A Bill by the Ministry of Law will be introduced in Parliament on June 4 and June 5, 2020 to help provide a rental relief framework for small and medium enterprises (SMEs).
Eligible SMEs to receive up to four months of rental waivers
The Covid-19 (Temporary Measures) (Amendment) Bill, if passed, will make it mandatory for landlords to provide stipulated rental waivers for SME tenants renting commercial, industrial and office properties.
The rental relief framework will help to alleviate the pain borne by businesses in the the badly-hit economy, which has affected nearly 260,000 SMEs and more than two million employees in Singapore.
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According to the Fortitude Budget announced by Deputy Prime Minister Heng Swee Keat on May 26, 2020, the government will provide additional cash grants equivalent to roughly 0.8 months of rent for eligible commercial properties, and 0.64 months of rent for eligible industrial and office properties.
Including the Property Tax Rebate granted in the Resilience Budget, the government will provide a total of two months’ rental relief for SME tenants in commercial properties and one month for SMEs renting industrial and office properties.
To ensure that these grants and rebates will be provided for the SMEs, the Bill drafted will make it mandatory for landlords to provide the waivers for tenants.
Law will mandate landlords to provide additional waivers
On top of the government assistance provided, the Bill will expect landlords to provide rental waivers for SMEs who have seen a significant drop in their average monthly revenue.
Landlords will need to provide rental relief for tenants who have seen turnovers drop by at least 35 per cent or more, Law Minister K Shanmugam told reporters on June 2.
SMEs falling under this category will get an additional two months’ rental waivers for commercial properties, and one month for industrial and office properties.
In total, eligible SMEs renting commercial properties can receive a total of four months’ waiver of their base rental, and two months’ waiver for industrial and office properties.
The Ministry of Law is also introducing an amendment that will provide relief for tenants who are facing difficulties vacating their work premises after their lease or license has come to an end, due to the current Covid-19 situation.
If the tenant is unable to vacate the non-residential property between the end of the lease and before Oct. 19, 2020, the tenant may serve a notification for relief on the landlord, and will not be liable for failing to vacate the property until Oct. 19, 2020.
Landlords facing financial hardship may seek assessment
For landlords who are unable to provide the additional rental waiver may seek an assessment on the grounds of financial hardship.
If the landlord’s rental income forms a significant part of their total income, they may qualify for a smaller waiver, giving half of the additional rental waivers instead of the full amount.
This would equate to one month of additional rental relief for commercial properties, and half a month of waiver of base rental for industrial and office properties.
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