Singapore locksmith company temporarily closes Yishun HQ, collaborates with URA for change of use application

SINGAPORE: Local locksmith company, My Digital Lock, has temporarily closed its headquarters situated on level 1 of A’ Posh Biz Hub at 1 Yishun Industrial Street 1.

During a September inspection, Urban Redevelopment Authority (URA) officials found that their units were being used as showrooms without the required planning permissions.

My Digital Lock was required to apply for a change in property use. Even if the application had been successful, the company would still be liable for substantial land betterment charges (LBC).

In their specific circumstances, Mr Ronn Teo, the director of My Digital Lock, previously disclosed that they were encountering a recurring expense of S$500,000 every three years to operate the showroom.

“It’s not a one-time payment,” he emphasized. “Every three years you need to make the payment. ”

“I believe not every entrepreneur could afford this amount of land betterment charges,” he added.

Failure by the company to comply by the deadline of 9th November could lead to penalties of up to S$200,000 per unit, a potential jail term of up to one year, or both.

My Digital Lock’s official Facebook page on 9 Nov confirmed the temporary closure of their Yishun HQ, advising customers to visit their alternate outlet.

Closure of HQ due to exorbitant land betterment charges

During a separate interview conducted by Mothership, he revealed that he was compelled to close his business due to the overwhelming burden of paying over S$260,000 in land betterment charges for each of his units.

This amount was stated in an invoice from the Singapore Land Authority (SLA) he received in May subsequent to the space purchase. These charges were stipulated to be paid every three years.

Expressing disbelief, he questioned, “Who has that kind of money?” and stressed that similar small businesses like his would likely struggle to afford such expenses.

Following the closures, at least five out of Teo’s 85 employees resigned as he couldn’t provide them with alternative positions.

Feeling unfairly targeted, Teo highlighted that, despite his closure, there were at least 40 other showrooms operating within the Yishun industrial estate, many of them situated in the same building.

According to MR Teo, the company invested close to S$700,000 in the renovation and purchase of three units at the B1 Industrial estate to construct its headquarters.

URA informed the owner to fulfill land betterment charge requirement

As reported by Chinese media 8 World News, URA and SLA jointly confirmed in response to media inquiries that the primary designated use for the A’ Posh Biz Hub industrial building is for factories and warehouses.

It was revealed that the owner himself had submitted a land use application in March to convert the space into a showroom.

Subsequently, following an assessment, URA informed Teo that his application would likely be approved under the condition of paying the land betterment fee upfront.

Following an assessment, URA notified the business owner that the application would likely be approved, contingent upon the payment of the land betterment charge.

“However, due to the owner’s unwillingness to cover the fees, URA notified him in April that his application would not be sanctioned, thereby prohibiting the establishment of a showroom.”

During a September inspection by law enforcement officers, it was discovered that the space was being utilized as a showroom, leading to the issuance of a closure notice for the units, the authorities clarified.

Hope to reopen on 29 Dec

In the most recent update shared on My Digital Lock’s official Facebook post, the owner mentioned that their Yishun HQ continues to remain closed.

They are actively collaborating with the URA to facilitate the application for a change of use.

Following this process, the SLA will issue them a new invoice for payment every three years.

“We appreciate the authorities for giving us the time to meet and discuss the possible scenario and guiding us on how to better resolve the issue ”

The company anticipates the reopening of their HQ on 29th December.

URA’s 60-40 rules for industrial properties

In Singapore, developers will need to pay the land betterment charge (LBC) for the right to enhance site use or construct larger projects.

The Land Betterment Charge Act came into effect on Aug 1, 2022, consolidating charges for land value enhancement under the Singapore Land Authority (SLA).

This new LBC regime replaced the previous development charge, temporary development levy, and differential premium regimes.

Additionally, the previously used Development Charge (DC) Table of Rates was substituted with the LBC Table of Rates, which is subject to half-yearly revisions.

According to IndustrialGuru, B1 industrial properties are clean or light industrial properties which are suitable for clean and light trades which are involved in light manufacturing activities; while B2 industrial properties are suitable for businesses with heavier manufacturing and production.

Under the URA’s 60-40 rule, URA allows up to 40% of gross space in industrial development that can be used for non-essential purposes, including ancillary offices, meeting rooms, showrooms, selected commercial uses (In outlying areas), childcare centres, industrial, canteen, workers’ dormitory and ancillary display area.

56 commercial properties found in violation of authorized use as of October this year

On 22 Nov, Minister for National Development Desmond Lee, in a written parliamentary reply, disclosed that as of October this year, a total of 56 instances of commercial properties violating their authorized use had been recorded, surpassing last year’s count of 53 cases.

Mr Lee highlighted that the URA actively investigates potential infringements related to commercial properties through a combination of public tip-offs and routine inspections.

“Where infringements are detected, enforcement action is taken against both the occupiers and owners of the properties.”

This response came following a Parliamentary Question (PQ) submitted by Chua Chu Kang MP Don Wee.

Mr Wee inquired about the frequency of URA’s checks to ensure compliance with authorized business use for commercial properties, the number of violations recorded in the past three years due to unauthorized business use, and the Ministry’s strategies to bolster enforcement against such violations.