Whether you are setting up a business for the first time or you are a foreigner planning to set up a branch office or relocating your business to Singapore, as terms and conditions and leasing practices vary from country to country, we hope this Leasing Guide would help you to better understand the common practices in Singapore and assist you in the process of securing your Commercial space.
1. Planning and Ascertaining Your Requirements
Planning is essential when exploring office leasing options. It may be useful to prepare a checklist of your requirements before you embark on your office search, which may include:
- Size of office space – This depends on the number of employees in your organisation. Evaluate your long term and short term plans. You may want to allocate additional space for expansion.
- Lease Term
- Other requirements such as security, technical requirements, IT and communications infrastructure, etc
2. Reviewing Options
With the above checklist, you are ready for your office search. You can either liaise with the landlord directly or appoint an agent to assist you. Allow sufficient time to review and shortlist options.
Prior to signing the lease or if you are undecided as to which shortlisted office space works best for you, you may wish to engage a workspace designer to perform a ‘test-fit’ of your shortlisted option(s) to ensure the space you are leasing accommodates your needs. The ‘test-fit’ helps to work out the best efficient use of the space. The workspace designer can also work out the fit-out cost to enable you to compare the shortlisted options based on efficiency and financial aspect.
3. Signing the Lease
1) Letter of Intent (LOI)
The Letter of Intent is the first step towards any tenancy agree. The tenant will submit a LOI in writing, with their ACRA bizfile, to the landlord to initiate the negotiation process. The LOI will state the business needs of the tenant and any extras which the tenant will require from the landlord.
The Letter of Offer will be issued once all the principal terms of the rental agreement have been agreed upon by both parties. The LOO will also be given together with a draft tenancy agreement for the tenant to go through. In general, the tenant is given 7 to 10 days to sign the LOO and return it to the landlord with a non-refundable deposit. In most cases, the LOO is legally binding.
3) Tenancy Agreement (TA)
Upon signing of the LOO, a TA will be issued to the tenant. Tenants in general will have 2 to 3 weeks to sign this document. Tenants can also seek the advice of their lawyers familiar with local tenancy laws. Kindly note that most major landlords have their own TA drafted out and will not allow much changes done by tenants.
4) Handing/Taking Over
After the security deposit, advanced rental, stamp duty have been paid up, and all documentation signed, will the landlord allow the tenant to move in.