S$900m Given To Landlords Under Singapore’s Rental Relief Framework

SINGAPORE – The Inland Revenue Authority of Singapore (IRAS) revealed that roughly S$900 million in cash grants were handed out to qualified property owners under the rental relief framework implemented in 2020 to assist landlords and businesses impacted by the COVID-19 pandemic, reported The Straits Times on Wednesday (3 February).

Thanks to the cash grants, tenants were exempted from paying rent for months covered by the framework. Property owners also enjoyed S$1.8 billion in property tax rebates, and an additional 115,990 notices of cash grant were issued to landlords with lessees who were qualified for rental relief, said the government agency.

Although the rental relief had helped tenants of office space, retail shops, and industrial properties, some still struggled to fulfil their contractual obligations.

Consequently, the Ministry of Law (MinLaw) received over 8,400 notifications for relief from individuals and businesses to take advantage of the COVID-19 (Temporary Measures) Act, as they were unable to perform their contractual obligations amidst the health crisis.

Of the 8,428 notifications for relief served in 2020, MinLaw shared that 3,005 involved licenses and leases of non-residential properties. About 1,869 applicants also sought the intervention of an assessor because of a dispute. Of these, 769 applications involved leases.

“We were heartened to see that of the notifications for relief filed, the majority did not require an assessor to make a determination. We also saw parties who originally applied for a determination but were subsequently able to negotiate and reach an agreement by themselves,” said a MinLaw representative.

Notably, the reliefs granted businesses protection against legal and enforcement actions arising from their failure to perform contractual obligations (e.g. pay rent on time). Legal and enforcement actions include termination of leases and seizure of goods. The relief period expired on 19 November 2020.

MinLaw revealed that under the rental relief framework, which grants direct rental waivers, 3,214 applications for assessment were submitted as of the end of 2020. Of these, 2,123 applications were filed to evaluate lessees’ eligibility for rental relief. 720 sought landlord’s assessment for financial hardship, while 371 tackled the calculation of rental waivers.

Qualified tenants of office and industrial properties could get up to 2 months of rent waived, while those operating F&B outlets and other tenants of commercial space could get up to 4 months — two months each from their landlord and from the government.

The additional rent waivers were applied in April to May 2020 for small- and medium-sized enterprises (SMEs) leasing office and industrial properties, while those renting other types of commercial properties got rental waivers from April to July. But to receive the rental waivers, their leases should be in effect on 1 April of the same year.

Overall, almost 260,000 SMEs with a combined workforce of 2 million employees benefitted from the aforementioned measures.

Sans the rental relief framework, the economic impact of the COVID-19 pandemic would have been more serious, said Kurt Wee, President of the Association of Small and Medium Enterprises (ASME).

“Many more jobs would have been lost, many more shops would have closed, and it would have resulted in the real estate sector having an even bigger shift downwards. The downward cycle that the rental relief framework and various schemes arrested is extremely critical,” he explained.