Real Estate

Rental Waiver Framework for SMEs and Specified Non-Profit Organisations Affected During Phase 2 (Heightened Alert)

On 14 September 2021, the COVID-19 (Temporary Measures) (Amendment No. 4) Bill ("Bill") that seeks to amend the COVID-19 (Temporary Measures) Act 2020 ("Act") was passed in Parliament. The Act provides for, among other things, targeted and temporary reliefs for individuals and businesses that are unable to perform certain contracts due to the uncertainties brought about by COVID-19.

Among other changes, the Bill amends the Act to provide a Rental Waiver Framework ("RWF") to support Small and Medium Enterprises ("SMEs") and specified non-profit organisations ("NPOs") affected by the tightened safe management measures during Phase 2 (Heightened Alert). Eligible tenants of commercial properties may apply for waiver of rent and licence fees under their leases and licences in specified situations, for the period starting on 5 August 2021 and ending on 18 August 2021.

Under the RWF, landlords will be required to provide a rental waiver of two weeks of gross rent[1] to eligible SME and specified NPO tenant-occupiers of qualifying commercial properties. The RWF complements earlier support measures, one of which was the Rental Support Scheme ("RSS") that provides one month of rental support in total as cash for qualifying tenants in privately owned commercial properties. Together with the RSS cash payouts, these tenants will benefit from a total of about 1.5 months of rental support. The RWF is expected to start in October 2021.

In this Update, we outline the main aspects of the RWF which are pertinent to tenants, intermediary landlords (landlords who are not the property owners and sublet the property) and property owners.