Clause for a cause to evict errant retailers

Clause for a cause to evict errant retailers
Business remains slow on the first and second floor of Sim Lim Square, with sales dropping by more than 50 per cent for some shops. Most of the errant retailers have closed down and the daily complaints that the management used to receive have stopped.

Sim Lim Square is a mall best known for its electronics stores - and, occasionally, traders who indulge in unsavoury sales tactics.

Now its landlords are being given the chance to evict tenants who misbehave, by tweaking new tenancy agreements to include a special clause.

It could mean, for example, that a trader who receives a set number of customer complaints a month can be kicked out.

On Dec 30, the mall's management corporation strata title (MCST) council issued sample clauses to the 300-plus landlords in a four-page circular.

They were drawn up in two weeks by the MCST's lawyer and, among other things, spell out circumstances in which a landlord could kick out a tenant.

One is when the authorities - like the Consumers Association of Singapore (Case) and Singapore Tourism Board - have received five or more consumer complaints against a tenant, its sub-tenant or employee within a month.

They can also be given their marching orders if they have a bankruptcy order made against them, are struck off the Register of Businesses, or are determined by a court to have flouted the Consumer Protection (Fair Trading) Act.

The clauses also make it compulsory for tenants to compensate landlords for some costs when they take back a unit, such as loss of rent.

So far at least 13 landlords - all sitting on the mall's MCST council - have agreed to include the new clauses in their tenancy contracts when their leases expire.

The hope is that more will follow suit - though not all are convinced their tenants will agree to them.

Mr Philip Lee, 52, who rents out two units, said: "I would like to include such rules in my agreements to protect myself, but whether my tenant would agree is another matter. They might not sign if such clauses are put in."

He also wondered if landlords would include the clause because kicking out a tenant would mean inconvenience and rental losses.

The MCST's move comes after Case wrote to the mall in December asking it to make sure landlords enforce stricter rental pacts.

Sim Lim Square's management replied that it is unable to compel landlords to kick out tenants who run dishonest businesses, or to force them to sell their units.

An MCST spokesman said this is still the case but added: "Whether they (the landlords) want to kick tenants out is up to them, but they might have a bit more obligation to take action against their tenants with the new clauses."

Several shops in Sim Lim Square have hit the headlines recently for the wrong reasons.

In November, a Vietnamese tourist was seen on his knees begging for a refund after being allegedly overcharged for an iPhone. Since then, complaints against Sim Lim traders have fallen.

An average of 10 were received each month from January to October last year but just 10 in total were received for November and December - the height of the shopping season. Last month, only two complaints were made.

It seems such negative publicity is taking effect. Two errant traders at another problematic mall, People's Park Complex, shut down in December after being contacted by Case.

The strata-titled mall is working with the consumer watchdog to set up a complaints booth.

Complaints against retailers at Lucky Plaza are also down. The mall received nine last year, down from 30 in 2013 and 63 in 2012.

However, business is quiet at Sim Lim and some shoppers are avoiding it. Senior technical specialist Darryl Chua, 26, said: "The reputation of the mall is not fantastic. I have even less of an incentive to go there now."

This article was first published on Feb 5, 2015.
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