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Retail, F&B players in Singapore to push for fair tenancy legislation

Retail, F&B players in Singapore to push for fair tenancy legislation

Source: Business Times
Article Date: 15 May 2020
Author: Mindy Tan

Businesses have highlighted various unfair clauses, including personal guarantee clauses or offering "rent-free months" instead of officially lowering rents.

Industry stakeholders from the battered retail and F&B sectors will be pushing for the adoption of landlord-tenant legislation in Singapore, when it unveils its list of recommendations on May 21.

The Fair Tenancy Framework Industry Committee (FTFIC), formed with representation from the Singapore Business Federation SME Committee (SBF SMEC), Association of Small & Medium Enterprises (ASME), Restaurant Association of Singapore (RAS), Singapore Retail Association (SRA), and Singapore Tenants United for Fairness (SGTUFF), collectively represents more than 10,000 companies, said ASME president Kurt Wee.

Businesses and market watchers invested in this fight have long highlighted the various unfair clauses imposed by landlords, including personal guarantee clauses or offering "rent-free months" instead of officially lowering rents, thus keeping rents artificially inflated.

BT also understands that some of these unfair practices include selling electricity to tenants at 20-30 per cent mark-ups, even as the government has sought to liberalise the energy market.

But while steps have been taken to level the playing field - a committee under SBF came up with the Fair Tenancy Framework five years ago in a bid to develop greater transparency in rental information, educate and generate more awareness to help small businesses, and create a preferred dispute resolution channel - this issue has continued to bubble under the surface.

In May last year, BT reported that SBF was in the midst of a last big push to get private landlords to support and adopt the tenets outlined by the framework.

This issue re-emerged in the spotlight in recent months as the plight of tenants was exacerbated by Covid-19 and subsequent circuit breaker measures. Things finally came to a head earlier this year and the government had to resort to legislation to ensure that landlords pass on their property tax rebates in full to their tenants.

Ann Goh, who runs Simply Toys, Toy Outpost and Hako stores, said: "We are just trying to earn enough cash flow to pay for expenses... I told my team 'please sell things to earn enough cash to pay for your salary'."

Ms Goh said both wholesale and retail sales have been badly hit since February and that they have started new sales initiatives like conducting auctions and live sales on Facebook.

"Retailers have been squeezed by landlords for far too long. We have been mistreated and I always feel I am just earning enough to 'work' for the landlords. I closed three shops last October and three shops this May (all natural lease expiry) because they are asking for so much more (and) I do not think it will be a wise business decision to make so little (while) taking on so much risk," she said.

Earlier this week, The Straits Times reported that the Competition and Consumer Commission of Singapore (CCCS) is looking into the private retail lease market and has disseminated a survey soliciting feedback from tenants on market competitiveness and lease terms as part of its market study.

The aim is to better understand the market structure and identify any anti-competitive practices. The feedback from firms will give government agencies a more holistic view of the private retail lease market and identify issues that need to be addressed.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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