SINGAPORE Law and Practice Contributed by: Benjamin Tay, Chou Ching, Norman Ho, Vikna Rajah, Chun Kiat and Marcus Tay, Rajah & Tann Asia
depending on policy wording and exclusions, and pandemic-specific relief measures have fully expired. 6.13 Restrictions on the Use of Real Estate Leases ordinarily restrict use to permitted purposes specified in the lease. Use outside the permitted scope requires landlord consent and must also com - ply with planning approvals under the Planning Act. For industrial premises held under JTC leases, addi - tional use restrictions apply and are actively enforced. 6.14 Tenant’s Ability to Alter and Improve Real Estate Tenants may carry out non-structural alterations with landlord consent, which is typically not unreasonably withheld. Structural works and alterations affecting building services usually require express consent and regulatory approvals. Tenants are commonly required to reinstate premises at lease expiry, and reinstatement obligations can rep - resent a material cost consideration. 6.15 Specific Regulations Certain asset classes are subject to additional regula - tory requirements. Industrial premises are regulated through JTC lease conditions, retail premises are sub - ject to licensing regimes for specific trades, and hotels require licensing under sector-specific legislation. 6.16 Effect of the Tenant’s Insolvency Upon a tenant’s insolvency, statutory moratoriums may restrict a landlord’s ability to enforce lease rem - edies without court approval. Insolvency practitioners may disclaim onerous leases, terminating future obli - gations while preserving the landlord’s right-to-prove for losses. Security deposits and guarantees therefore play a critical role in mitigating insolvency risk, and their structuring is an important diligence consideration for landlords. 6.17 Right to Occupy After Termination or Expiry of a Lease Commercial tenants in Singapore do not enjoy statu - tory security of tenure. Upon lease expiry or termina -
tion, the tenant has no right to remain in occupation unless a new lease is agreed. Landlords may recover possession through contrac - tual or court-ordered processes where tenants fail to vacate. 6.18 Right to Assign a Leasehold Interest Assignment and subletting are typically prohibited without landlord consent, subject to negotiated exceptions. Assignments to affiliated entities are often permitted on simplified terms. For industrial premises, JTC approval may also be required for assignments or substantial subletting. 6.19 Right to Terminate a Lease Landlords are entitled to terminate a commercial lease by forfeiture where the tenant has breached a material lease condition – typically non-payment of rent or a breach of a user covenant – and has failed to rem - edy the breach within the notice period prescribed by the lease. The right of re-entry must be exercised in accordance with the lease terms and applicable law. Tenants may apply to the court for relief from forfei - ture. Tenants’ rights to terminate before expiry are limited to those expressly provided in the lease – typically a break clause exercisable at a specified date upon giving a minimum period of notice. The conditions for valid exercise of a break clause are strictly construed by the Singapore courts, and tenants must ensure full compliance with all the con - ditions precedent to the exercise. Where forfeiture is sought for a breach of covenant other than non- payment of rent, the law imposes an additional pro - cedural requirement before the landlord may re-enter: the landlord must first serve a notice under Section 18 of the Conveyancing and Law of Property Act speci - fying the breach, requiring it to be remedied within a reasonable time and, if capable of quantification, requiring the payment of compensation. Failure to serve a valid Section 18 notice before exercising the right of re-entry will render the forfeiture wrongful, and practitioners acting for landlords must ensure strict
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