Small-time Office Landlords

Small-time Office Landlords Tell Gov’t To Consider Their Situation

SINGAPORE – A small-time owner of an office property in the city-state is urging the government to compel assessors to take into account the landlord’s situation when deciding on rental relief under the Rental Relief Framework, according to an article posted on the forum section of The Straits Times on Monday morning (30 November, SGT).

“My wife and I operate a meetings, incentives, conferences and exhibitions (MICE) business, and we invested in a small office space, which is now fully paid for, about 15 years ago for our own use,” said Ng Beng Soon.

“As we are now in our 60s and nearing retirement, we decided a couple of years ago to work from home and rent out the unit for some retirement income.”

Due to the COVID-19 pandemic, an assessor appointed by the government determined that Ng’s office tenant is eligible for the Additional Rental Relief. However, the assessor resolved that the commercial property owner is not qualified for the rent relief reduction as the office space is registered under a private limited company established by the couple, instead of being owned by an individual or sole proprietor.

“How is a private limited company owned by two individuals who are near retirement age, and in one of the industries hardest hit by COVID-19 travel restrictions, deemed undeserving of relief compared with an individual or sole proprietor landlord?” asked Ng, who added they were not able to appeal as the decision by the assessor is binding.

Ng pointed out their MICE business has been severely impacted by the virus outbreak. Not only were all of their international events cancelled, and they had no income from the business, they also had to face large cancellation fees.

So, Ng asked how can the authorities seriously expect them to support their tenant which suffered much less than them.

In addition, Ng said that while the Rental Relief Framework suggests that there are other government programs office landlords can turn to for help, the assistance being offered by the framework are deferred payment schemes, which they don’t need. Also, the offered forms of support under the Rental Relief Framework are narrow and limited.

Meanwhile, in another forum post published on 18 November, an industry group representative urged the Ministry of Law to consider the situation of small-time lessors of commercial properties in Singapore.

Henry Mok Weng Foong – a representative of the S.O.S Small Owners Society, which consists of hundreds of small-time landlords – said the Re-Align Framework would negatively affect them.

The framework – which will allow small business tenants who recorded a large income drop due to the COVID-19 pandemic to renegotiate or terminate contracts without penalty – will be detrimental to small-time lessors as they would lose income. Consequently, those who have turned to bank loans to buy their commercial property will be further distressed as they would struggle to pay their loan instalments.

“Then there is the issue of the rent waiver provided by small landlords for June and/or July. Small landlords actually waived more than two months of rent, due to the disparity between annual value and actual rent.”

“Small landlords are different from the big landlords in that, at the start of any tenancy contract, small landlords are committed to paying a minimum of one or two months of brokerage fees and also to providing at least one month of a rent-free renovation period for the tenants,” he added.

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