Moving to a New Office: A Legal Checklist for Singapore Businesses
The relocation of businesses are part and parcel of the business climate in Singapore. Many of the reasons for doing so, as cited by business owners, include higher rental costs and/or inaccessibility of existing premises.
To aid business owners in the transition process, this article provides a checklist of the legal steps that should be taken when you plan to relocate.
1. Finding a New Place: Reviewing the New Tenancy Agreement
If these clauses are absent from the new tenancy agreement, you should try to negotiate with your new landlord to have them included.
(a) Maintenance or Minor Repair Clause
A maintenance or minor repair clause would insulate you from having to pay for any maintenance or minor repair works arising out of damage caused by wear and tear.
For instance, the premises might contain several defects such as a broken wall socket, toilet leaks and/or bad plumbing. This is likely to occur if the premise is relatively old.
(b) Extension of Lease
You should ensure that the tenancy agreement provides you with the possible option of negotiating for an extension of the tenancy after the expiration of the original tenancy period.
This is important as you do not want to be sourcing for a new location if the current premise already meets your expectations.
(c) Rental Amount
You should try to ensure that the amount of rental stated in the new tenancy agreement is inclusive of all payable fees. This is because your new landlord may try to add on additional hidden fees, such as insurance/tax which might increase the monthly rent payment significantly.
Alternatively if the rent payment does not include such other fees, then these fees should be expressly mentioned in the agreement.
(d) Reinstatement Clause
A reinstatement clause states that the tenant is required to reinstate the premise to its original condition at the end of the tenancy, notwithstanding how you might wish to change the layout of the new office.
If this clause is present in your agreement, it would be a good idea to take photos of the premises and make a note of the furnishings that came with the premises before you move in proper. This way, you will know what you will need to do or remove in order to reinstate the premises to its original condition at the end of your tenancy.
(e) Necessary Submission of Documents
Before you can execute the tenancy agreement on your business’ behalf, your new landlord may require you to produce a certified true copy of your Business Registration certificate with Accounting and Corporate Regulatory Authority (ACRA), company constitution, and board minutes.
If so, be sure to deliver such documents to your new landlord promptly to prevent delay in the execution of the tenancy agreement.
(f) Diplomatic Clause (For Foreign Business Owners)
If you are a foreign business owner residing in Singapore, you should pay attention to whether there is a diplomatic clause in the agreement. If there isn’t, you should try to get one inserted.
A diplomatic clause allows you to terminate your tenancy agreement early without paying a penalty.
This clause will protect you in situations where you have to leave Singapore earlier than expected.
2. Ending the Current Lease: Reviewing the Existing Agreement
Before ending your current tenancy agreement, you have to bear in mind your obligations under it. Important clauses that you should be paying particular attention to would include clauses relating to the refund or forfeiture of your security deposit.
In order to get a refund of your security deposit, you will have to ensure that you do not fall foul of any terms of the existing tenancy agreement that will allow for the forfeiture of your security deposit.
For example, your security deposit may be forfeited if:
- You caused physical damage to the premises
- You terminated the tenancy agreement early
3. Termination or Transfer of Any Relevant Service Contracts
(a) Communications Services
You may wish to transfer your service contracts for services such as your telephone line(s) and Wi-Fi network from your old premises to the new one. Alternatively, you may want to terminate the existing services and recontract for the services at your new premises.
Telecommunication companies tend to impose a Minimum Subscription Period for service contracts. For example, in the case of Singtel, the Minimum Subscription Period is 3 months.
You should therefore check your service contracts to see what they say about terminating your services without incurring any premature termination charges.
Charges may also be incurred for transfering your service subscriptions to your new premises, such as for the removal and relocation of the telephone lines and Wi-Fi hardware. Again, check your service contract for the exact charges.
(b) Public Utilities
For public utilities, you should apply to Singapore Powers and the Public Utilities Board to have the electrical and water supplies at your existing premises terminated.
You can subsequently apply for the provision of electrical and water supply by these agencies to your new premises. There is no need to open a new utilities account as your existing account can be used to apply for electrical and water supplies to your new premises.
4. Registering the Change of Company Address with ACRA
If your business is a company, you will need to register the change of your office address with ACRA within 14 days from the date of the change.
You can do so by filing a “Change in Company Information” transaction on the BizFile+ website using your company’s CorpPass account detailing your new office address and operating hours (if you will be changing your operating hours as well).
As seen from this article, there are many legal aspects to be addressed when you plan to move your business to a new office. Knowing your rights and obligations under your existing and new tenancy agreements is a big part of this.
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