HOUSING BOARD SHOP PREMISES (Tenancy assignments for companies/partnerships)

Mr Ho See Beng asked the Minister for National Development and Communications whether public limited corporations having branches for business in Housing and Development Board housing estates are subject to increase in rent if there have been changes/increases in the shareholders of such corporations.

Dr Tan Eng Liang (for the Minister for National Development and Communications): Mr Speaker, Sir, in letting out commercial premises, the Housing and Development Board rules apply equally to all its tenants, whether it is a large limited company or a small limited company incorporated with limited liability under the Companies Act. The point here is that in the case of a limited company, the company is a separate legal entity from that of its shareholders. The incorporated company's entity remains unchanged, even though there is a change of shareholders. A change in the shareholders of a limited company therefore does not, in law, require an assignment of the tenancy where the tenancy is in the name of the company.

It is otherwise in the case of a sole proprietorship or a partnership company. A change of the sole proprietor or substantial changes of the partners can amount to a change of the managements of these companies which may require a new tenancy agreement and a review of the current rental.