17/09/2026
๐๐ง ๐ ๐๐ฎ๐ฌ๐ข๐ง๐๐ฌ๐ฌ ๐ญ๐๐ค๐๐จ๐ฏ๐๐ซ, ๐ก๐จ๐ฐ ๐๐๐ง ๐ฅ๐๐ง๐๐ฅ๐จ๐ซ๐๐ฌ ๐ข๐ง ๐๐ข๐ง๐ ๐๐ฉ๐จ๐ซ๐ ๐ฉ๐ซ๐จ๐ญ๐๐๐ญ ๐ญ๐ก๐๐ฆ๐ฌ๐๐ฅ๐ฏ๐๐ฌ?
Singapore recorded more than 38,000 business closures in the first seven months of the year, with the closures coming mainly from the construction and F&B sectors. But before winding up, many small businesses typically try to sell their operations. In a recent interview with the Business Times, Managing Director and Co-Head of Corporate Practice Samuel Yuen addressed the legal risks landlords face when this happens.
A principle known as privity of contract holds that only the parties who signed a contract can enforce rights or be held to obligations under it. This is significant where a business is sold through a purchase of its assets and operations, since the purchaser was never a party to the existing lease. A lease novation, transferring all rights and responsibilities to the new party while releasing the original party, would be necessary, requiring the consent of the landlord, the outgoing tenant, and the incoming party.
Landlords can also take precautionary measures before such a situation arises. This includes securing a guarantee from a tenant's parent or sister company with deeper resources to meet its obligations, said Samuel.
Without such safeguards, a landlord's recovery is no longer assured once the tenant's business winds up. As Samuel observed, "This means that when a tenant is wound up, the landlord joins the queue of creditors and may recover only a portion of what is owed."
Link to article: https://www.businesstimes.com.sg/singapore/business-takeover-how-can-landlords-singapore-protect-themselves
More about Samuel: https://yuenlaw.com.sg/bio/samuel-yuen/
More commercial establishments are closing this year, with many attempting to sell their operations first Read more at The Business Times.