Note on Rental Relief Framework
7 Jul 2020 Posted in Others
COVID-19 (Temporary Measures) (Amendment) Act - Rental Relief Framework
- The Rental Relief law1 was passed in Parliament on 5 June 2020. It provides rental relief to help SME tenants (including sub-tenants and licensees) who have been affected by COVID-19.
Who will qualify and how much relief am I entitled to?
- With the Rental Relief2, tenant-occupiers who are SMEs with ≤$100 million in annual revenue reported in the Year of Assessment 2019 will get 2 months’ rental waiver if they are in qualifying commercial properties (e.g. F&B, or retail shops), and 1 month’s rental waiver if they are in industrial/office properties.
- On top of that, the Additional Rental Relief will apply to tenant-occupiers who (a) have suffered ≥ 35% drop in average monthly revenue on an outlet level from April to May 2020, compared to April to May 2019; and (b) are SMEs at the group level (≤$100 million revenue based on the latest available accounts). The Additional Rental Relief provides 2 months’ rental waiver for qualifying commercial properties and 1 month’s rental waiver for industrial/office properties. This may be halved if the landlord is suffering financial hardship.
- The rental relief framework applies to qualifying leases or licences (i) entered into before 25 March 2020; or (ii) entered into before 25 March 2020 but expired and renewed either automatically or in exercise of a right of renewal in the contract.
- The Rental Relief law is supposed to support rental payments in the period of April to July 2020, as described in the table above. The rental waivers exclude service and maintenance fees, which will still be payable to the landlord. Any monetary payments or rental reductions agreed between the landlord and the tenant from February 2020, including the passing on of the Property Tax Rebate 2020, can be counted towards the landlords’ obligations across the relief period.
What should I do if I qualify?
- Starting from end-July 2020, IRAS will issue a notice of cash grant to qualifying property owners. Once the notice is issued, the rental is treated as waived under the Rental Relief law. Landlords are obliged to notify their tenants. Eligible tenants do not need to do anything.
- Tenants do not need to pay rent for the period covered by the rental relief framework. If rent has already been paid, tenants can either apply the rental waivers to the next immediate month(s) of rent, or if this is not possible, get a refund from their landlords.
- In order for the waivers to work smoothly, tenants and landlords should communicate and share information. Where necessary, tenants may be required to share relevant information with their landlords to prove their eligibility for the Additional Rental Relief. This may include signed/declared management accounts for the relevant months, or if these are not available, a statutory declaration from the tenant.
- Only tenants who are eligible for relief need not pay rent as described above. Tenants who do not qualify for relief and who do not pay rent will be subject to the consequences spelt out in the contract, including paying the rent accrued, and any applicable interest and charges.
- Tenants who are unable to pay their rent due to COVID-19 and require protection from legal or enforcement proceedings by their landlords may serve a Notification for Relief (“NFR”) under the COVID-19 (Temporary Measures) Act using the form accessible at the following link: https://www.go.gov.sg/nfr. After the NFR is served, the landlord may not evict the tenant or terminate the lease for the prescribed period (up until 19 October 2020).
- More information on the rental relief framework is available at https://www.go.gov.sg/rentalrelief, and in the videos accessible through the links below.
English video: link
Chinese video: link
Chinese translation of this note: link
1. This refers to the rental relief framework provided under the COVID-19 (Temporary Measures) (Amendment) Act.↩
2. The Rental Relief is provided through Government support to property owners. It comprises (i) the Property Tax Rebate 2020, which benefits tenants of qualifying non-residential properties; and (ii) the Government cash grant, which benefits SME tenant-occupiers of qualifying non-residential properties. ↩
Last updated on 7 Jul 2020