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d4vid
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Contract

Postby d4vid » Sat, 08 Mar 2008 3:41 pm

I'm currently a tenant of a stall in a Food Cout establishment in Singapore. I want to stop because it's not profitable and I keep losing money every month. When I talked to the Food Court management that I want to stop, they were furious and threaten to sue me because within the contract it is stated that if a tenant decides to stop within the 3yr, the tenant will have to pay the remaining rent until the end of 3yr contract.

When I signed the contract I didn't read this term and I know it's my fault to be so careless in signing it. If I had known such term I wouldn't sign it.

Can you guys help me as I'm in a very difficult situation now? I cannot continue running the stall as I keep losing money. In addition, recently our main cook had resigned.

If you have heard and had similar experience please share with me. Do you think they'll really sue me of the remaining rent? that would amount to around $200k, which for sure I don't have that much money :-(

Thanks for reading and any reply.
Last edited by d4vid on Tue, 11 Mar 2008 11:42 pm, edited 1 time in total.

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ksl
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Re: Breach in contract

Postby ksl » Sat, 08 Mar 2008 4:30 pm

d4vid wrote:I'm currently a tenant of a stall in a Food Cout establishment in Singapore. I want to stop because it's not profitable and I keep losing money every month. When I talked to the Food Court management that I want to stop, they were furious and threaten to sue me because within the contract it is stated that if a tenant decides to stop within the 3yr, the tenant will have to pay the remaining rent until the end of 3yr contract.

When I signed the contract I didn't read this term and I know it's my fault to be so careless in signing it. If I had known such term I wouldn't sign it.

Can you guys help me as I'm in a very difficult situation now? I cannot continue running the stall as I keep losing money. In addition, recently our main cook had resigned.

If you have heard and had similar experience please share with me. Do you think they'll really sue me of the remaining rent? that would amount to around $200k, which for sure I don't have that much money :-(

Thanks for reading and any reply.


Without reading the full contract details, its a difficult one. but i would think they may well be within their rights. However, you may be able to sublet...their must be plenting of willing people waiting for the opportunity ....what kind of food are you making, what location, and what's the monthly rental....there may well be people on the forum, that have an interest in sharing costs, or taking over!

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Re: Breach in contract

Postby d4vid » Sun, 09 Mar 2008 10:04 pm

ksl wrote:Without reading the full contract details, its a difficult one. but i would think they may well be within their rights. However, you may be able to sublet...their must be plenting of willing people waiting for the opportunity ....what kind of food are you making, what location, and what's the monthly rental....there may well be people on the forum, that have an interest in sharing costs, or taking over!


Btw, is it a standard lease contract in Singapore? I mean the tenant must serve the entire term of the contract? I thought I will only lose my deposit if I stop before the contract ends.
Last edited by d4vid on Tue, 11 Mar 2008 11:41 pm, edited 1 time in total.

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sundaymorningstaple
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Postby sundaymorningstaple » Sun, 09 Mar 2008 11:37 pm

For commercial premises it is pretty well standard. And enforceable as well. As ksl indicated, you may want to check if they will allow you to sublet (not all will) and that may well be your salvation. Otherwise, it could be a very hard lesson learned about reading ALL of the fine print in a contract and if you are not sure, take it to your lawyer for clarification.

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Re: Breach in contract

Postby ksl » Mon, 10 Mar 2008 12:29 am

d4vid wrote:
ksl wrote:Without reading the full contract details, its a difficult one. but i would think they may well be within their rights. However, you may be able to sublet...their must be plenting of willing people waiting for the opportunity ....what kind of food are you making, what location, and what's the monthly rental....there may well be people on the forum, that have an interest in sharing costs, or taking over!


We're making Indonesian food at Toa Payoh Central, monthly rental is $6k.
Please PM me if anyone interested in taking over the stall. There won't be any takeover fee. We'll leave the fridge, burners, rice cooker, etc. for you to use.

Btw, is it a standard lease contract in Singapore? I mean the tenant must serve the entire term of the contract? I thought I will only lose my deposit if I stop before the contract ends.


Wow very expensive, for a stall, although i don't know the standard rates for that area.

It looks like you will have to sublet, if that isn't a possibility, then i would consider sharing your kitchen, with alternative foods as well, like Chinese.

The problem with food, is that you must do your demographic research for the area, you are wish to set up. with Chinese population of around 75% in Singapore, I would think you would have to find out how many Indonesians are located around Toa Payoh Central, before deciding on setting up a food business.

Although foreigners also eat indonesian, food, you need, to research the demographics more.

Alternatively, just guessing, i would say Toa Payoh is mainly Chinese, you can hardly give up, the contract, but you could find yourself an excellent cook.

Try to find out what the normal rental rates are in the area, just to see, if you are being treated fairly.

1.Check out the rental rates, to see if you are paying a fair rental?
2.Demographics of the area
3.Consider a good alternative cook, capable of making more than one kind of food, if this is allowed.
4. You may have to consider more selection of meals, that cater for the majority of visitors.
5. Rome wasn't built in a day...starting a business means also building a loyal customer base too...Not many businesses manage to make profit within the first year. I don't expect you made a business plan, to see how many meals per day, you would have to sell, just to break even?


Here's the demographics for the whole area

Race Total % of residents

Chinese
696,566
80.6

Indian
85,969
9.9

Malay
59,695
6.9

Others
22,523
2.6

Total
864,753

You need a breakdoown of the same for Toa Payoh, to get any idea of survival. The figures for Toa Payoh should be available!
http://www.centralsingaporecdc.org.sg/1 ... 13068.html

I believe you may have a problem getting out of a contract, although you can advertise in the classifieds, to try and get someone to take over, or share wilth you.

If you cannot get out of the contract, you may need some guidance, to help you make the business turn profit. Keep us all informed of how you are getting on, I'm sure something positive will turn up, because Toa Payoh Central is a good place to be!

It's just a matter of having the right products for the market place to make money! I'll ask around for you too!

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Postby d4vid » Sat, 15 Mar 2008 3:46 pm

I managed to find a new tenant but the foodcourt management asked me to become the guarantor for the new tenant for one year. Is this a common practice for the previous tenant to become the guarantor for the new tenant? Can I reject and say that I don't want to become the gurantor?

I don't know the new tenant so it doesn't make sense that I become their guarantor.

btw, What is the liabilities of a guarantor?

Thanks!

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Postby sundaymorningstaple » Sat, 15 Mar 2008 6:32 pm

It's the same a being the tenant. If the new tenant defaults and vacates the premises the LL can come after you as you are still legally liable for the lease. Not a good deal at all. If the new tenant doesn't pay the rent the LL can come after you.

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Postby maneo » Sun, 16 Mar 2008 7:53 am

Guess you have to choose whether to be guarantor for a new tenant or to pay the remainder of the lease.
Being asked to be guarantor for only one year when it seems that you have more than 2.7 years remaining seems like quite a concession ($200K / $6K per mo = 33 months).

If the new tenant does turn out to be successful, you avoid paying $200K.
If not (and, yes, the landlord will come after you) then you may have at least reduced your liability. You can minimise this if you can get another tenant quickly.


Whether this tenant or any other, it seems you need a contract with the new tenant to control the unknowns. Now you need to think like a landlord.

You say you don't know the new tenant.
How about some research?

Can he provide references?

If this is his first attempt at doing food court business (not a good sign) does he have references for whatever else he did before?

Has he done a market analysis?
Why does he thnk he will succeed?

Not only is this an opportunity to avoid paying out the remainder of the lease, it is an opportunity to learn how to approach a new business and to learn about the legal aspects of doing business(contracts, etc.).

People pay good money going to business schools for all this.
The school of hard knocks provides some of the best education available.
Learn well.

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Postby ksl » Sun, 16 Mar 2008 7:12 pm

maneo is basically correct


Although i would suggest getting someone, with knowledge to go through your contract, if the landlord can knock it down to one year, if you can guarantor.

Me thinks, there could be a loop hole, to get you out of the contract within a certain time limit, probably within 3 to 6 months. Like I say, you need to know exactly what you have signed for.

Take the contract to the local legal advice officer, at the community centre, i think they give free advice once a week. You need a professional to look at that contract. also explain you alternative, with the new tenant.

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Postby Winxkid » Mon, 17 Mar 2008 1:42 am

engage a lawyer. if u have the money to lose, you will definitely have the money to engage a lawyer and see how you can go about doing it.

Food court management needs to provide marketing and increase it's flow. If they are unable to get you customers and thus making you lose money (You are doing business, mind You), what legal rights do they have. Bring it up to court and let the judge do a base to base basic.

If they blame You and your food, then I don't think it's right. Cos in the first place, they should place appropriate foods and limit some range.. but... you see... there's lotsa debating points. :D
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