More Rent Waivers and Support for SMEs With a 35% Drop or More in Revenue
Support in the Works for SMEs in Singapore Who Experienced a Decline From April-May
Singapore’s SMEs who record a 35% or more decline in their April-May revenue are eligible for more support and rent waivers.
SMEs (Small and Medium Enterprises) were hit hard by the Covid-19 pandemic.it is estimated that 26,000 SMEs will benefit from these measures. Eligible SMEs must have an annual turnover of less than $100 million in 2019. They must also have entered into the tenancy agreement before 25 March 2020.
This new support is extended in the Covid-19 (Temporary Measures)(Amendment) Bill. The bill will be tabled in Parliament on 5 June. If approved the changes are expected to be implemented by the end of July. The measures are to help the SMEs stay afloat given that recovery is likely to be on the slow side since Singapore’s economy is opening in phases.
Landlords will be mandated by law to provide additional rent waivers. This is in addition to the property tax rebates and cash grants by the Government. Landlords can apply to have their tenants and subtenants assessed for eligibility. If they do, the tenants will be examined by an approved assessor.
Tenants and subtenants in the F&B and commercial sector who qualify will receive rent waivers of four months in total. Two months will be from the Government. The remainder will be from the landlord. Industrial sector tenants will get rent waivers of two months, one each from the Government and landlord.
Some landlords might be eligible for reprieve if they cannot provide additional waivers. If that is the case, the landlord can seek assessment. The grounds for the assessment will be financial hardship. The Government is trying to achieve balance in this hard time and urge landlords and tenants to do their part together.
Late Payment Interest Cap
There will also be a cap on late payment of interests or charges for certain arrears contracts if the new bill is passed. If approved, tenants can pay the arrears in instalments to ease the burden. Under the scheme, instalment payments will commence by 1 November.
If a tenant fails to make the required payments, their license or lease could be terminated. If so, the scheme will then be cancelled. The landlord will be entitled to immediate payment of all their rental arrears. The new law will stop creditors from enforcing actions or terminating contracts of those who cannot pay their obligations. Since arrears for the contracts will carry on accruing, a late payment interest cap will be introduced.
The rent waivers and more support aims to minimise stores having to close due to financial hardship. Any tenant who couldn’t vacate their business premise can apply for relief too. However, they are only eligible if they could not vacate the premise because of the Covid-19 by the end of their lease or before the end of the moratorium on 19 October.