Revised retail leasing code of conduct to include data transparency as ‘leasing principle’
Paige Lim
AN UPCOMING version of Singapore’s code of conduct for retail space leasing will upgrade existing data-transparency guidelines to a “leasing principle”.
This means that when this version kicks in, data transparency will be one of the principles that landlords must follow, under a law currently making its way through Parliament.
This will be the third iteration of the code, the draft document of which is now on the website of the Fair Tenancy Industry Committee (FTIC), which is the custodian of the code. Data transparency and confidentiality clauses have so far been drawn up only as guidelines.
The code came into effect in June 2021, with the second and current version issued on Mar 15, 2022, in response to industry feedback. The current version contains 11 key leasing principles for fairer and more balanced lease negotiations.
The data transparency principle applies to landlords which collect sales data from tenants as part of the gross turnover rent formula. Such landlords “must share sales data metrics by trade category (that is, total monthly sales and total floor area) on a one-on-one basis before the signing of the lease agreement”.
Landlords must share such data twice a year with their existing tenants for the duration of their lease. This requirement is lifted only if there are fewer than three mall tenants in that trade category for confidentiality reasons.
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The second new leasing principle stipulates that confidentiality clauses in lease agreements must apply to both landlord and tenant. Such clauses are “intended to ensure the sanctity of information exchanged between landlord and tenant in respect of the lease of the premises in a reciprocal manner”.
New legislation intends to make it mandatory for landlords to comply with all leasing principles in the code. This is under the Lease Agreements for Retail Premises Bill, introduced in Parliament on Jul 4.
Tenant group Singapore Tenants United for Fairness had called on landlords to provide data on the footfall and average rental per square foot in their retail premises, following the Bill’s first reading.
The second and third readings of the Bill are expected to take place during the Parliament sitting in August. If passed, the legislation is expected to be implemented six months later.
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