Air-Conditioning

Most office buildings is equipped with a centralised air-conditioning system where air-conditioning is provided for typically during office hours as follows;

Monday to Friday: 8am to 6pm

Saturday: 8am to 1pm

If a tenant requires after office hours air-conditioning, it will be subject to a extension hours charge with varies from building to building in the range of $40 to $80 per hour.

Alternatively, for a cost effective solution, tenant can check with the landlord on the possibility of installing split air-conditioning system where a space is allocated for the condenser units.

Another commonly requested solution is to purchase chilled (condensing) water from the landlord and tapping on to the building’s centralised air-conditioning system. This solution is extremely favourable for tenants who require long extended working hours.

All solutions proposed will be subjected to the landlord’s and management’s approval.

Carparking

The typical allocation in CBD varies, for some buildings built earlier, allocation is approx. 2,000 sq ft to 1 lot. Newer buildings allocation is approx. 4,000 sq ft to 1 lot, in tandem with the URA guidelines. Tenants can request for more carpark lots subjected to availability.

For parking costs it ranges from $250 to as high as $400 per month per lot in the CBD.

For office buildings outside the CBD, the allocation of lots can range from 1,000 sq ft to 1 lot, at a parking cost of $100 per month onwards.

Fitting Out Period (Rent Free)

Fitting out period is provided by the landlord to the tenant free of rent for the purpose of renovation. The typical rent-free period is one month.

For larger units, the fitting period of 2 to 3 months can be negotiated, and often possible.

*The fitting period does not form part of the lease tenure.

Insurance

Insurance is always a common way to hedge against risk of uncertain loss or contingent. Therefore landlord commonly ask for 2 types of policies, namely public liability insurance as well as fire insurance. Public liability insurance is commonly requested in joint names with the landlord.

Legal Fees and Stamp Duty

The tenant is responsible for the legal fees incurred in connection with the preparation for the lease or tenancy agreement. The legal fees varies for different landlord. Do check with the landlord on the estimated legal fees.

Stamp Duty is compulsory as required by the Law for every lease and tenancy agreement. This cost is paid by the tenant. To check on how much stamp duty is payable please refer to the formula below or visit www.iras.gov.sg.

Average Annual Rent (AAR)1 Lease Duty Rates
AAR does not exceed $1,000  Exempted
AAR exceeds $1,000
Lease period of 4 years or less 0.4% of total rent for the period of the lease
Lease period of more than 4 years or for any indefinite term 0.4% of 4 times the AAR for the period of the lease

Option to Renew

In the preparation of lease or tenancy agreement, an option to renew will be indicated if requested for a further term of 1 to 3 years as standard. There are certain variations to this term, to be renewed at “prevailing market rent” or “at a mutually agreed rent”. The latter has no provision to determine what is a fair rate in any case of dispute.

Property Tax

The landlord’s responsibility as part of the lease or tenancy agreement is to pay the property tax which is assessed at 10% of the annual value.

Do note that in the agreement it is common for the landlord to include a provision to recover any increase in property tax which is charge by IRAS during the lease term.

Reinstatement

It is required by the existing tenant of the premise to reinstate into a bare or original state that they took possession of premise with fair wear and tear excepted. In certain situations where a potential prospect is keen in your existing renovations, it is possible for the landlord to put forth a request to you by not re-instating and to leave it on a as-it-is condition. The reinstatement liability will hence be transferred over to the next tenant.

The reinstatement period taken for such works may take up to 2 weeks at the cost of between $8 to $12 PSF.

Renovation Deposit

Renovation Deposit is often required by the landlord or management of the building before any commencement of any renovation works. This deposit will be refunded upon completion of the renovations works and inspection, subject to deductions if any cost is incurred to rectify any damages caused by the tenant’s contractor.

Rent

Rent or Gross Rent is commonly used in lease or tenancy agreement. The Gross Rent is commonly being broken down into 2 components being the base rent and serviced charge. A 7% Goods and Services Tax (GST) will be levied on top of the Gross Rent.

Rent payments is required to be paid in advance.

Security Deposit

Security deposit of a 3 months is the minimum by major landlords whether it is a 2 or 3 years lease. The amount of security deposit is very dependant of the tenant’s paid up capital. In cases where the tenant’s paid up capital fall short of the landlord’s requirement, the landlord will request for an increase of security deposit to 6 months or more.

It is possible for security deposit to be in the form of Banker’s Guarantee.

Service Charges (Maintenance Fee)

Service charge covers the general upkeep of the common areas and air-conditioning provided by the landlord. The cost of service charge is between $0.80 to $1.20 PSF. This charge will be reflected in the lease or tenancy agreement which forms part of the gross rent.
Do note that service charge may change during the lease term.

Sub-Letting

In typical lease or tenancy agreements, sub-letting is not allowed. In a situation where the tenant wants to put forth such a request during the lease term, they can write in to the landlord to ask for approval.

Alternatively, a tenant who decides not to carry on with the lease or tenancy, the landlord will usually ask the tenant to look for a replacement to take over the balance lease term or a fresh lease to be signed with the landlord.

Utilities & Telecommunication

Utilities and telecommunication costs are borne by the tenant. They have to liaise with the various service provider to start up an account and a deposit is expected to be paid.