Rental Waiver Framework proposed to support businesses impacted by Phase Two (Heightened Alert)
By Timothy Tay
/ EdgeProp Singapore |
According to the Ministry of Law, the framework will ensure the co-sharing of rental obligations over the Phase Two (Heightened Alert) between the government, landlords and eligible tenants.
SINGAPORE (EDGEPROP) - The mandatory rental waiver under Rental Waiver Framework (RWF) is intended to establish a baseline position for the handling of tenants’ rental obligations, says CBRE in a research note on Sept 14.
Ultimately, it is important for both landlords and tenants to work out mutually agreeable arrangements based on their specific circumstances, as challenges tied to COVID-19 are not a one-off but a long-term process, says CBRE.
In addition, CBRE says the rental payouts and waivers this year can be considered to be more equitable and encompassing. Compared to the Rental Relief Framework in 2020, the latest RWF sets a directive for landlords to waive the 0.5 months of rental definitively. In addition, the payouts and waiver took into account gross turnover rent, maintenance fees and service charges, on top of the base rents.
“Overall, the framework helps to ease the cashflow pressure for small and medium enterprises and non-profit organisations, in particular those in the retail sector, which have been hit hardest during the pandemic,” says CBRE.
The latest amendment to the Covid-19 (Temporary Measures) (Amendment No 4) Bill that was introduced in Parliament on Sept 13 provides a Rental Waiver Framework for small and medium enterprises and specified non-profit organisations. If the amended bill is passed, the rental waiver framework is expected to start next month.
According to the Ministry of Law, the framework will ensure the co-sharing of rental obligations over the Phase Two (Heightened Alert) between the government, landlords and eligible tenants. Landlords will be required under the proposed framework to provide a rental waiver of two weeks of gross rent to eligible tenant occupiers.
Together with existing Rental Support Scheme cash payouts by the Ministry of Finance, qualifying tenants in privately owned commercial properties will benefit from a total of about 1.5 months of rental support.
The Rental Support Scheme was announced in May this year and support measures included two cash payouts. The first was disbursed from Aug 6 and the second round will be disbursed next month.
One of the eligibility conditions states that the tenant-occupiers must have suffered at least a 20% drop in average monthly revenue during both Phase Two (Heightened Alert) periods as compared to the Phase Three period. The annual revenue of eligible beneficiaries must also not exceed $100 million in FY2019.
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