Procedures of renting a factory and warehouse
After selection of warehouse or factory for rent, normally the tenant is required to place a one month booking deposit to accompany the Letter of Offer. Upon the Tenancy Agreement is signed, a security deposit which comprises of a minimum of 2 months rental equivalent is paid to the Landlord.
The amount of security deposit requested by Landlord is normally based on the risk assessment and credit standing of Tenant. Once the tenancy agreement is signed, it will be stamped. The stamp duty payable for stamping of Tenancy Agreement is based on the formula as provided in Stamp Act 1949.
Stamp duty on Tenancy Agreement = [(Rental per month x 12) – 2,400] divided by 250. For example for a 3 years tenancy, the stamp duty amount derived is multiplied by 2.
The vacant possession handover is the physical inspection by Tenant, Landlord and real estate agent to record down pre-existing condition of the warehouse or factory for rent on the day of commencement of the rental tenure.
Procedures of buying a factory and warehouse
Upon the selection of warehouse or factory for sale, the Purchaser is required to place a 2% earnest deposit to accompany the Letter of Offer. The Sale and Purchase Agreement (SPA) is normally signed within 14 or 21 working days from the date of the acceptance of the Offer by the Vendor. The 8% of Purchase Consideration is payable on this point.
Depending on the conditions precedent agreed upon for the warehouse or factory for sale, the balance of 90% of Purchase Consideration is payable within 3 months of the SPA becomes unconditional – that is all conditions precedent are being fulfilled. The common condition precedent for leasehold property is State Consent approval being obtained.
Upon the full settlement of the Purchase consideration, the handover of vacant possession of warehouse or factory for sale from Vendor to Purchaser will occur.