Rent transfer rules: HDB extends grace period for long-time tenants
- POSTED: 02 May 2014 19:05
The Housing and Development Board (HDB) has extended the grace period for businesses to adjust to a new rule banning the transfer of tenancies among HDB commercial and industrial tenants.
SINGAPORE: The Housing and Development Board (HDB) has extended the grace period for businesses to adjust to a new rule banning the transfer of tenancies among HDB commercial and industrial tenants.
HDB will double the grace period from three to six years for existing commercial and industrial tenants who have already been tenants for at least 15 years as of 16 October 2013, Minister for National Development Khaw Boon Wan said in a blog post on Friday.
HDB reviewed the rule after meeting various groups of tenants, Mr Khaw said.
Some of them have been operating out of the same premises for many years and had asked HDB for a longer grace period to give them more time to make business adjustments.
A significant proportion of them will be retiring in a few years' time, or would be near retirement then.
Mr Khaw said: "I hope the extended grace period would better help them make the necessary business adjustments to dovetail with their retirement plans.
"This concession is a good way to recognise their many years of serving the local community."
About 7,100 long-time tenants, or 40 per cent of HDB commercial and industrial tenants, will benefit from the special concession.
Among them, 77 per cent are aged 55 years and above.
Since October last year, HDB has stopped the practice of transferring tenancies among HDB commercial and industrial tenants, but allowed existing tenants a three-year grace period until Oct 2016 to adjust to the new rule.
Mr Khaw said the old practice allowed the exit of tenants whose businesses were not doing well, but had led to high rental bids by businesses, in the hope of reaping high assignment fees down the road.
Such high rents and assignment fees translate directly to higher operating costs which must eventually be passed on to consumers.
The new HDB rule has been effective, Mr Khaw added.
The average assignment fees for HDB commercial and industrial properties have fallen by about 33 per cent and 42 per cent respectively since.