Businesses and Individuals Have Submitted Over 8,600 Notifications for Contractual Relief

By
Ashley Seek
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When COVID-19 took the world by storm last year, many livelihoods were affected.

Needless to say, many jobs were affected which led to retrenchment and some unable to pay their bills.

In an attempt to combat this, the government introduced the COVID-19 (Temporary Measures) Act.

What it does is:

  • deferring contractual obligations
  • suspends rental payments for up to six months.
  • and prevents deposits paid from being forfeited
  • gives parties time to work out a mutually acceptable compromise

Events related to weddings, tourism and conferences were also covered under this act.

The relief period was also extended in October between one to five months, varying based on the contract.

And there was a lot of businesses and people who had to apply for it over the last year.

Businesses and Individuals Have Submitted Over 8,600 Notifications for Contractual Relief

As of 23 Feb, there have been around 8,600 notifications for temporary relief from contractual obligations.

66 per cent were related to hire-purchase agreements for commercial equipment or vehicles, and rental of commercial and industrial property.

However, every business and person has different needs which would result in disputes for eligibility.

There were around 1,967 applications for an assessor’s resolve said disputes and over 250 professionals volunteered and served those roles as well.

This update came on 2 March, Tuesday, from Second Minister for Law Edwin Tong.

While all of this is encouraging, one scheme cannot possibly meet the needs of everyone.

Thankfully, various schemes and frameworks have also kicked off to help.

Rental Relief Framework 

The first of these is the Rental Relief Framework.

Put simply, qualifying property owners will receive support via a Government cash grant to eligible Small and Medium Enterprises and specific non-profit organisations.

However, they must also provide rental relief to said organisations and enterprises.

As of 23 Feb, 116,946 notices of cash grant have been issued to landlords of eligible properties.

This totalled roughly $947 million of government cash grant issued.

The framework also saw 3,373 applications for assessors who would determine the eligibility for rental waivers.

20 assessors with finance and accounting backgrounds were also assigned to weigh-in applications.

Re-align Framework

This scheme came a little more recently in January this year.

The Re-Align Framework aimed to help small and micro businesses affected by COVID-19 to renegotiate certain contracts.

While only having till 26 Feb to negotiate, there were still 493 notices of negotiation online.

372 of them were related to leases or licences for commercial and industrial properties for five years or less.

The remaining notices were related to contracts for the sale of goods and services; rental agreements for commercial equipment and vehicles; and hire-purchase agreements for commercial equipment and vehicles.

Those who hired and rented commercial equipment or vehicles can take up a repayment scheme to have a longer period of time to pay their outstanding loans.

In total, 126 notices were for the above purposes.

Monitoring Current Methods

The Ministry of Law (MinLaw) also introduced the Simplified Insolvency Programme in January.

This provided financially challenged smaller businesses with cheaper and quicker ways to restructure debts or dissolve and move to a different industry.

Meanwhile, we can’t bring in all of this without mentioning the Monetary Authority of Singapore (MAS).

MAS has been working with banks and finance companies to allow affected and eligible persons to defer their property loan repayments last year.

Mr Tong also says that MinLaw will monitor and modify existing measures if needed.

Needs and times will change too, after all.

He believes Singapore’s Government will react quickly to a crisis, due to the system of governance.

Let’s just hope nothing as big as COVID-19 will happen again soon, or at all.

Feature Image: Casper1774 Studio/ Shutterstock.com

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Ashley Seek
[email protected]