Ministry of Law's Response to ZB Forum Letter: About the Rental Relief Framework

20 June 2020 Posted in Replies

We refer to recent letters from ZB readers about the Rental Relief Framework, to help SMEs affected by COVID-19.

The Law passed in Parliament provides rent waivers and other relief to SMEs. The rental waivers are for the period of April to July 2020 for eligible SMEs in commercial properties (the Government will provide 2 months of cash rebates, and landlords will waive 2 months), and April to May 2020 for eligible SMEs in industrial/office properties (the Government will provide one month cash rebate, and Landlords will waive one month rent). The leases or licences must be entered into before 25 March 2020, or entered into before 25 March 2020 and subsequently renewed. Landlords are required to provide immediate rental relief to their SME tenants.

The Inland Revenue Authority of Singapore (IRAS) will issue the notice of cash grant or nominal notice to qualifying property owners from end-July 2020. IRAS will provide more details of the cash grant on its website, once they are finalised.

Landlords who face genuine financial hardship and are unable to afford to give the mandated rental waiver may seek an assessment by an Assessor, appointed by the Ministry of Law, who can halve the amount of additional rental relief to be provided by the landlord. They will take into consideration the annual value of the landlord’s properties and the proportion of the landlord’s dependence on the rental income for his livelihood. More information on the application process and assessment criteria will be shared in due course.

We would also like to highlight that while the Government cash grant to be provided to landlords is based on the net rent of the property, the value of the rental waiver to be provided by landlords is based on the base rent of the tenant. Base rent, for the most part, should be lower than net rent as it excludes any variable rent based on gross turnover as well as maintenance fee and charges for the provision of services such as cleaning and security.

In times like this, when many parties are facing challenges, it is in everyone’s interest to communicate with an open mind and come to a mutual arrangement to tide through this crisis together.

For more details on the Rental Relief Framework, please visit www.mlaw.gov.sg/covid19-relief.

Andrea Goh

Director, Corporate Communications Division, Ministry of Law

Last updated on 20 June 2020