Extended relief for commercial and industrial property buyers
By EdgeProp Team
/ EdgeProp Singapore |
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SINGAPORE (EDGEPROP) - Commercial and industrial property buyers have been given temporary relief from legal and enforcement actions in the event they are unable to meet certain contractual obligations as result of Covid-19, according to the (MMinistry of Law inLaw) and the Ministry of National Development (MND) in their respective releases on Oct 12.
The relief under the Covid-19 (Temporary Measures) Act, was extended to commercial and industrial properties, and took effect from Oct 9 (Photo: Samuel Isaac Chua/EdgeProp Singapore)
The relief covers only options to purchase (OTP) and sale and purchase agreements (S&P agreements) for commercial and industrial properties to ensure parity in treatment after MND had considered feedback from purchasers and developers. The relief, which took effect from Oct 9, will expire on Dec 31, 2020.
Homebuyers and residential developers are already covered under the Covid-19 (Temporary Measures) Act. Initially, offered for a six-month period from April 20 to Oct 19, it was later extended to Dec 31. It includes OTP, S&P agreements or agreements for lease with housing developers.
The purchaser may serve a Notification for Relief (NFR) on the developer to enjoy the relief under the Act. The developer is prohibited from withholding or forfeiting any part of the booking fee paid under the OTP during the relief period. The developer is also prohibited from terminating the agreement with owners on the basis of the purchaser’s non-payment.
The relief covers only options to purchase and sale and purchase agreements for commercial and industrial properties (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Likewise, the developer can serve NFR to buyers to seek relief from being sued if they are unable to meet their contractual obligations during the relief period. Under this Act, contracts must have been entered into before March 25, with contractual performance due on or after Feb 1, 2020.
“The extension of the time to file NFRs is expected and is consistent with the changes announced last week,” says Lee Liat Yeang, senior partner in Dentons Rodyk’s Corporate Real Estate practice. “The application of the relief to buyers of commercial and industrial properties purchased from developers is also expected as such buyers are similarly affected by Covid-19 events.”
Judging from his experience, Lee reckons buyers are not likely to trigger NFRs as “most, if not all, developers are reasonable to consider genuine cases of hardship”.
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