International Business & Economy Parliament should consider lease renewal law to protect consumers interests

Parliament should consider lease renewal law to protect consumers interests

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By: Tan Kin Lian
The food court in Thomson Plaza was operated by Kopitiam for many years. One day, I saw different stalls. A new operator, Koufu, had taken over.
The convenience store at Yio Chu Kang MRT station was operated by Cheers for many years. A new operator, 7-eleven, took over.
Did the consumers benefit from the change of operators? Did they get a better selection of food or daily necessities? Did you enjoy lower prices? No! They probably end up paying more.
The original tenants did not give up the outlets because they failed in their business. They continue to do well and opened more outlets at other locations. They gave up the existing outlets because a new operator submitted a higher bid for the lease of their premises.
The new operators had to spend a considerable sum of money to renovate the outlets. The higher rental and renovation costs must be recovered through higher prices charged to the consumers.
This type of change of operators had been happening all over the place for many year. This is how the cost of living continues to escalate in the most expensive city in the world. This bad practice has to stop. How can it be done?
We need our parliament to pass a law regarding renewal of leases. The existing tenants must be given the option to renew the lease at the existing rental plus an adjustment for inflation. A further adjustment may be allowed if the existing rental is more than 10% below the market – which can be determined by market data available from the tax authority.
This law will be fair to both tenants and landlords. It will stop the wasteful practice that is prevalent in Singapore. It might help to moderate the cost of doing business and the prices charged to consumers.

Republushed from Mr Tan’s FB.

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