The owner of a digital lock business housed in a Yishun industrial building claims government officials told him he would have to pay more than S$260,000 to continue using his unit as a showroom.

The owner, Ronn Teo, 33, said he could not pay the "land betterment charge" and had to close the businesses he owned at the industrial hub on Nov. 9, 2023, in compliance with the authorities' demands.

Teo said in an interview with Mothership that he felt the charges were too expensive for smaller businesses.

He claimed many other showrooms in the area are operating as normal and claimed they don't have to pay a "Land Betterment Fee".

Issued enforcement notice for using factory space as showroom

Earlier in May, Teo opened My Digital Lock Pte Ltd (Yishun) at level 1 of A' Posh Biz Hub at 1 Yishun Industrial Street 1.

He opened an interior design showroom in an adjoining unit a few months later.

He said that in September, Urban Redevelopment Authority (URA) officials checked his units and found that he was operating them as showrooms without the requisite planning permissions.

URA guidelines state that showrooms in industrial estates are confined to the first floor or basement and subject to "land betterment charges", as the land is primarily designated for use by factories.

Teo was issued an enforcement notice and required to cease operating the units as a showroom by Nov. 9 or potentially face fines and a jail term.

He complied by shuttering his businesses.

Previously, Teo had received a similar enforcement notice after he was found to be running a showroom and office on the second floor of the same building.

That was what prompted his move to the first-floor units in November 2022.

Felt the charges were too much

Teo told Mothership that he felt he had no choice but to close shop as the alternative — paying over S$260,000 of land betterment charges for each of his units — was too much.

The price was quoted in an invoice from the Singapore Land Authority (SLA), which he received in May after buying the space.

The charges would have to be paid every three years.

Teo said that he had already spent upwards of S$500,000 on the business, so the land betterment charges represented a sizeable added cost.

"Who has that kind of money?" he questioned.

He expressed that other small businesses like his would probably struggle to afford those charges.

Aftermath

Following the closure of his businesses, Teo said he is exploring alternative options with his legal team, such as replanning the space to reduce land betterment fees or paying it in instalments.

He does not know when he might be able to resume operations.

Since then, at least five of Teo's 85 employees have resigned as he could not offer them positions elsewhere.

Teo felt that his business had been unfairly singled out.

He claimed at least 40 other showrooms were operating in the Yishun industrial estate alone, including many in the same building.

Owner set up showroom without approval: URA and SLA

In response to media queries, URA and SLA confirmed in a joint statement that the primary use of the A' Posh Biz Hub industrial building is for factories and warehouses.

The authorities said that Teo himself had submitted a land use application in March for the space to be converted into a showroom.

After evaluation, URA informed Teo that the application would be approved, provided he paid the land betterment fee in advance.

The authorities clarified that using the factory space as a showroom for commercial purposes would increase the value of the land.

As Teo was unwilling to pay the fees, URA notified him in April that his application would not be approved, so he was not permitted to set up a showroom.

In September, when law enforcement officers inspected the premises, they found that the space was being used as a showroom, so they issued a notice for the units' closure.

According to a written parliamentary reply on Nov. 22, 2023, the URA investigates potential infringements involving commercial properties based on public tip-offs and regular checks.

As of October, 56 violations were detected and enforced against in 2023.

Top image from Teo.