Covid-19 Rental Relief Framework

[vc_row][vc_column][vc_column_text]With the intent to help SMEs to better cope with the impact from Covid-19, the government has passed the Covid-19 (Temporary Measures) (Amendment) Act in Parliament on 5 June 2020. This Act serves as a timely relief for SMEs by providing mandatory co-sharing of rental obligations between the government, landlords and tenants.

 

Coming into force by the end of July 2020, the rental relief framework will provide a higher level of support for SMEs. Eligible SMEs which are tenant-occupiers and operate their business in a rented property can receive the following rental relief:

 

Duration of Rental Relief
Type of Relief Qualifying Commercial Properties (eg. shops) Other Non-Residential Properties (eg. industrial/office properties)
(A) Rental Relief provided by Government
Rental Waiver 2 months
(April and May 2020)
1 month

(April 2020)

(B) Additional Rental Relief provided by Landlords
Rental Waiver 2 months
(June and July 2020)
1 month

(May 2020)

Total 4 months
(April to July 2020)
2 months

(April to May 2020)

 

The rental waivers may be offset by:

  1. any monetary payments or reduction of rent/licence fee provided for, or previously agreed to, by the landlord to the tenant-occupier from February 2020 onwards, and/or
  2. any Property Tax Rebate that has been passed on by the landlord in respect of the property.

 

 

Government Support for Landlords

In lieu of the landlords’ obligations to provide for the additional rental relief, the government will also support landlords of different properties through the following:

 

Type of Support for Landlords

by Government

Qualifying Commercial Properties (eg. shops) Other Non-Residential Properties (eg. industrial/office properties)
Property Tax Rebate for Year 2020 1.2 months 0.36 month
Additional Cash Grant 0.8 month 0.64 month
Total 2 months 1 month

 

 

Eligibility Criteria

The Covid-19 Rental Relief Framework will be applicable for tenant-occupiers who:

  1. Have suffered > 35% drop in average monthly revenue on an outlet level from April to May 2020, as compared to April to May 2019 AND
  2. Are SMEs with < $100 million in annual revenue for the financial year ending 2018, based on YA 2019.

 

 

Qualifying Leases

The Covid-19 Rental Relief Framework applies to qualifying leases or licences which are:

  1. Entered into before 25 March 2020 or entered into before 25 March 2020 but expired and renewed either automatically or in exercise of a right of renewal in the contract AND
  2. In force any time between 1 April to 31 July 2020 for qualifying commercial leases/licences; and 1 April to 31 May 2020 for other non-residential leases/licences.

 

 

How Rental Waivers will be Effected

From end July 2020, IRAS will issue a notice of cash grant and disburse the funds to qualifying property owners. Property owners are then required to serve a copy of the notice to their tenants. Once the notice of cash grant is received, the rental is then treated as waived under the Act. Tenants do not need to submit any application to obtain the rental waiver.[/vc_column_text][/vc_column][/vc_row]

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