Commercial landlords to provide 2 weeks of rental waiver to qualifying SME and non-profit tenants

SINGAPORE – Commercial landlords will be required to provide two weeks of rental waiver to eligible small and medium-sized enterprises (SMEs) and non-profit organisations affected by phase two (heightened alert) measures.

Taken together with the one month of rental support in cash announced by the Government earlier this year, qualifying tenants in privately owned commercial properties will receive about 1½ months of rental support in total.

The Rental Waiver Framework was introduced in proposed amendments to the Covid-19 (Temporary Measures) Act in Parliament on Monday (Sept 13).

It is intended to assist SMEs and specified non-profit organisations that were affected by the tightened safe management measures which were introduced from May 16 to June 13 and July 22 to Aug 18 this year.

To qualify for the rental waiver from landlords, the tenant needs to meet several criteria.

These include having suffered at least a 20 per cent drop in average monthly revenue during both phase two (heightened alert) periods as compared with the phase three period from Dec 28 to May 7.

If the tenant is part of a Singapore group of entities, the group’s annual revenue must not exceed $100 million in financial year 2019. This requirement does not apply to firms which are not part of any group of companies.

In a statement, the Ministry of Law (MinLaw) noted that the Rental Waiver Framework complements other support measures, including the Rental Support Scheme, introduced to cushion the economic impact of the heightened alert phases on workers and businesses.

The first payout under the Rental Support Scheme was given out from Aug 6, and the second payout will be disbursed from next month.

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While landlords were encouraged to provide rental support during the two heightened alert periods, this was not consistently offered.

The framework will ensure the fair sharing of rental obligations over the heightened alert periods between the Government, landlords and eligible tenants, MinLaw added.

Tenants who received the second payout under the Rental Support Scheme will receive a notice of rental waiver from MinLaw next month.

Receiving the notice does not automatically qualify the tenant for the waiver.

They will be required to prepare the necessary supporting documents and send them to their immediate landlord within 28 calendar days from the date of the notice.

The rental waiver will apply once an eligible tenant sends the documents to their landlord.

It will apply first to any rent owed, including associated interest or charges, for the period from Aug 5 to Aug 18 inclusive.

If rent for that period has been paid, the tenant’s rent for the next most immediate month will be reduced by two weeks.

Landlords who have provided rental support to tenants during the heightened alert phases may offset from their rental waiver obligations any direct monetary assistance or rental waivers provided from May 16 up to the date they receive all the tenant’s supporting documents.

MinLaw said it recognises 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, and may apply to be exempted from providing the waiver if they meet certain criteria.

The eligibility criteria for exemption include the landlord’s investment properties having an annual value of less than $60,000.

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The ministry said: “Tenants and landlords are encouraged 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.”

More information on the framework is available at this website.


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