Lobby group wants laws for a fair tenancy commission, data sharing

Fair Tenancy Framework Industry Committee submits 15 key recommendations to Ministry of Law and Ministry of Trade and Industry

Singapore

THE Fair Tenancy Framework Industry Committee (FTFIC) has proposed the setting up of a Fair Tenancy Commission (FTC) and a more equitable sharing of information and costs between tenants and landlords, among a list of recommendations that it hopes can be legislated.

Broadly speaking, the FTFIC's recommendations can be broken into three parts:

  • Transparent access to information: FTFIC said it recommends two levels of rental data be made available, namely a public rental info database that is uploaded on a monthly basis, and mall-level productivity and performance data made available by landlords to tenants from whom they require data such as monthly sales data;
  • Fair Tenancy Bill: FTFIC recommends that the government legislate and pass a bill to prohibit undesirable or unfair tenancy practices and behaviour by either landlords or tenants and to promote a more efficient and effective free-market dynamic for this business sector; and
  • Establish a Fair Tenancy Commission to oversee the creation and generation of market-rental data. The FTC can also provide guidance on gaps, disputes, regulate matters between landlords and tenants, and undertake a periodic review and revision to the Fair Tenancy Legislation.

The FTFIC's 15 key recommendations are guided by five principles - incentivising value creation, transparency, protecting tenants from unfair tenancy practices, building a more sustainable ecosystem and instituting the concept of reciprocity - said the commission, which was formed with representation from the Singapore Business Federation SME Committee (SBF SMEC), Association of Small and Medium Enterprises (ASME), Restaurant Association of Singapore (RAS), Singapore Retailers Association (SRA) and Singapore Tenants United for Fairness (SGTUFF).

The commission said in a press briefing on Thursday that it had put forward its position paper and recommendations to the Ministry of Law and the Ministry of Trade and Industry.

But even as FTFIC hopes that its recommendations for legislation and the establishment of a Commission will be adopted, there is recognition that the timeline is uncertain and mutual compromise must be made.

Terence Yow, SGTUFF Representative and MD of Enviably Me Group of Companies, said: "Singapore Retailers Association, Singapore Tenants United for Fairness and Restaurant Association of Singapore have very recently conducted polls in our community to find out how many are applying for relief and how many are intending to. We found out that 10 per cent or more of our communities - that cover retail, F&B and even services - have already filed for relief. And we know that out of the remaining 90 per cent, 80 per cent are planning to or very close to filing for relief in the coming days and weeks, depending on how much more help the landlords provide.

"From there, I think you can make an easy extrapolation to know that if 90 per cent of the frontline business community is filing for relief... we think that half of that community will be in serious trouble (and looking at) closing down significantly or completely in the next month or two."

RAS's Andrew Kwan, who co-chairs the FTFIC, added that while the community is looking forward eagerly to the upcoming fourth package of financial support to be unveiled next Tuesday, "this will not address the existing issues surrounding rents.

"That's something which the landlords have to step forward to look in a collaborative way to work together with tenants," he said. "Otherwise we anticipate a huge tsunami, not only for filings of relief... Because if we cannot find resolution through this period of moratorium made available through this act for temporary measures, what will likely happen is that this is going to translate to actual closures. Actual closures mean also loss of jobs and employment, and in the F&B industry we hire 200,000 workers, so the impact can be very large."

It is worth noting that landlords and relevant associations say they do recognise the importance of ensuring business sustainability and continuity.

The Real Estate Developers' Association of Singapore (Redas) in April issued a statement saying it has been liaising with Reit Association of Singapore (REITAS) members, which own and operate majority of the retail malls and commercial properties in Singapore.

"Members are advised to work closely with their retail tenants to provide further assistance on a win-win approach to ensure business sustainability and continuity," the association said.

Developers such as City Developments Ltd (CDL) have said they have taken steps to "provide further rental relief" for retail tenants; in a press statement on April 28, CDL said this totals over S$23 million in rental and property tax rebates.

CapitaLand Mall Trust meanwhile said in its Q1 results that it had, as of April 30, committed a rental relief package totalling about S$114 million. "This translates into 100 per cent rental rebates in April and May 2020 for almost all the retail tenants, inclusive of the value of property tax rebates. Rental rebate was also granted from March 27 to 31 for tenants ordered to close their premises since March 27, 2020. On top of that, eligible tenants were granted a waiver on their turnover rent and were permitted to use one-month security deposit to offset their rents in March 2020."

When reached for comment, a CapitaLand spokesperson said the company "is committed towards building a sustainable retail ecosystem in Singapore with all stakeholders. As part of this commitment, we have kept and will continue to keep our channels of communication open".

Separately, a landlord who asked to remain unnamed, echoed the sentiment that providing support to tenants will continue to remain a key focus.

But, its spokesperson noted: "A stable and sustainable ecosystem is in the interest of all parties. However, feedback and dialogues from key stakeholders to provide insights are equally important to ensure that initiatives and measures are implemented fairly."

Cynthia Phua, chairperson of SBF SMEC Rental Practices Workgroup, added that while it has been difficult to meet with landlords over the past five years - Ms Phua has been pushing for the Fair Tenancy Framework since 2015 - sentiment might be changing.

"Recently, we had a representative from CapitaLand sit in our work group. So that's a start. We hope that moving forward, we can engage more of the landlords to work further on the fair tenancy framework."

RAS's Mr Kwan added: "Legislation is something that is forward of what is happening currently. But I think for viability of existing businesses, we're not waiting for legislation to come to pass. We highly encourage tenants and landlords to go and have those fruitful conversations so that in the immediate term, jobs can be saved and businesses can be saved."

Additional reporting by Lynette Tan.

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