TRW & Co · Real estate and projects
Retail Lease Disputes in Singapore: The Code of Conduct for Leasing
The retail leasing code of conduct in Singapore has been mandatory since 1 February 2024 for retail leases and licences of one year or more. It bans "whichever is higher" rent formulas, caps deposits for smaller units and restricts one-sided clauses, unless both sides agree and the landlord declares the deviation. Non-compliance goes to mediation, then adjudication.
Key pointAn undeclared permitted deviation is void under the Act, except for rental formula deviations, so a landlord that misses the 14-day FTIC filing can lose an agreed higher deposit or exclusivity clause without any dispute being fought on the merits.
At a glance
Mandatory since February 2024
The Lease Agreements for Retail Premises Act 2023 made the Code binding for qualifying leases signed on or after 1 February 2024.
One-year threshold
Qualifying leases include licences and sub-leases of retail premises for a term of one year or more, disregarding renewal options.
Single rent computation
Rent must use one formula for the term; "either/or, whichever is higher" and threshold turnover formulas need agreement and a declaration.
Deposit cap for small units
For premises up to 5,000 sq ft on terms up to three years, deposits are capped at three months' gross rent unless a deviation is declared.
Mediation then adjudication
Complaints go to the Singapore Mediation Centre; an adjudicator can vary the lease or order compensation if mediation fails.
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The short answer: is the retail leasing code of conduct in Singapore binding?
Yes. The retail leasing code of conduct in Singapore, formally the Code of Conduct for Leasing of Retail Premises, has been mandatory for qualifying leases since 1 February 2024, when the Lease Agreements for Retail Premises Act 2023 took effect. Landlords and tenants must ensure that a qualifying lease complies with the leasing principles in force when it is signed.
The Code covers leases and licences of retail premises for a term of one year or more, signed or renewed on or after that date. It restricts clauses that tenants long complained about, such as "whichever is higher" rent formulas, uncapped security deposits, sales performance penalties and open-ended cost recovery. Some restrictions can be relaxed by mutual agreement, but only through a formal declaration to the Fair Tenancy Industry Committee (FTIC) within 14 days of signing.
If a signed lease does not comply, either party can file a complaint that goes to mediation and, if needed, adjudication, where the lease can be varied or compensation ordered. This guide explains how that works in practice. For the wider leasing landscape, see our practice page on commercial leasing in Singapore.
How the Code became law
The Code was developed by industry after the pandemic exposed imbalances in retail lease terms. It was introduced by the Singapore Business Federation in March 2021 as a voluntary code, and the FTIC was set up on 3 May 2021 as its custodian, with landlord, tenant and neutral representatives. A revised version took effect on 1 June 2022.
Parliament then gave the Code legal force. The Lease Agreements for Retail Premises Bill was tabled on 4 July 2023 and passed on 3 August 2023, and the Act came into force on 1 February 2024, together with Version 3 of the Code. The Singapore Business Federation and the FTIC publish the current Code and guidance.
| Date | Development | Effect |
|---|---|---|
| March 2021 | Code introduced by the Singapore Business Federation | Voluntary industry standard |
| 3 May 2021 | Fair Tenancy Industry Committee formed | Custodian of the Code |
| 1 June 2022 | Revised Code takes effect | Updated principles, still voluntary |
| 3 August 2023 | Lease Agreements for Retail Premises Bill passed | Statutory backing for the Code |
| 1 February 2024 | Act and Code Version 3 in force | Mandatory for qualifying leases signed on or after this date |
Which leases are covered
A qualifying lease is a lease of retail premises, or an extension or renewal of one, where the agreement is signed on or after 1 February 2024 and the term is one year or more. Renewal options are disregarded when measuring the term. "Lease" includes a licence, sub-lease and sub-licence, so short-form licence agreements for kiosks and push carts can be caught if they meet the term threshold.
Premises are retail premises if used primarily for selling goods by retail or supplying services. The Code's examples include restaurants, cafes, bars, supermarkets, boutiques, salons, clinics, pet shops, tuition centres, childcare centres, walk-in bank branches and gyms. Premises used mainly for administrative work connected with services are excluded.
Location does not matter. The retail leasing code of conduct in Singapore applies in shopping centres, office buildings, industrial and business parks, mixed-use developments, shophouses, hotels, hospitals, schools, transport nodes and airports. According to commentary on the Bill, the Act also applies whether or not the lease is governed by Singapore law.
The key leasing principles in brief
The Code (Version 3) contains 11 leasing principles on key tenancy terms and two on confidentiality and data transparency. The ones that most often change commercial outcomes are these.
| Principle | General rule | Deviation allowed? |
|---|---|---|
| Rental formula | A single rental computation for the whole term; no "either/or, whichever is higher" formula and no GTO component above a specified amount | Yes, by mutual agreement with a declaration to the FTIC |
| Security deposit | Capped at three months' gross rent for premises up to 5,000 sq ft on terms up to three years | Yes, by mutual agreement with a declaration |
| Sales performance | No clause penalising a tenant for missing sales targets | Yes, by mutual agreement with a declaration |
| Exclusivity | No radius clause restricting the tenant from opening nearby, and no clause barring the landlord from leasing to similar trades | Yes, by mutual agreement with a declaration |
| Tenant pre-termination | Tenant may end the lease if its brand principal becomes insolvent or it loses distribution rights through no fault of its own | Mandatory content set by the Code |
| Landlord redevelopment | Pre-termination only for substantial works, on at least six months' notice, with compensation for the tenant's capital works | Mandatory content set by the Code |
| Service and A&P charges | May be adjusted only if overall gross rent does not increase | Mandatory content set by the Code |
| Data transparency | Landlords collecting sales data for GTO rent must share sales metrics by trade category twice a year | Mandatory content set by the Code |
What the Code says about gross turnover rent
The Code does not set a percentage cap on turnover rent. Instead, it controls how turnover rent is structured. A base rent plus a percentage of gross turnover is compliant, as is a pure percentage of turnover. Formulas that charge the higher of a fixed rent and a turnover rent, or that add a turnover component only once sales pass a threshold, are non-compliant unless both parties agree and the landlord declares the deviation.
Where a landlord collects sales data to compute turnover rent, it must also share aggregate sales data with tenants, before signing and twice a year during the lease, unless the trade category has fewer than three tenants. For tenants, this is an underused tool in rent review negotiations.
Deposits and guarantees
For smaller premises on shorter terms, the security deposit should not exceed three months' gross rent. The cap does not apply where three months' gross rent is S$500 or less, or where the premises exceed 5,000 sq ft or the term exceeds three years. Tenants can, by notifying the landlord upfront, provide up to half of the deposit in a non-cash form such as a bank guarantee. A cover-all clause making directors or shareholders personally liable must not be included, although a tenant may offer a personal guarantee in lieu of a deposit.
Permitted deviations and the 14-day declaration
Several principles in the retail leasing code of conduct in Singapore allow a deviation if both parties genuinely agree. Agreement must be real: the Code gives the example of a landlord unreasonably demanding that a tenant accept a so-called mutually agreed deviation, which either side may report to the FTIC. The landlord must flag deviations in a checklist provided with the first draft of the lease, and must file a declaration of permitted deviation with the FTIC within 14 days after the lease is signed. The FTIC has charged a filing fee of S$100 plus GST per deviation since 1 February 2024, which the Code says is shared equally.
The consequences of not filing are significant. Under the Act, an undeclared permitted deviation is void, except where it relates to the rental formula. For the security deposit, the Code provides that the deposit is then deemed to be three months' gross rent. For an undeclared rental formula deviation, the FTIC may publish details of the non-compliance.
Landlords should treat the 14-day declaration as a closing deliverable, not an afterthought. A missed filing can quietly void an agreed exclusivity clause, sales performance clause or higher deposit. Tenants should ask for a copy of the filed declaration as part of completing the lease.
How disputes under the retail leasing code of conduct in Singapore are resolved
The Act creates a dedicated dispute process. A landlord or tenant files a complaint of non-compliance with the authorised dispute resolution body, which the FTIC identifies as the Singapore Mediation Centre. The FTIC's guidance states that a complaint should be made within 14 days after signing the lease, or after the date of the alleged non-compliance.
- Identify the non-compliance. Compare the signed lease and checklist against the Code version in force when it was signed, and note any deviation that was not agreed or not declared.
- Raise it promptly. File the complaint with the Singapore Mediation Centre within the period in its rules, using the required form and fee, and notify the other party as the rules require.
- Attend mediation. A mediator from the centre's panel is appointed to help the parties settle, including by agreeing a variation of the lease.
- Proceed to adjudication if needed. If mediation fails, the complainant may apply for an adjudicator, who can vary the lease to correct the non-compliance or order compensation.
- Enforce the outcome. Settlement agreements and adjudicators' determinations can be enforced in the same way as a court order, subject to the conditions in the Act.
Problems during negotiations, before signing, are handled differently: either side can inform the FTIC, which monitors repeated reports. Disputes about matters the Code does not cover, such as ordinary rent arrears or fit-out defects, still go through the usual channels described in our real estate disputes practice. Our page on mediation and settlement strategy explains how to prepare for a mediation so that it produces a durable outcome.
Illustrative scenario: an F&B tenant and a "whichever is higher" clause
This scenario is illustrative only and does not involve any real landlord or tenant.
A cafe operator signs a three-year lease of a 1,200 sq ft unit in a suburban mall. The rent is stated as a fixed monthly sum or a percentage of gross turnover, whichever is higher, and the deposit is six months' gross rent. The checklist marks both terms as deviations, but no declaration is filed with the FTIC.
Because the deposit deviation was not declared, it is void and the deposit is deemed to be three months' gross rent. The rental formula is different: an undeclared rental formula deviation is not automatically void, so the tenant files a complaint and the matter goes to mediation. The parties agree a compliant base-plus-turnover formula with a modest step-up, and the landlord refunds the excess deposit.
The scenario shows why the retail leasing code of conduct in Singapore rewards careful paperwork on both sides. The tenant's leverage came almost entirely from a missed administrative step.
Risks and common mistakes
Assuming licences and short-form agreements are outside the Code
The Code defines a lease to include licences, sub-leases and sub-licences. A kiosk licence or a concession agreement for a term of a year or more can be a qualifying lease if the premises are retail premises.
Landlords should review every template used for retail occupiers, not only the main lease, and tenants should check the term and use before assuming the Code does not apply.
Using pre-2024 templates for renewals
A renewal or extension signed on or after 1 February 2024 is itself a qualifying lease if it runs for a year or more. Rolling forward an older lease by side letter can import clauses the Code now prohibits.
Renewals should be checked against the Code version in force at signing, with a fresh checklist and, where needed, fresh declarations of any agreed deviations.
Missing the 14-day window
The declaration deadline and the guidance on complaint timing both run from signing. Lease execution often happens in stages, and parties lose track of which date counts.
Agree a single execution date, diarise 14 days from it, and assign responsibility for the filing to a named person on the landlord side.
Ignoring the tenant pre-termination principle
Tenants operating under franchise or distribution agreements may terminate early if the brand principal becomes insolvent or the tenant loses its rights through no fault of its own, on the notice and compensation terms the Code sets. Our franchising page explains how this interacts with franchise agreements.
Landlords should not try to contract out of this principle. Tenants should keep evidence of the principal's insolvency or the loss of rights, as the right depends on those facts.
Cross-border brands and regional landlords
International brands are often surprised by how far the retail leasing code of conduct in Singapore reaches. They frequently negotiate leases centrally, using group templates and foreign governing law. The Code still applies to qualifying leases of Singapore retail premises, and the checklist and declaration requirements are local formalities that regional teams can overlook.
Brands expanding through local partners should align their distribution and agency agreements with the Code's pre-termination principle. TRW & Co works with retailers and landlords across Bangladesh, the UK, the UAE and China on regional leasing programmes. Where Singapore court or tribunal representation is required, we work alongside Singapore-qualified counsel.
Checklist for landlords and tenants
- Confirm whether the premises are retail premises and the term is one year or more.
- Use the Code version in force on the signing date.
- Provide or obtain the completed checklist with the first draft of the lease.
- Mark every deviation and confirm it is genuinely agreed.
- File declarations of permitted deviation with the FTIC within 14 days of signing.
- Check deposit size, rental formula and guarantee clauses against the Code.
- Raise any non-compliance promptly through the Singapore Mediation Centre route.
- Keep the Act, the Code and the dispute rules on file for each lease.
The retail leasing code of conduct in Singapore has changed the bargaining baseline for retail leases. If you are negotiating a new retail lease, renewing one, or facing a dispute over its terms, contact TRW & Co for advice on compliance and your options.
Frequently asked questions
01Does the Code of Conduct for Leasing of Retail Premises apply to my lease?
It applies if the premises are used primarily for retail sale of goods or supply of services, the agreement was signed on or after 1 February 2024, and the term is one year or more, ignoring renewal options. Licences, sub-leases and renewals are included. Premises used mainly for administrative work are excluded. Location is irrelevant: malls, office buildings, shophouses, hotels and airports are all covered. If your lease was signed earlier, earlier voluntary versions may still be relevant to negotiations.
02Can a landlord still charge gross turnover rent?
Yes. The Code does not cap the turnover percentage. Base rent plus a percentage of gross turnover, or a pure turnover rent, is compliant. What the Code restricts is structure: formulas charging the higher of fixed rent and turnover rent, or adding a turnover component only above a sales threshold, are non-compliant unless both parties agree and the landlord files a declaration of permitted deviation with the FTIC within 14 days of signing. Landlords using sales data must also share aggregate data.
03What is the maximum security deposit for a retail lease in Singapore?
For qualifying leases of premises up to 5,000 sq ft with a term of up to three years, the Code caps the security deposit at three months' gross rent. The parties may agree a different amount, but the landlord must declare the deviation to the FTIC within 14 days, failing which the deposit is deemed to be three months' gross rent. The cap does not apply to larger premises, longer terms, or where three months' gross rent is S$500 or less.
04What happens if the landlord does not file a declaration of deviation?
Under the Act, an undeclared permitted deviation is void, except where it concerns the rental formula. The Code also sets specific consequences, for example deeming the security deposit to be three months' gross rent. For an undeclared rental formula deviation, the FTIC may publish details of the non-compliance. Tenants can also raise the issue through the dispute process. Landlords should therefore treat the filing as an essential completion step.
05How do I complain that my retail lease breaches the Code?
File a complaint of non-compliance with the Singapore Mediation Centre, which the FTIC identifies as the appointed dispute resolution body. FTIC guidance indicates the complaint should be made within 14 days of signing or of the alleged non-compliance. A mediator is appointed first. If mediation fails, an adjudicator can be appointed and may vary the lease or order compensation. Outcomes can be enforced like a court order, subject to the Act's conditions.
06Can a tenant end a retail lease early under the Code?
Only in the exceptional cases the Code sets out: where the brand principal whose goods or services the tenant sells becomes insolvent, or where the tenant loses its distribution or franchise rights through no breach of its own. The tenant must give six months' notice or pay gross rent in lieu, and pay compensation equal to the security deposit. Instead of terminating, the tenant may ask to assign the lease to a replacement tenant, subject to the landlord's reasonable approval.
Sources and official materials
- Lease Agreements for Retail Premises Act 2023 — Statutory basis for mandatory compliance and dispute resolution
- Code of Conduct for Leasing of Retail Premises (Version 3) — Full text of the leasing principles, checklist and dispute framework
- FTIC: Code of Conduct — Current Code, joint declarations and guidance
- FTIC: About Dispute Resolution — Escalation to the Singapore Mediation Centre and process
- Singapore Business Federation: Fair Tenancy Industry Committee — Background to the Code, FTIC and legislation timeline
- Lease Agreements for Retail Premises Bill (Bill 25 of 2023) — Bill text on complaints, mediation and adjudication
General information only, current as at 20 October 2026. It is not legal advice and does not create a lawyer–client relationship. Singapore law and regulatory practice change; check current official sources and take advice on the facts of your matter.
