2 or 3 years lease term at an agreed rent is the market practice, there are companies requiring larger space often sign a longer lease term of 3 or more years. Longer lease terms are now difficult to obtain especially in good market condition.
Office Rental Payment
The term “gross rent” is used in the all Lease Agreement. This is a combination of the base rent plus the maintenance & service charge payable monthly or quarterly in advance. The gross rent is also subjected to 7% GST.
Option to Renew
Most landlords usually grant tenant an option to renew for a further term duration at a rent rate either agreed upon by both parties or at the prevailing market rent rate at the time of renewal.
Security Deposit
A lease term of 2 or 3 years requires tenant to put down a security deposit equivalent to 2, 3 or even 6 months' gross rent payable upon signing the letter of offer. Landlord may practice paying the security deposit in 2 stages
• Initial 1 or 2 month's gross rent deposit payable upon signing the letter of offer.
• The balance months' gross rent deposit plus 1 month advance rental payable upon signing the Lease Agreement.
The deposit is refundable without interest when the Lease expires but it is subjected to tenant's due performance of the terms and conditions in the Lease Agreement. The landlord has the right to deduct all costs and expenses payable by the tenant on account of any breach by the tenant.
Legal Fees & Stamp Duty
Tenant is responsible for legal costs for the preparation of the lease documents. The scale varies from landlord to landlord but this is not a major expense item.
Tenant is also responsible to pay the stamp duty on Lease documents.
Maintenance and Service Charge
Included in the gross rent, this provision is for services such as air-conditioning during office hours and management and maintenance of common areas.
The charges vary from building to building; exact figure is specified in the lease but can be change during the lease term. There is a clause in the Lease Agreement allowing Landlord to recover from tenant any increase of the service charge.