FAQs for Situation C - Delay in delivering possession under a lease or license of non-residential property
Situation C – Where a lessor or licensor (i.e., a landlord) of non-residential property is unable to deliver possession by the date stated in the lease or licence agreement
A landlord of non-residential property may be unable to deliver possession to the tenant by the date stipulated in the lease or licence, due to COVID-19 related delays in a separate construction contract that the landlord has with a third party. The landlord may apply for relief under Part 8 in respect of its inability to meet the delivery date to the tenant.
Click here for a summary of the relief in this situation.
Part 8 also applies to the cases below. Further details may be found in the FAQs linked below:
1. What is the criteria I must fulfil before I can make an application for relief under Part 8?
You (the applicant) must fulfil the criteria below:
- You must be a party to a lease or licence of non-residential property (the “affected contract”) that:
- is entered into, or renewed, before 25 March 2020; or
- is entered into before 25 March 2020, and is renewed on or after 25 March 2020, either automatically or in exercise of a right of renewal in the lease or licence agreement.
- The affected contract must be in force at any time between 1 February 2020 and 31 March 2021 (both dates inclusive)
- You (the landlord) are unable to deliver possession or allow use of the property of the property to the lessee or licensee by the date stated in the lease or licence agreement (the “inability”) because of a delay or breach in a separate construction or supply (or related) contract (the parties to this contract need not be the same parties as the affected contract) and you could not have avoided the inability by taking reasonable steps
- The delay or breach occurred between 1 February and 31 March 2021 (both dates inclusive) due to COVID-19
In addition, relief under Part 8 of the Act is not available if court or arbitral proceedings have already been commenced in relation to the subject of your intended application.
2. What kind of determinations can a Part 8 Assessor make?
The Part 8 Assessor may vary the date stipulated in the lease or licence for the delivery of possession of the property to the lessee or licensee.
3. How do I apply for relief under Part 8?
You will need to submit an application to the Registrar. Further details, and the applicable forms, can be found here.
4. What is the latest date I can apply for relief under Part 8?
Your application must be filed before 31 May 2021.
5. Can the other party commence proceedings against me while I apply for relief under Part 8?
A temporary moratorium will apply once you have served the application for relief under Part 8 (the “Application”) on the other party or parties to the affected contract.
The moratorium will end on the earliest of the following:
- Your withdrawal of the Application
- The Registrar’s rejection of the Application
- The issuance of the Assessor’s Determination
Under the moratorium, the other party or parties to the affected contract may not start court or arbitral proceedings against you in relation to your inability to deliver possession by the date stated in the lease or licence agreement.
Please see section 37A of the Act here for the full list of prohibited actions during the moratorium.
6. I was unable to deliver possession of the property by the date stated in the lease agreement for reasons unrelated to COVID-19. Can I apply for relief under Part 8?
- No. To qualify for relief under Part 8, your inability to deliver possession of the property by the date stated in the lease agreement must be due to a delay or breach in a separate construction or supply (or related) contract, and that delay or breach must be due to COVID-19. Relief under Part 8 is not available if your liability for additional rental expenses arises due to other reasons.
- We encourage you to explore other dispute resolution mechanisms, such as negotiation and mediation. COVID-19 has had a significant impact on everyone. Parties should thus act reasonably and work together to reach a mutually acceptable solution.
7. My landlord has applied for relief under Part 8 and served the Application on me. What do I do next?
You will need to submit a Response to the Registrar, and serve it on the Applicant (i.e., your landlord). Further details can be found here.
8. My landlord’s failure to deliver possession of the property by the date stated in the lease agreement delayed the start of my business operations. I incurred losses as a result. What do I do?
You should explain your situation to the Assessor in in your Response. The Assessor will seek to achieve an outcome that is just and equitable in the circumstances, and may take into account:
- The impact that any adjustment may have on another contract that you may have with a third party (e.g., your contracts with your renovation contractors)
- Any loss suffered or benefit obtained by you in relation to the matter