Fair Tenancy Framework launched with room for refinement

Fair Tenancy Framework launched with room for refinement
Mr Ho Meng Kit, CEO of the Singapore Business Federation (SBF).

THE Fair Tenancy Framework launched on Tuesday, which aims to help small and medium-sized enterprises (SMEs) negotiate fairer tenancy agreements, is a work in progress, says the working group behind it.

The Rental Practices Working Group (RPWG) of the SME Committee (SMEC) says more can be done to refine the guidelines in the framework, which has already won the backing of CapitaMall Trust and Ascendas.

Ho Meng Kit, chief executive of the Singapore Business Federation (SBF), which is leading the push for the voluntary adoption of these guidelines by the industry, said getting buy-in from landlords was critical, and noted that support had already come from CapitaMall Trust, a major retail landlord, and Ascendas, a major industrial landlord.

He said the government had also indicated its support for the framework, "so we do not see that, fundamentally, in terms of principles, that landlords won't want to be on board".

The Fair Tenancy Framework contains guidelines for transparency of rental data across all areas and types of commercial properties.

On the education front, it offers the industry templates of the terms typical rental contracts should contain.

The third plank of the framework entails the promotion of mediation as a preferred channel for resolving disputes between landlords and tenants.

Jannie Chan, president of the Singapore Retailers Association, said that as landlords, Reits are in a position of power, and tenants have often found themselves in a "take it or leave it" situation when negotiating or renegotiating rental contracts.

Suggesting that the framework be given more bite to provide a bigger platform for rental-dispute resolution, she also called for work to be done to deepen the industry's understanding of how Reits operate and interface with their retail tenants.

The RPWG is already looking to strengthen the mediation platform.

Cynthia Phua, who chairs the RPWG, said she is looking to work with the Singapore Mediation Centre to create a fast track for lease agreement and rent disputes.

"We can also create a panel of experts in this area so that you can do more with mediation, and it is faster and more efficient in terms of the settlement. So this is a start - one, to build up the process, and two, to build up the expertise."

R Dhinakaran, managing director of Jay Gee Melwani Group, agreed that the tenancy framework as a whole still had some gaps, but described the launch of the framework as a "first step".

Many more steps may be needed, but an overly complicated guide might discourage adoption by the industry, said Mr Dhinakaran, who is also vice-president of the Singapore Retailers Association. For now, there are no plans to back the framework with legislation.

Teo Ser Luck, Minister of State for Trade and Industry and advisor to the SMEC, said the government will keep tabs on the acceptance levels of the framework, and consider feedback from the business community.

"We have to see how this first step is rolled out, what acceptance levels are, how well or effective its been executed," he said.

"We are coordinating with various government agencies to consider using these guidelines in their tenancy practices and lease agreements. The feedback has been positive so far and they are supportive of the principles laid out in the framework."

This article was first published on January 21, 2015.
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