COMMERICAL LEASES

Managing leasing agreements


Early termination

Measures that allow small businesses and individuals to renegotiate leases and licenses of non-residential immovable property

Whilst a tenant is usually provided with the right to terminate the lease in very limited circumstances, the landlord will often provide for a right to terminate and re-enter the demised premises upon the tenant breaching a condition or a covenant and failing to remedy such breach within a stipulated notice period.

Many leases also include sale and redevelopment clauses which give the landlord a right to terminate the lease, if the building is to be sold by way of a collective sale. Typically, the landlord has to give at least three months' notice in writing to the tenant. The lease will terminate upon the expiry of that notice.

Emergency temporary laws have been progressively introduced in Singapore during the COVID-19 pandemic which, at the time of going to press, is still evolving. These include the rental relief framework for affected small and medium enterprises, as well as measures that allow small businesses and individuals to renegotiate leases and licenses of non-residential immovable property (with a term of 5 years or less) under the government's "Re-Align Framework". Please refer to our other publications on specific COVID-19 emergency laws and temporary measures for further information.

Current stamp duty payable will be 0.2% of the higher of the purchase price

Termination by third party

Occasionally, lands may be required by the Government for public projects and infrastructure developments. The Government has the right under the Land Acquisition Act (Cap. 152) to compulsorily acquire such lands as needed and make the necessary compensation to the affected landowners, typically at market value.

Transfer of lease

The landlord does not usually allow the tenant to do any of the following:

  • Assign or sublet the lease;
  • Part with or share possession of the demised premises with others, including with companies in the same group; and
  • Change control of the tenant.

A breach of any of the above will often give the landlord a right of re-entry and the ability to terminate the lease. It is possible to negotiate carve-outs to these provisions.

If you have any questions or comments about this report, please get in touch.

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LEGAL AND REGULATORY