03 Sep 2020 Posted in Press releases
- The COVID-19 (Temporary Measures) Act (the “Act”) was enacted in April 2020 to put in place a suite of legal reliefs and mechanisms to support businesses and individuals, and help them ride out the COVID-19 pandemic.
- Since the implementation of the Act, more than 6,800 parties have served Notifications for Relief to seek temporary relief for their inability to perform contractual obligations. In June 2020, the Ministry of Law introduced amendments to the Act to provide a rental relief framework for Small and Medium Enterprises (SMEs) and enhance the relief available for businesses, organisations and individuals affected by COVID-19.
The COVID-19 (Temporary Measures) (Amendment No. 2) Bill was introduced in Parliament today. It seeks to strengthen the assurance afforded by the Act through:
a. Expanding the powers of rental relief assessors;
b. Clarifying the interaction between Part 8 of the Act and other dispute resolution proceedings; and
c. Enhancing the certainty of alternative meeting arrangements.
If passed, these amendments will keep our legal interventions relevant and responsive to the continued uncertainty wrought by COVID-19.
- Further details of these amendments are still being worked out and will be announced separately. We aim for the amendments, together with the necessary changes in subsidiary legislation, to take effect before end September 2020.
(A) Expanded powers for rental relief assessors
Under the rental relief framework, a landlord who is unable to reach an agreement with his tenant may apply to have an independent rental relief assessor ascertain:
a. The tenant’s eligibility for rental waivers (either the portion supported by Government assistance, and/or the portion borne by the landlord)
b. The landlord’s eligibility to provide a reduced amount of rental waivers, on the basis of financial hardship
The amendments to the Act will expand the powers of rental relief assessors so that they can make determinations on unresolved disputes relating to the amount of rent to be waived under the framework, where the amount is affected by any of the following factors:
a. The amount of maintenance and service charges1, especially where such charges are not explicitly listed in the lease or licence agreement
b. The amount that can be offset by assistance provided by the landlord earlier
c. Tenant(s) occupying the property for only a part of the relief period
d. Sub-division of the property
(B) Clarifying interaction between Part 8 and other dispute resolution proceedings
- Part 8 of the Act provides a mechanism for parties to specified types of contracts to obtain relief if they are affected by breaches or delays in construction, supply or related contracts. Part 8 is not in force yet and more details on this relief will be announced shortly.
The amendments to the Act will ensure that the different dispute resolution mechanisms interact smoothly in the following manner when Part 8 is brought into force:
a. No application for relief under Part 8 can be filed under the Act if court, arbitral or Building and Construction Industry Security of Payment Act (“SOPA”) proceedings have already commenced in relation to the subject of the application.
b. Conversely, once an application for this particular relief is filed under Part 8 of the Act, the other party or parties to the contract cannot commence court, arbitral or SOPA proceedings for the same matter. This moratorium on legal proceedings will continue until a determination under the Act is issued or the application is rejected or withdrawn.
c. Where a determination under the Act has been issued and the terms of the contract adjusted, any subsequent applications and determinations made under SOPA must be based on the adjusted contract terms.
d. Where a SOPA adjudication application is made prior to the other party seeking relief under the Act, the SOPA adjudicator will be empowered to account for the effects brought about by COVID-19, by giving similar relief as an Assessor may provide under Part 8.
(C) Enhancing certainty of alternative meeting arrangements
- Part 4 of the Act empowers the Minister for Law to prescribe, by order, alternative virtual arrangements for meetings otherwise requiring personal attendance. This has benefited and enabled many organisations to proceed with their meetings remotely and safely during the pandemic. The current orders prescribing alternative meeting arrangements expire on 30 September 2020. (A list of the orders and regulators’ guidance notes can be found at https://www.mlaw.gov.sg/covid19-relief/alternative.)
- Some entities gave feedback that they would like greater certainty over the duration of the alternative meeting arrangements as they must plan for their meetings months in advance.
- The amendments to the Act will allow alternative meeting arrangements to remain in force, if necessary or expedient to prevent the spread of COVID-19, regardless of whether safe distancing regulations change or cease. The Ministry of Law will soon announce the extension of the orders prescribing alternative meeting arrangements. This will give organisations greater certainty and confidence to convene or hold meetings using the alternative arrangements.
MINISTRY OF LAW
3 SEPTEMBER 2020
1. Maintenance and service charges are excluded from the rental waivers. ↩
Last updated on 3 Sep 2020