tenancy Industry Committee (“FTIC”) within the prescribed period a declaration of permitted deviation. Failure to do so may render the permitted deviation void in certain situations.
For more information about the Act, please read our article titled “Bill passed to mandate compliance with Code of Conduct for Leasing of Retail Premises for qualifying leases of retail premises, expected to take effect in February 2024”.
New edition of the Code of Conduct for Leasing of Retail Premises in Singapore
The FTIC has released a revised version of the Code (Third Edition, 1 November 2023) which will apply to qualifying leases of retail premises signed on or after 1 February 2024. The FTIC has provided a summary of the amendments.
The Code sets out the 11 leasing principles for key tenancy terms including exclusivity, costs for preparation of lease agreement, advertising and promotion charge, pre-termination due to landlord’s redevelopment works, pre-termination by tenants, and sales performance. The Code also sets out leasing principles for confidentiality clauses and data transparency.
Reference materials
The following materials are available from Singapore Statutes Online sso.agc.gov.sg and the Fair Tenancy Industry Committee website ftic.org.sg:
