On 13 May 2020, Singapore’s Ministry of Law announced enhancements to the regulatory framework introduced by the COVID-19 (Temporary Measures) Act to offer temporary relief to parties who have contractual obligations to fulfil on or after 1 February 2020 under specified scheduled contracts entered into, or renewed, before 25 March 2020. Eligible applicants may seek relief during the current relief period, which runs from 20 April 2020 to 19 October 2020 (both dates inclusive), by submitting a notification for relief. The links are available from the Ministry of Law’s website here.
The enhanced measures offer support to two (2) categories of individuals or corporates who have been affected by the COVID-19 outbreak:
The first category of beneficiaries are those who are parties to options to purchase, sale and purchase agreements and agreements for lease of private residential property and HDB units, which are acquired from a private housing developer or the HDB. Property zoned for mixed residential and business use will also be eligible. These beneficiaries are offered temporary relief through the extension of the list of scheduled contracts specified in the COVID-19 (Temporary Measures) Act.
The second category of beneficiaries are parties to scheduled contracts who are subjected to unilateral increases of any charges or interest rates payable under scheduled contracts, unless such increase
The enhanced measures were also announced alongside the commencement of the COVID-19 (Temporary Measures) (Transfer of Benefit of Property Tax Remission) Regulations 2020 which mandates the passing on to tenants of a corresponding portion of property tax remissions granted by the Government to owners of non-residential property. These regulations have been discussed in our previous update found here and take effect from 13 May 2020.
As we head towards the end of the extended circuit breaker period on 1 June 2020, with hope that step-down measures will be announced, businesses are encouraged to bear in mind that the initial 6-month relief period will come to a close on 19 October 2020. To prepare ahead, businesses and guarantors are encouraged to re-evaluate their financial obligations and cash forecasts, and to take a careful look at business relationships, existing strengths, and new opportunities in an awakening marketplace.
For more on this topic, please refer to our article on COVID-19 and Financial Distress: Practical Measures for Company Directors from the viewpoint of a Director – Steps to save your Company.
Notification for Relief Form 1. https://www.mlaw.gov.sg/files/Form-1.pdf
Check out other COVID19 related updates and resources, HERE.