Singapore Commercial Required Disclosures: Landlord Rules

Singapore does not mandate lengthy environmental hazard reports (like flood zones or lead paint) for commercial properties in the way some Western jurisdictions do.

However, under the Lease Agreements for Retail Premises Act 2023, which commenced on 1 February 2024, and the associated Code of Conduct (CoC), specific disclosure and transparency requirements have been mandated for landlords leasing "Qualifying Retail Premises" (QRP) within shopping malls and commercial complexes.

Non-Retail Commercial Deals

Commercial leases in Singapore are governed by the principle of caveat emptor ('buyer beware'). Landlords are not generally required to disclose material facts unless they constitute latent defects that render the premises unsafe or unfit for use, or if non-disclosure amounts to fraudulent misrepresentation (Pek Nam Kee v Peh Phee Kiat [2012]). The burden of due diligence falls almost entirely on the incoming corporate tenant.

QRP / Retail Mandated Disclosures

For Qualifying Retail Premises (restaurants, spas, shops), the legislation requires the landlord to be highly transparent during lease negotiations to prevent anti-competitive practices by major mall operators.

1. Data Sharing and Confidentiality

A major sticking point in retail is "Base Rent + Gross Turnover (GTO)" rent calculating. Landlords demand deep insight into a tenant’s daily sales data to calculate their percentage cut.

Under Principle 12 of the CoC, while the landlord can demand this data, they are statutorily required to disclose and enforce a strict confidentiality regime.

• The landlord cannot share a specific tenant's sales data with other tenants.
• Sales data can only be shared with the landlord's employees and financiers on a strict "need-to-know" basis.

• Aggregated, anonymized data sharing is permitted (e.g., "Food and Beverage sales on Level 2 grew by 5%"), but the identities of the specific performing or underperforming tenants must remain guarded.

2. Exclusivity Clauses

Retail tenants often desire "exclusivity" (e.g., a coffee shop wanting a guarantee that no other coffee shop can open on the same floor).

Under Principle 1 of the CoC, exclusivity clauses are generally not allowed unless both parties agree. If an exclusivity clause is included in the lease, the landlord must explicitly disclose any prior existing tenancies that might violate that exclusivity before the lease is signed.

3. Preparation Costs and "Hidden Fees"

Prior to 2024, commercial landlords frequently embedded "lease preparation fees" into contracts, forcing the tenant to pay the landlord's corporate lawyers for drafting the standard mall lease.

Principle 2 of the CoC now mandates full transparency and requires that the Landlord and Tenant shall each bear their own legal and administrative costs for the preparation of the Lease Agreement. The landlord is strictly prohibited from passing their legal, administrative, or "lease drafting" expenses onto the retail tenant if using a standard compliant template.

4. Electricity and Third-Party Costs

If a landlord is not a licensed electricity retailer but bulk-purchases electricity and resells it to the retail tenant, the landlord must disclose their charges under Principle 11.2 of the CoC. The landlord must charge the Tenant on a pass-through basis at the same rate payable by the Landlord, plus a "reasonable administrative fee" if communicated upfront.

Ensuring your retail lease templates conform to these statutory transparency requirements is critical to avoid voided contracts and heavy fines in Singapore.

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