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Common Commercial and Industrial Lease Terms for Private Owner Strata Units

Updated: Dec 11, 2021



WHAT ARE THE COMMON COMMERCIAL AND INDUSTRIAL LEASE TERMS AND FEES?



Rental

Tenant usually pays a fixed rate throughout the lease period. The total rent amount is inclusive of building maintenance fee and property tax which is borne by the landlord.


Security Deposit

Security deposit is usually one month's rental for every year of lease. Security deposit collected does not include GST as it is not considered a revenue.


Stamp Duty

Stamp duty is payable by the tenant based on IRAS prevailing stamp duty rates.


Length of lease

It is very common for leases to be around 2 to 3 years. However, for bigger organisation, they may sign longer leases up to 5 to 10 years. Most businesses will renovate the unit to suit their business needs. Thus, the length of lease will take into consideration the high cost of renovation and relocation cost for businesses.


Rent-free/ Fit Out Period

Rent free period can vary from 2 weeks to a few months , depending on the length of lease, the size of the unit and the extent of the renovation.


Goods & Services Tax (GST)

GST is payable based on the prevailing GST rate if the landlord is GST registered. This is not included in the gross rent. Tenant will be able to claim back their GST paid from IRAS if their company is GST registered as well.


Option to Renew

This clause will usually be stated in the Tenancy Agreement. However, do note that the renewal is typically negotiated based on the prevailing market rate, not based on current tenancy terms.


Reinstatement

All tenants will have to reinstate the unit back to the original condition upon the termination of the lease, unless otherwise agreed by the landlord and tenant. Tenant will be responsible to reinstate the unit during the term of lease and handover the unit back to the landlord at the stipulated lease end date in the contract.



A tenancy agreement is a private negotiation between the landlord and tenant. While there are market practices and guidelines, they are not definitive. Many a times, the extent of negotiation depends on market demand and supply and the current market condition.


It is never one party's gain, and another party's loss. We always strive for a fair and win win situation for all negotiations.





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