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Proposed law introduced to require landlords to provide 2-week rental waivers to SME, non-profit tenants

SINGAPORE — Landlords may soon have to provide two-week rental waivers to tenants who operate small- and medium-sized enterprises (SMEs) or non-profit organisations to help them in coping with restrictions during the heightened alert phase of the Covid-19 situation here.

  • Coupled with the Rental Support Scheme cash payouts, if an amendment to a Bill is passed, tenants will benefit from a total of about one-and-a-half months of rental support
  • Tenants who received the second payout under the scheme will receive a Notice of Rental Waiver from the Ministry of Law in October
  • Upon receiving the notice, those who wish to claim the rental waiver and meet the eligibility criteria must prepare supporting documents to prove their eligibility
  • The ministry encouraged tenants and landlords to work out “mutually agreeable arrangements based on their specific circumstances”

 

SINGAPORE — Landlords may soon have to provide two-week rental waivers to tenants who operate small- and medium-sized enterprises (SMEs) or non-profit organisations to help them in coping with restrictions during the heightened alert phase of the Covid-19 situation here.

The Ministry of Law (MinLaw) introduced this Rental Waiver Framework in the Covid-19 (Temporary Measures) (Amendment No 4) Bill in Parliament on Monday (Sept 13).

Coupled with the previous Rental Support Scheme cash payouts, tenants will benefit from a total of about one-and-a-half months of rental support if the amendment is passed.

Tenants who received the second payout under the scheme will receive a Notice of Rental Waiver from MinLaw in October.

The scheme, announced by Finance Minister Lawrence Wong in May, helps businesses with rental costs during the period of tightened restrictions as Singapore went on heightened alert against Covid-19 in May.

A total of one month of rental support for both periods of heightened alert — May 16 to June 13 and July 22 to Aug 18 — under the scheme was previously paid out as cash to qualifying tenants in privately owned commercial properties.

“At the same time, landlords were encouraged to provide rental support, though this has not been consistently offered. The Rental Waiver Framework will ensure the fair co-sharing of rental obligations over the Phase Two (heightened alert) periods among the Government, landlords and eligible tenants,” MinLaw said in a statement.

WHO IS ELIGIBLE

SMEs or non-profit organisations tenant-occupiers, including sub-tenants and licensees, of a qualifying commercial property must have:

  • An annual revenue that does not exceed S$100 million in the 2019 financial year

  • A lease or licence entered into or renewed before July 20 this year, and which was in force for the entire period from Aug 5 to 18, both dates inclusive

  • A lease or licence stamped on or before Aug 2

  • Suffered at least a 20 per cent drop in average monthly revenue during both periods of heightened alert compared to the period from Dec 28, 2020 to May 7, 2021, both dates inclusive, when the country was under the third phase of reopening after a partial lockdown last year

  • An annual group revenue not exceeding S$100 million in the 2019 financial year if it is part of a Singapore group of entities

An SME or non-profit organisation tenant-occupier who meets all eligibility criteria but has an unstamped lease or licence may make a manual application for rental waiver. Such cases will be assessed by a rental waiver assessor, MinLaw said.

Upon receiving a Notice of Rental Waiver from the ministry, the SME or non-profit organisation tenant-occupier who to claim the rental waiver and meet the eligibility criteria must prepare supporting documents such as profit-and-loss statements to prove their eligibility.

They must also complete a declaration form attached to the notice before submitting the required documents to their immediate landlord via email or registered post within 28 calendar days from the date of the notice.

The rental waiver will apply once an eligible tenant sends all the required documents — copy of the notice, completed declaration form and supporting documents — to their landlord.

“It will apply first to any rental arrears owed, including any associated interest or charges, for the period Aug 5 to 18, 2021, both days inclusive.

"If rent for Aug 5 to 18, 2021 has already been paid, the tenant’s rent for the next most immediate month will be reduced by two weeks,” MinLaw explained.

The ministry added that landlords who have provided rental support to their tenants during the phases of heightened alert may offset from their rental waiver obligations any direct monetary assistance or rental waivers provided to tenants from May 16 this year up to the date the landlord receives all the tenant’s supporting documents.

MinLaw encouraged tenants and landlords to work out “mutually agreeable arrangements based on their specific circumstances”.

“However, if they are unable to reach a compromise, they may make an application to an independent rental waiver assessor for a determination,” it said.

“We recognise that not all landlords will be financially able to provide the rental waiver, especially if they rely on rental as their main source of income. Such landlords may apply to be exempted from providing the rental waiver if they meet certain criteria.”

CORRECTION: An earlier version of this report's headline stated that Parliament has passed the new law. This is incorrect. The Bill was introduced on Sept 13, 2021, and would be debated the following day. We are sorry for the error. 

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Covid-19 rent landlord tenant SME minlaw Lawrence Wong

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