HDB EXTENDS GRACE PERIOD FOR LONG-TIME TENANTS

The Housing and Development Board (HDB) has extended the grace period for long-time commercial and industrial tenants to allow them to adjust to a rule that prohibits them to transfer their business space.

The Housing and Development Board (HDB) has extended the grace period for long-time commercial and industrial tenants to allow them to adjust to a rule that prohibits them to transfer their business space.

In a blog post, National Development Minister Khaw Boon Wan said the HDB will double the grace period from three years to six years for existing commercial and industrial tenants who have already been tenants for at least 15 years as of 16 October 2013.

The policy tweak was made after HDB met up with various groups of tenants, said Khaw.

Mr Khaw said: "Some tenants who have been operating out of the same premises for many years, asked HDB for a longer grace period, to give them more time to make business adjustments. A significant proportion of them will in fact be retiring in a few years' time, or would be near retirement then."

Around 7,100 long-time tenants, or 40 percent of HDB commercial and industrial tenants, will benefit from the special concession. Of which, 77 percent are aged 55 years and above.

"I hope the extended grace period would better help them make the necessary business adjustments to dovetail with their retirement plans. This concession is a good way to recognise their many years of serving the local community," he added.

Notably, the HDB has stopped the practice of transferring tenancies among HDB commercial and industrial tenants since October last year. However, it provided existing tenants a three-year grace period within which to make business adjustments.

While the old policy allowed the exit of tenants whose businesses were not doing well, it also led to high rental bids by businesses, in the hope of reaping high assignment fees.

"Such high rents and assignment fees translate directly to higher operating costs which must eventually be passed on to consumers," he said.

Mr Khaw noted that the new HDB rule has been effective as it saw average assignment fees for HDB commercial and industrial properties drop by around 33 percent and 42 percent respectively.

Image source: HDB


Nikki De Guzman, Junior Journalist at PropertyGuru, edited this story. To contact her about this and other stories, email nikki@propertyguru.com.sg

Source: PropertyGuru.com.sg

Date Post: 5/5/2014
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