Committee with landlords, tenants formed to develop framework for tenancy issues

Committee with landlords, tenants formed to develop framework for tenancy issues

A retail assistant cleans the shop shutter as a shop is prepares to be opened in Singapore as the c
A retail assistant cleans the shutters in Singapore on Jun 19, 2020. (Photo: Reuters/Edgar Su)

SINGAPORE: A committee made up of landlords, tenants and industry watchers has been formed to discuss and develop a framework that would address ongoing issues around tenancy practices, the Singapore Business Federation (SBF) announced on Friday (Jun 26).

Called the Fair Tenancy Pro Tem Committee, it had its first meeting on Thursday and aims to complete its deliberations by the end of the year. An implementation timeline for proposed solutions will be drawn up thereafter.

SBF, under which the committee is set up, said that the committee wants to develop a tenancy framework to deal with current and long-term issues, as well as establish industry norms on tenancy practices and terms.

Mechanisms will also be developed to ensure compliance with the framework, and allow parties to seek recourse and resolve disputes, SBF said in a press release. 

READ: Tenants need ‘unprecedented’ rent relief amid COVID-19 outbreak, say retail and F&B groups

The formation of this new committee comes after months of simmering tension between retail tenants and their landlords.

It started off with a tussle for rental relief as the COVID-19 pandemic battered businesses, especially those in the retail, and food and beverage (F&B) sectors, who requested for some reprieve from their landlords who had been given property tax rebates from the Government.

This prompted the Government to step in with laws to mandate landlords pass on their tax savings and provide additional rental waivers.

READ: Amended COVID-19 laws passed requiring landlords to give SME tenants more rental waivers

Last month, five business groups banded together to call for legislation to be adopted to address the long-standing disparity in power between landlords and tenants, which has resulted in what they see as unfair leasing practices.

They said a voluntary Fair Tenancy Framework introduced in 2015 has failed to halt these practices, with none of the private landlords willing to endorse the framework.

The Fair Tenancy Framework Industry Committee (FTFIC) on May 21 put up a 64-page position paper to the Government, in which it laid out 15 recommendations for fair tenancy law and a new commission for enforcement and dispute resolutions.

READ: Businesses call for fair tenancy law to solve ‘growing’ imbalance in landlord-tenant relationship amid COVID-19 outbreak

Commenting on the formation of the Fair Tenancy Pro Tem Committee on Friday, Senior Minister of State for Trade and Industry Chee Hong Tat said: “During my meetings with both landlords and tenants, I have made it clear to everyone that we will not accept a purely voluntary framework like before, as that does not have sufficient teeth to ensure proper compliance.”

He added that the incentive system “must be set correctly to have a positive and sustainable outcome for all stakeholders”.

The committee will be a useful platform to address long-standing issues between landlords and tenants, and find workable solutions to move forward, he said in a Facebook post.

Chaired by Nomura Singapore chairman Michael Lim, the newly formed committee includes members of the FTFIC representing the tenant community, industry watchers and Government representatives. 

It also involves landlords, which are represented by the Real Estate Developers' Association of Singapore and REIT Association of Singapore.

SBF said the committee had its first meeting on Thursday, which marked the “first time” that landlords, tenants and industry experts are meeting to share their challenges and discuss the FTFIC’s recommendations.

“The meeting allowed all parties to share some of their long-standing concerns and clarify each party’s perspective,” the press release said.

“Members agreed that some FTFIC recommendations could be resolved in the near term while others would need further deliberations.

“The committee agreed to work towards developing a tenancy framework that is fair to both landlords and tenants."

As a next step, members have agreed to form working groups to look into specific areas.

“It is timely and imperative that both parties work together to meet the challenges confronting the industry,” said SBF chief executive Ho Meng Kit.

“This is an industry problem that can be better solved by various stakeholders involved. All parties can collaborate to engender the growth of the industry which is facing increasing competition regionally as well as from the online space,” he added.

Source: CNA/sk(ac)

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