Generally, this can be classified into the following categories:

1. Outright sale of factory premises plus leasehold improvements to a prospective buyer
   
   
2. Corporate restructuring and/or assignment or transfer of lease of property to a related or joint-venture company where there is shareholding relationship between the assignor or transferor company and the assignee or transferee company.
   
   
3. Inclusion or withdrawal of partners within firm (Applicable for sole-proprietorship or partnership only)
   
   
4. Conversion of legal entities from sole-proprietorship or partnership to private limited company and vice-versa
   
   
5. Taking over of business as an ongoing concern, this involves a transfer of the manufacturing facilities, plant and machinery, and staff. The buyer will assume all business interests formerly undertaken by the seller. There is essentially no change in the existing approved site activities.
   
   
6. Sale and leaseback arrangement, where the industrialist assigns the property to a third-party facility provider and in turn rents it back again from the third-party facility provider for its continual usage. The intention is generally for the industrialists to offload its assets and lightens its balance sheet.
   
   The allowable third-party facility providers include Trusts/ Investment Funds that are holders of Business Trust Licence/ Capital Markets Services Licence issued by MAS, developers (i.e. those which have an established and credible track record of having been involved in the business of developing property-related projects in the last 5 years), and Industry Association/ Consortium sponsored vehicles that are supported by economic agencies (such as EDB and SPRING).
   

Obtaining CBPU and PUB Clearances

Please ensure that you have obtained clearances from Central Building Plan Unit (CBPU) and Public Utilities Board (PUB) for the Assignee's/ Transferee's (Buyer's) proposed usage, before submitting your application to JTC.

You may download the CBPU clearance form here and PUB clearance form here.

PUB's clearance is not required where:

• There is no change of use upon the assignment/ transfer of lease; and
• The potable water consumption of proposed usage is less than 500 cubic metres per month; and
• The Buyer is not applying for NEWater/ Industrial Water usage

Environmental Baseline Study (EBS)

• Introduction
  
  The purpose of conducting an Environmental Baseline Study (EBS) is to establish the level of potential contaminants in soil and groundwater beneath a concerned site and to determine the extent of contamination of the site.
  
  
• Implementation Guidelines
  
  If the assignor or transferor's (Seller's) usage or the proposed assignee's or transferee's (Buyer's) industry or activity falls within the following list, an Environmental Baseline Study (EBS) is required to be carried out as a condition to assign or transfer the lease:
  
  1. Oil installations and other premises storing, handling and using large quantities of oils and similar hydrocarbons products, including the following
     • Oil refineries;
     • Oil depots;
     • Petrochemical complexes;
     • Petrol stations and refueling depots;
     • Aircraft manufacture and repair industries;
     • Motor repair workshops.
  2. Chemical plants, chemical warehouses or terminals including the following
     • Chemical warehouses or terminals;
     • Pharmaceutical or biomedical plants;
     • Pesticides formulation factories;
     • Wood treatment and preservation facilities;
     • Large electroplating works;
     • Factories that use, manufacture or store toxic chemicals
  3. Shipyards and grit blasting works
  4. Gas works
  5. Power stations
  6. Toxic wastes treatment facilities
  7. Scrap yards
  8. Landfill site for municipal or industrial wastes
  9. Facilities for the treatment of sewage

This is in accordance with the Practice Circulars dated 6 August 2001 & 20 September 2002 issued by JTC to The Law Society of Singapore. For details, please click Practice Circular to view the circulars mentioned.

Guidelines for Assignment of Lease

• JTC has not commenced any legal action against you
  
  
• You currently do not have any outstanding rent or monies to be settled with JTC
  
  
• You are not in breach of any term, condition or covenant of the tenancy or lease agreement
  
  
• You are not carrying out any open land/ unauthorised subletting
  
  
• You and the Assignee/ Transferee (Buyer) comply with other Government Agencies' rules and regulations (e.g. URA's 60:40 usage quantum)
  
  
• Your existing usage and the Buyer's proposed usage is Industrial or Warehousing
  
  
• The Buyer's proposed usage complies with JTC's usage guidelines (i.e. usage should be compatible with JTC's usage zoning/ URA's land use zoning and does not fall within the Negative List or Further Assessment List etc) and does not comprise of dormitories.
  
  
• CBPU must have cleared the Buyer's proposed usage
  
  
• PUB must have cleared the Buyer's proposed water consumption if the Buyer is applying for NEWater/ Industrial Water usage or if the potable water consumption exceeds 500 cubic meters per month
  
  
• You have fulfilled the Plot Ratio (if any) and investment criteria stipulated in the Building Agreement, your remaining lease term is more than 3 years and you are not within the Prohibition or Restriction Period
  
  
• For info pertaining to third party facility providers, please click here.

The information listed above is to be used as a reference only. All applications are subject to final approval by JTC at JTC's discretion (including any terms and conditions that JTC may in its discretion impose with such final approval).

Notwithstanding any of the foregoing, JTC shall have the sole and exclusive right to receive, process and approve all applications according to such qualifying criteria as it deems fit and may at its discretion, reject any application or terminate your use of the website services as appropriate.

We retain the right, at our discretion, to modify, delete, edit or withdraw any part, component or all of the online request facilities at any time, or stop, restrict or suspend the same in relation to you or any other user(s) without being liable for any costs, expenses, losses and/or damages incurred by you or any other user(s) whatsoever.

Step-by-Step Guide to Assignment of Lease

Terms and Conditions

• Time Line for Completion

  The proposed assignment/ transfer should be completed within 3 months from the date of JTC's consent if the Environmental Baseline Study (EBS) is not stipulated as a requirement in the consent. For cases where EBS is required prior to legal completion, the proposed assignment/ transfer should be completed within 6 months from the date of JTC's consent. Any extension of the completion date is subject to JTC's assessment and approval, at JTC's discretion.

• Administrative Fees
   
  A non-refundable administrative fee of $235.40 (GST inclusive) will be charged at the point of submission of online applications. For applications submitted in hard copy, a non-refundable administrative fee of $588.50 (GST inclusive) is payable via cash or cheque.
  
  Where there is a change/ extension of use arising from the assignment of lease, an additional non-refundable administrative fee of $235.40 (GST inclusive) will be charged at the point of submission of online applications. For applications submitted in hard copy, a non-refundable administrative fee of $535 (GST inclusive) is payable via cash or cheque.
   
• Outstanding Charges

  All property tax, outstanding rent (subject to prevailing GST) and interest accrued therein and all other outstanding charges plus GST must be settled before completion of assignment/ transfer of lease. The Seller's solicitor will have to provide a letter of undertaking that they will deduct and pay to JTC direct from the proceeds of sale such sums plus GST owing to JTC upon completion.

• Rental Revision

  Rent may be revised upon assignment/ transfer of lease. The shareholding relationship between the assignor/ transferor (Seller) and the assignee/ transferee (Buyer) will be considered in the calculation of the revised rent.

• Payment of Land Rent

  The Seller shall continue paying the annual Land Rent and any revisions thereto until the date of completion of the assignment/ transfer of lease. JTC will continue to bill the Seller until and including the month of completion of the assignment/ transfer of lease. The Seller or Seller's solicitor shall notify JTC of the completion date of the assignment/transfer immediately upon such completion to enable JTC to bill the assignee with effect from the first of the month following the month of completion of the assignment/transfer of lease. The Seller's solicitor shall make the necessary adjustments with the Buyer or the Buyer's solicitor as regards the payment of the Land Rent billed by JTC before, on or after completion of the assignment/ transfer of lease.

  General illustration only:
  The consent to assign letter is dated 5 January 2011 and the Seller's solicitor notifies JTC immediately upon the completion of the assignment/ transfer of lease on 15 March 2011. Billing will be addressed to the Buyer with effect from 1 April 2011 (ie, the first of the month following JTC's receipt of the notification of the completion date of the Assignment).

• Resolutions

  Both Seller and proposed Buyer are required to submit to JTC a copy of their resolutions for the sale of the property. JTC will provide a standard format for the buyer's resolution. Resolutions are only required in the case of private limited companies.

• Rectification of Breaches

  It is the lessee's responsibility to ensure that he does not breach any of the lease terms, covenants or conditions, and observes and performs all his obligations. For more information, please refer to the List of common breaches.

  The proposed Buyer is advised to check with the Seller whether there are any breaches, and whether all breaches have been rectified. If, before or after completion of the assignment or transfer of lease, JTC finds any breach which has not been rectified or discovers any breach, JTC reserves the right to require the lessee to rectify and remedy the breaches.

  Thus, JTC will look to the Seller to rectify if it is before completion of the assignment/ transfer. But once completion of the assignment or transfer of lease takes place, JTC will look to the assignee or transferee (Buyer) to remedy all breaches which have either yet to be rectified or are discovered after completion of assignment/ transfer.

• Ancillary

  All ancillary facilities (eg cooling tower, condenser unit, store room) tied to the industrial unit and serving that industrial unit will also be assigned/ transferred.

• Wayleave

  Any wayleave on the property given by the Seller will be terminated upon assignment/ transfer of lease. Please inform JTC should the Buyer wish to retain the wayleave. The necessary reinstatement works relating to the termination of the wayleave must be completed before completion of assignment/ transfer lease.

• Minimum Leaseback Period and 50% Occupation by Seller

  For assignment/ transfer of lease under a sale and leaseback arrangement to an Allowable Third Party Facility Provider, the Seller is required to leaseback a minimum of 50% of the gross floor area (GFA) from the proposed Buyer for at least 3 years. For more information, please refer to the policies relating to Third Party Facility Providers.

• Right of First Refusal (ROFR) upon subsequent assignment/ transfer of lease

  A ROFR clause will be imposed on the Buyer upon JTC's consent to the assignment/ transfer of lease.

  How does the ROFR work?
  A lessee (Buyer) with the ROFR clause in the contract who intends to assign/ transfer the lease, is required to notify JTC and to make a written offer to JTC. The offer price should come with a valid valuation report. JTC will make an assessment and decide whether to exercise the right.

  1. If JTC exercises the right to buy the premises, JTC will negotiate with the lessee on a price that will be acceptable to both parties. JTC's buy-back price will be based on prevailing market value.
  2. If JTC does not exercise the right, the lessee can proceed to apply for assignment to other parties. However the lessee is not allowed to sell the premises at less than the offer price to JTC within 3 months from the date JTC rejects exercising the right. If the assignment to other parties within the 3 months period is not successful, subsequent intention to assign/ transfer the premise will have to go through the process of notifying and making a written offer to JTC.
• Mortgage

  If the property is still mortgaged by the Seller, then Seller is required to discharge his mortgage before completion of the assignment/ transfer of lease.

  If the Buyer intends to mortgage/ charge his interest in favour of financial institutions, the Buyer can do so after due acceptance by the Buyer and Seller of the terms and conditions of the assignment/ transfer of lease (see Step 4 of the Step-by-Step Guide) by giving JTC a Notice of Mortgage / Charge in accordance with JTC's Practice Circular dated 8 September 2008 issued to the Law Society of Singapore.

  The Buyer's lawyer may also submit the Notice of Mortgage or Charge on behalf of the Buyer. For queries on the Practice Circulars, you may call the following persons from our Legal Department :

  • Mr John Tan - 68833167
  • Ms Rani Hubert - 68833181
  • Ms Yeo Poh Lay - 68833190
• Deed of Assignment or Instrument of Transfer

  JTC no longer requires the submission of assignment/ transfer document to JTC for vetting and approval. Instead, Seller's solicitor must obtain written confirmation from JTC (PRIOR to the execution of the Deed of Assignment or the execution and registration of the Transfer Instrument) that JTC has no objections to the signing of the Deed of Assignment or the execution and registration of the Transfer Instrument.

  The Seller's solicitors shall notify JTC of the date of completion assignment or transfer immediately upon such completion. A copy of the duly signed Deed of Assignment or duly executed, stamped and registered Transfer Instrument should be given to JTC within 14 days from the date of legal completion of assignment/ transfer.

For info pertaining to third party facility providers, please click here.