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9 tenants, developer in legal dispute over Square2 mall

Retailers sue over empty pledges; Novena Point counter-sues for unpaid rent

SLUGGISH business in the shopping mall sitting above the Novena MRT station has led to a legal tussle between a group of disgruntled tenants and the developer.

The nine tenants of Square2 have sued the developer for misrepresentation, claiming that they were made several promises, such as the scale of advertising and promotion campaigns, which have remained unfulfilled.

Novena Point, which is under the Far East Organization umbrella, has denied making misrepresentations and is counter-suing the tenants for rent and other charges.

The mall, conceptualised as a Korean-themed one, has 150,000 sq ft of retail space on five levels. It has more than 200 retail tenants.

The nine tenants, including a gift shop, a hair salon, a fashion retailer and an eatery, opened for business in the first two months of last year.

Depending on shop size, they pay rents ranging from about $1,900 to over $12,000 a month.

Last month, the nine, represented by lawyer Leonard Loo, filed a lawsuit in the Subordinate Courts against Novena Point.

The claim did not specify the quantum of damages, as the plaintiffs are asking the court to assess the amount they deserve if they win the case.

Alternatively, the plaintiffs are asking that their tenancy agreements be rescinded and for the rents they have paid to be refunded. In their statement of claim, they say they took up their shop spaces based on oral representations made to them by the developer’s representatives and its brochures.

The promises, the tenants claim, include:

  • That there would be specific shopping zones such as a ‘digital world’ selling electronic gadgets in the basement and Korean-themed shops on Level 3, where shop staff would wear traditional Korean costumes;
  • That Korean artistes like K-pop star Rain would be brought in monthly to promote the mall;
  • That $6 million would be spent on advertising and promotion.

    But the defendant failed to deliver on these, the tenants said.

    The shops have not been zoned, but are scattered, and no ‘digital world’ has been created. They added that

Korean artistes did not grace the mall every month, and that the defendant had not spent $6 million on promotions.

Some tenants claimed they have been locked out of their shops and that their rent cheques have been rejected without reason.

The defendant, represented by Allen & Gledhill, is denying these claims. In its defence filed last week, it said that while it had approached electronics retailers to take up shop units, it never set out to pitch Square2 as an IT mall like Sim Lim Square or Funan.

It added that while Level 3 has a Korean theme, it never said operators would wear Korean costumes. Korean artistes have come to the mall, but it was never promised that such appearances would happen every month.

As for Rain, it said that all that was said was that it would try to bring him in.

The developer also claimed to have put in considerable effort into promoting the mall, but never committed to spending $6 million on this. It has so far spent $2.9 million.

It asserted that six of the tenants were in rental arrears despite reminders, so their leases were terminated.

Their cheques were returned because partial payments were not accepted.

It is contending that the tenants each owe between $1,800 and $51,000 in rent.


Source: The Straits Times 10 Jan 08


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