If you are a business owner who has rented premises in Singapore during the current pandemic, you may be able to obtain Rental Relief under the COVID-19 Rental Relief framework.
The framework, set out in Part 2A of the COVID-19 (Temporary Measures) Act, came into force on 31 July 2020.
The framework is intended to assist Small-and-Medium Enterprises (SMEs) and specified Non-Profit Organisations (NPOs) through fair co-sharing of rental obligations between tenants, landlords and the government.
In this framework, landlords and the government relieve the rental obligations of tenants for specified periods.
This article will cover:
- How much Rental Relief may you be able to obtain?
- Conditions for eligibility for Rental Relief and Additional Rental Relief
- How can you obtain Rental Relief under Singapore’s Rental Relief framework?
- What happens if you do not receive an IRAS notice even though you are an eligible tenant-occupier?
- What happens if your landlord does not provide you Rental Relief?
- Repayment scheme for any outstanding rent not covered by Rental Relief
NOTE: the Rental Relief framework has ended. Please refer to our other article on the Rental Support Scheme for information on the cash payouts issued to tenants during the Phase Two (Heightened Alert) period from 16 May 2021 to 18 August 2021.
How Much Rental Relief May You be Able to Obtain?
The amount of Rental Relief being offered under the Rental Relief framework is as follows:
|Qualifying Commercial Properties||Other Non-Residential Properties|
(Paid by Government)
(April and May 2020)
|Additional Rental Relief
(Paid by Landlord)
(June and July 2020)
(April, May, June and July 2020)
(April and May 2020)
Conditions for Eligibility for Rental Relief and Additional Rental Relief
To be eligible for Rental Relief, you must have:
- Rented either a qualifying commercial property or other non-residential property;
- Entered into a written lease agreement before 25 March 2020; and
- Earned not more than $100 million in revenue for Financial Year 2018.
Additional criteria will apply for qualifying for Additional Rental Relief.
Rented either a qualifying commercial property or other non-residential property
Examples of qualifying commercial properties which qualify for Rental Relief include the following:
- Shops (e.g. retail, furniture, supermarkets);
- Entertainment venues (e.g. amusement centre, cinema, theatre); and
- Sports and recreational buildings.
- Hotel room or hotel function room;
- Serviced apartment or function room of serviced apartment;
- Meetings, Incentive Travel, Conventions and Exhibitions (MICE) venues (e.g. Singapore Expo, Changi Exhibition Centre, Suntec Singapore Convention and Exhibition Centre);
- Premises of an international airport (e.g. Changi Airport) or prescribed international cruise or regional ferry terminal (e.g. Singapore Cruise Centre, Tanah Merah Cruise Centre, Marina Bay Cruise Centre);
- Premises of tourist attractions (e.g. Singapore Flyer);
Examples of other non-residential properties that qualify for Rental Relief include the following:
- Industrial, business or science park properties;
- Petrol stations;
- Warehouses; and
- Agricultural properties.
Entered into a written lease agreement before 25 March 2020
This Rental Relief framework applies to eligible tenant-occupiers in qualifying leases that are in writing (or evidenced in writing). These leases must have been entered into before 25 March 2020.
It does not matter even if the lease had expired as long as it had been renewed (either automatically or in exercise of a right of renewal in the lease contract).
Additionally, the lease must have been in force at any time between 1 April and 31 July 2020 for qualifying commercial properties, and between 1 April and 31 May 2020 for non-residential properties.
If the property has been sublet, the eligibility is determined by the end-tenant occupier.
Earned not more than $100 million in revenue for Financial Year 2018
To be eligible for Rental Relief, tenant-occupiers (at an individual or entity level) must be either:
- An SME with not more than S$100 million in annual revenue for the Financial Year 2018 or a later appropriate period where applicable; or
- One of the following types of NPOs with up to S$100 million in annual revenue for the Financial Year 2018, or a later appropriate period where applicable:
- Members of the National Council of Social Service;
- Registered or exempt charities (as provided in the Charities Act);
- Specified arts and culture societies;
- National sports associations;
- National disability sports associations; or
- Specified trade associations.
Eligibility for Additional Rental Relief
To be eligible for the Additional Rental Relief, tenant-occupiers must have carried on business before 25 March 2020 and meet the following conditions:
|For SMEs||Where the tenant-occupier is a company/entity incorporated in Singapore in the period between 1 April 2020 to 31 May 2020, the Singapore group of entities’ aggregate revenue cannot be more than S$100 million for the Financial Year of 2018, or a later appropriate period where applicable; and|
|Must have suffered at least a 35% drop in average monthly gross income at the outlet level from 1 April to 31 May 2020, compared to 1 April to 31 May 2019, or alternative periods if the tenant-occupier was not operating as of 1 April 2019.|
|For NPOs||The tenant-occupier must have suffered at least a 35% drop in average monthly gross income at the entity level from April to May 2020, compared to April to May 2019, or alternative periods if the tenant-occupier was not operational as of 1 April 2019.|
Under the framework, tenant-occupiers are required to share relevant information with their landlords upon their written request within 5 working days to prove their eligibility for the Rental Relief and/or Additional Rental Relief. Relevant information could include:
- Financial statements for the relevant periods; or
- A statutory declaration from the tenant-occupier stating that they meet the eligibility criteria.
How Can You Obtain Rental Relief Under Singapore’s Rental Relief Framework?
From early August, the Inland Revenue Authority of Singapore (IRAS) will issue notices of cash grants to landlords with eligible tenant-occupiers. These notices will explicitly inform the landlords of the rental waivers that should be provided to their tenants.
The landlords are required to serve a copy of the IRAS notice on their tenants, in person or via registered post or email, within 4 working days of receipt of the notice.
For properties that have been sublet, landlords could directly serve a copy of the notice to both the intermediate tenant and the end-tenant occupier. If not, the intermediary landlord must also serve a copy of the IRAS notice on its tenant within 4 working days of receiving the notice and provide the necessary rental waivers.
If you have received the relevant notice, you will not need to pay rent for the months specified. This is unless you have entered into a prior contractual relationship with your landlord where the landlord had previously provided financial assistance to you. In that case, your landlord may offset the rental waivers with such financial assistance.
If your rent had already been paid, the rental waivers should be applied to the next immediate month of rent. If this is not possible, you may obtain a refund of the rent already paid from the landlord.
Bear in mind that your landlord may request you to prove your eligibility for the Rental Relief and/or Additional Rental Relief (as discussed above) before extending such relief to you.
What Happens If You Do Not Receive an IRAS Notice Even Though You are an Eligible Tenant-Occupier?
Your landlord may not have received a notice of cash grant if the landlord’s property is only partially let out, or the property is let out to both SME and non-SME tenant-occupiers under a single property tax account.
If you have not received the notice of cash grant from IRAS by 21 August 2020, either you or your landlord may make an application to IRAS at https://go.gov.sg/governmentcashgrant before 21 October 2020.
What Happens If Your Landlord Does Not Provide You Rental Relief?
If despite you believing that you are entitled to Rental Relief, your landlord does not provide you with any, you are strongly encouraged to first negotiate with your landlord to work out mutually agreeable arrangements that can best address their specific circumstances.
If you and your landlord are unable to reach such an agreement, either party may make an application for Rental Relief assessment with the Registry of Rental Relief Assessors within 10 working days of:
- The landlord receiving the notice of cash grant (if the applicant is the landlord)
- The tenant receiving the copy of the notice of cash grant (if the applicant is the tenant)
The Rental Relief assessor may decide:
- Whether the tenant-occupier is eligible for Rental Relief and/or Additional Rental Relief; and/or
- Whether the applicant landlord qualifies to provide only half the Additional Rental Relief on the basis of financial hardship.
As of 30 September 2020, the Rental Relief assessor will also be able to decide the exact amount of Rental Relief that should be provided, if the amount is affected by any of the following issues:
- The amount of maintenance and service charges (especially where these charges have not been expressly stated in the lease agreement)
- The amount that can be offset by any assistance the landlord has previously provided
- If you occupied the property for only part of the relief period
- Where the property has been sub-divided
How to apply for the Rental Relief assessment
The application for Rental Relief assessment can be done online using this form (for entities) or this form (for individuals). This application must be supported by documents and information specified in the Registrar’s directives.
If you require any assistance on the application, you may call the Registry during office hours at 1800-2255-772.
After application is made, the Registrar will acknowledge receipt in a few days. The applicant must serve a copy of the application with the acknowledgement on all landlords and tenants involved in the application within 5 working days after receipt of the acknowledgement.
This could be done via email, registered post, online messaging service, or website or social media contact forms. After serving the notice, the applicant must submit a declaration to the Registrar that the documents had been served.
The other party will have the opportunity to submit a response to the application within 5 working days after being served.
If needed, the Registry will contact the relevant parties to arrange a hearing or seek additional documents. The Registry will then make a decision which will be binding on all parties in the application. The decision will not be appealable.
Repayment Scheme for Any Outstanding Rent Not Covered by Rental Relief
If you have any outstanding rent that is not covered by Rental Relief, you may be able to use a repayment scheme provided for in the COVID-19 (Temporary Measures) Act to pay off such rent more manageably.
The scheme provides for the repayment of rental arrears in equal monthly instalments over a period of up to 9 months, with interest being capped at 3% per annum.
Under the scheme, the maximum amount of accumulated arrears that you can pay off under the repayment scheme are:
- 5 months’ rent for qualifying commercial properties
- 4 months’ rent for other non-residential properties
For the purposes of the scheme, “rent” refers to contractual rent and excludes fees such as maintenance fees and charges for providing cleaning and security services.
Who is eligible for the repayment scheme and how can they make use of it?
Tenant-occupiers who are eligible for the Additional Rental Relief will be able to qualify for this repayment scheme. Use of this scheme is optional.
If an eligible tenant-occupier intends to make use of the scheme, they are to:
- Serve written notice of their intention to do so to their landlord, as well as any guarantor/surety for these parties’ own obligations in the lease agreement, by 19 November 2020; and
- Make their first instalment payment by 1 December 2020.
What if the tenant-occupier fails to comply with the repayment scheme?
If a tenant-occupier fails to make payments according to the repayment scheme, the scheme ceases to have effect. The following will then be due for immediate payment:
- The amount of outstanding rent under the repayment scheme
- All interest and other charges that would have accumulated on such outstanding rent under the lease agreement had the repayment scheme not taken effect, deducting any interest already paid on this outstanding rent pursuant to the scheme
Additionally, the landlord will be allowed to enforce any of his rights as landlord under the lease agreement for non-payment of rent, and the interest and any other charges as mentioned above.
What if the landlord fails to comply with the repayment scheme?
If the landlord fails to comply with the repayment scheme, the scheme also ceases to have effect. The amount of outstanding rent and all interest and other charges, as mentioned above, will then be due for immediate payment.
The landlord is said to have failed to comply if they terminate the lease agreement for any other reason other than the following;
- The tenant-occupier fails to pay repayment instalment under the repayment schedule within 14 days after the amount was due; or
- The tenant-occupier terminates or repudiates the lease agreement midway through the repayment scheme.
When does the repayment scheme stop taking effect?
The scheme will stop taking effect when the remaining amount of outstanding rent has been paid off, or 9 months after the date the first instalment has been made, whichever is earlier.
While you may represent yourself during the assessment, you may also hire a lawyer to represent you during the assessment instead.
A lawyer would be able to best assist you in accurately managing the correspondence and documentation required for the Rental Relief assessment, and make arguments at the hearing if necessary. This would help you with getting the best possible outcome for the application.
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If you require legal advice on claiming Rental Relief under the COVID-19 Rental Relief framework, you may consult with experienced lawyers here.