SINGAPORE: Some contractors, tenants and landlords affected by contractual delays or breaches due to the coronavirus situation can now apply for relief, as amendments to the COVID-19 (Temporary Measures) Act came into force on Wednesday (Sep 30).
The amendments enhance a legal mechanism – known as Part 8 of the Act – for parties to obtain relief if they are affected by delays or breaches in construction, supply or related contracts. These must be "materially caused by COVID-19", said the Ministry of Law (MinLaw) in a press release.
AdvertisementAdvertisementThis was among the second set of amendments to the Act passed in Parliament earlier in September.
In June, the first amendments were passed to require landlords to provide more rental waivers to small- and medium-sized enterprises affected by COVID-19.
[h=3]READ: Updates to rental relief measures as amendments to COVID-19 temporary legislation passed[/h][h=3]READ: Amended COVID-19 laws passed requiring landlords to give SME tenants more rental waivers[/h] AdvertisementAdvertisementWHO CAN APPLY FOR RELIEF
Under Part 8 of the Act, parties can seek relief under three situations.
People who have rented goods for use in construction work can apply for relief if they are liable to their suppliers for additional rental expenses due to a delay or breach in a contract, said MinLaw.
For example, a contractor may have rented goods – such as scaffolding material or hand drills – from a supplier to perform work under a construction contract with a third party.
In the second situation, tenants of non-residential properties can apply for relief if they are unable to carry out or complete renovation or fitting out works during their rent-free period due to the COVID-19 situation.
Third, landlords of non-residential properties can apply for relief if they are unable to deliver possession or allow use of property by the date stipulated in a lease or licence, due to coronavirus-related delays in a separate construction contract.
[h=3]READ: Construction demand to plunge this year after COVID-19 stalls projects[/h]ASSESSOR MAY ADJUST CONTRACTUAL TERMS
To mitigate the impact of a delay or contract breach on the applicant, an assessor appointed by the ministry may adjust the contractual terms.
For instance, where a contractor is liable for additional rental expenses for equipment, the assessor may adjust the date by which the renter must return the goods, or the rental rate payable for the duration that the goods are being held.
Similarly, the assessor may extend the rent-free period in cases where a tenant of a non-residential property is unable to carry out or complete renovation during the rent-free period.
For all eligible applicants for relief, the affected contract must have been entered into before Mar 25 to be eligible for relief.
Leases or licences renewed on or after Mar 25, either automatically or in exercise of a right of renewal in the agreement, are also eligible.
In addition, the affected contract must be in force at any time between Feb 1, 2020 and Mar 31, 2021, and the delay or breach in the construction, supply or related contract must also occur within that period.
Applications for relief must be submitted by May 31, 2021.
Once an application is filed, no party to the contract can commence court or arbitral proceedings, nor proceedings under the Building and Construction Industry Security of Payment Act (SOPA) in respect of the matter, said MinLaw.
Similarly, no application for relief under Part 8 of the Act can be filed if court, arbitral or SOPA proceedings have already started.
[h=3]READ: COVID-19 – Alternative arrangements for meetings extended until end-June 2021[/h]EXPANDED POWERS FOR RENTAL RELIEF ASSESSORS
The amendments that take effect on Wednesday also expand the powers of rental relief assessors, allowing them to make decisions on unresolved disputes relating to the actual amount of rent to be waived under the rental relief framework.
This will apply when the amount is affected by maintenance and service charges, especially if they are not listed in the lease or licence agreement; when the amount could be offset by assistance provided earlier by the landlord; when the tenant is occupying the property for only a part of the relief period; and when there are multiple sub-tenants in the same property, not all of whom may be eligible for waivers.
Landlords or tenants who seek a rental relief assessor's determination should submit their applications by Oct 14, if they received the Inland Revenue Authority of Singapore's (IRAS) notice of cash grant or copy of the notice on or before Wednesday, said MinLaw.
If they received IRAS' notice after Wednesday, they should submit their applications within 10 working days.
Late applications may still be considered on a case-by-case basis, added the ministry.
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