Security Deposit Limits for Code of Conduct for Leasing of Retail Premises and Review Process

4 Mr Ng Shi Xuan asked the Deputy Prime Minister and Minister for Trade and Industry (a) how is the upper limit of three months’ gross rent for security deposits determined in the latest Code of Conduct for Leasing of Retail Premises; (b) when will be the next review of the Code; and (c) whether the Ministry has reviewed the appropriateness of the upper limit for security deposits in the two revisions.

Mr Gan Kim Yong: The Code of Conduct (CoC) for Leasing of Retail Premises was developed by the Fair Tenancy Industry Committee (FTIC) comprising tenant and landlord representatives.

The upper limit of three months' gross rent for security deposits set out in the CoC was based on the prevailing industry practice to require security deposits of three to six months of gross rent for a three-year retail lease. Setting the upper limit at three months seeks to strike a balance between avoiding undue strain on tenants' cashflow and protecting landlords against the cost of unit reinstatement.

The review of the CoC is ongoing and is expected to be completed by the first half of 2026.