Relief For Commercial Property Buyers Extended; Rental Relief To End Soon
SINGAPORE – Those who have acquired commercial and industrial property but failed to carry out their contractual obligations due to the COVID-19 pandemic will continue to benefit from temporary reliefs against legal and enforcement actions arising from such for an additional 3 months, announced the Ministry of Law on Monday afternoon (16 November, SGT).
The Ministry stated that the relief period for specific agreements as stipulated in the COVID-19 (Temporary Measures) Act will be prolonged to make sure businesses can still get temporary relief from against legal and enforcement actions until the “Re-Align Framework to Renegotiate Contracts For Businesses Significantly Impacted by COVID-19” comes into effect.
Notably, the framework that was debated in Parliament on 3 November will permit micro and small businesses that have suffered a decline in their revenue since the start of the virus outbreak to renegotiate specific agreements or rescind the contract earlier sans any penalty.
In particular, the temporary reliefs ¬¬– provided to buyers and developers who have entered into Options To Purchase (OTP) as well as Sale and Purchase Agreements (SPA) with each other – have been extended from 31 December 2020 to 31 March 2021.
This includes relief for delay in the delivery of possession under SPA that covers residential, commercial and industrial properties as stated in Part 8C of the Act.
“The extension will assist purchasers of residential, commercial and industrial properties who require more time to make their payments, particularly those who pay developers directly without taking a bank loan, with minimal impact to developers’ cash flow,” said the Ministry.
“It will also allow developers and purchasers to seek temporary protection from being sued during the relief period, if they are unable to perform any contractual obligations due to COVID-19,” it noted, adding that more details on Part 8C will be announced later.
Meanwhile, the relief periods for lease agreements and licences concerning non-residential properties will expire on 19 November 2020. Thereafter, parties to such contracts may begin or resume legal and enforcement action as stipulated in their contracts and allowed by the law, even if they received a Notification for Relief prior to that date. After 19 November, parties can no longer serve Notifications for Relief or Applications for an Assessor’s Determination.
Nonetheless, businesses that have leased non-residential properties that are qualified under the Re-Align Framework can still benefit from it when it’s implemented, even if their rental contracts or licence was rescinded after 19 November 2020. The reason for this is that the framework allows qualified parties to request for the adjustment of the contractual duties for agreements rescinded on or after 2 November.
Under the framework, parties can still be accountable for outstanding debts and obligations even if the deal has been axed. Notably, parties who have served a Notification for Relief are also liable for accrued arrears and obligations upon the expiry of the relief period.