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  • SBF and SMC sign Memorandum of Understanding to promote mediation for tenancy disputes

SBF and SMC sign Memorandum of Understanding to promote mediation for tenancy disputes

  • Singapore Mediation Centre (SMC) to expedite mediation requests to resolve tenancy disputes between landlords and tenants of business premises
  • SMC will offer preferential mediation rates to tenancy dispute cases related to the Fair Tenancy Framework (FTF)
  • Singapore Business Federation (SBF) and SMC to enhance outreach efforts to tenants and landlords in promoting mediation as an effective dispute resolution method

[12 October 2015] Singapore – SBF and SMC signed a memorandum of understanding (MOU) today to promote mediation as the preferred dispute resolution channel for commercial tenancy disputes under the FTF. The MOU was signed by Mr Ho Meng Kit, CEO of SBF, and Mr Loong Seng Onn, Executive Director of SMC.

Mediation under the FTF
Launched in January this year, the FTF was developed on the principle of fairness for all contracting parties. The Framework aims to achieve the following results through a three-pronged approach which includes greater rental data transparency, improving education and awareness, as well as identifying a preferred dispute resolution channel. The approach includes:
  • helping tenants and landlords of business premises to understand key terms and conditions of a lease agreement
  • educating tenants and landlords of their respective roles and responsibilities
  • highlighting the implications of prevalent industry lease clauses
Under the third initiative of the FTF, mediation is recognised as a cost-effective and efficient means to resolve contractual disputes between tenants and landlords of commercial premises, given the long-drawn and costly alternative of litigation.

This is evident in the total number of cases mediated at SMC increasing dramatically over the years. The cases have – more than doubled now when compared to the end of 2009. Out of 102 tenancy matters mediated at SMC, about 75% were settled. In one SMC tenancy dispute, the matter, which would have taken about two years to reach the court, was scheduled for mediation within 15 working days after submission of the request. The case was settled through mediation at SMC within one day.

Memorandum of Understanding
The main features of the MOU are:
  1. SBF and SMC will jointly promote the use of mediation as a method for resolving tenancy disputes
  2. SMC will provide mediation services which cater to the requirements of tenants and landlords in line with the Fair Tenancy Framework
  3. SBF and SMC will jointly develop training programmes, seminars and workshops to cater to the intent of the FTF
To facilitate the adoption of mediation for tenancy disputes, SMC will introduce a fast-track to expedite the process of mediation from the point of referral. SMC will also offer preferential mediation rates for tenancy-related cases which arise from, or are related to the FTF (see Annex A for details).

Going forward, SBF and SMC will enhance outreach efforts through the development of joint training programmes, seminars and workshops relating to FTF.

Mr Ho Meng Kit, CEO of SBF, said “As restructuring continues, the perennial issues plaguing businesses are not new, with rentals being one of them. In relation to tenancy, tenants and landlords do not stand on opposing sides. Instead, there are common interests which allow both parties to work together to strengthen not only individual bottom-lines, but their respective industries as a whole.

This MOU is one example of the work SBF has embarked to help the business community better cope with the challenges such as those involving rental costs and the fairness of the tenancy terms. We will continue to enhance engagement and collaboration with partners and stakeholders to help businesses tide through this restructuring phase.”

Mr Loong Seng Onn, Executive Director of SMC, said, “We are heartened that SBF is advocating mediation as an option for both landlords and tenants to resolve tenancy disputes, and that SMC is chosen as the preferred dispute resolution channel. Businesses caught in tenancy disputes will have to otherwise contend with high legal costs and invest valuable time and resources which could be better channelled into growing the business.

SMC has worked together with the support of SBF to provide a dedicated channel to further expedite the settlement of disputes between landlords and tenants. The MOU furthers SMC’s aim to work closely with business associations to raise awareness in the business community on utilising mediation as a strategic tool for managing disputes. This new initiative makes it easier for landlords and tenants seeking to resolve their disputes quickly and amicably and the preferential mediation fees will help to further reduce legal costs.”

Mdm Cynthia Phua, Chair of Rental Practices Work Group (RPWG), said “Over the last few months, RPWG has continued efforts to engage tenants, landlords and relevant government agencies to gather feedback to improve the Framework and make it more robust and relevant to tenants and landlords. The MOU with SMC is the result of extensive consultations with the SMC on how we can best help tenants and landlords in practical ways. Moving ahead, the RPWG will continue to collaborate with various partners to further the cause of FTF.

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