Many small and medium sized enterprises (SMEs) are hit with a myriad of issues to deal with because of the pandemic. This includes rent and the bleak economic situation. Whilst some landlords are offering help to their tenants, there are others who have not. To aid these businesses, the Parliament passed a law on 5 June 2020.
Minister of Law, Mr K.Shanmugam announced that the new law will be based on fair sharing of rental obligations amongst landlords, tenants and the Government. He stated that all Singaporeans have a vested interest in SMEs doing well. If the Government does not intervene, it will set off a chain reaction. SMEs depend heavily on cashflow and if this becomes an issue and they are unable to stay afloat, there will be a lot of jobs lost and the economy will suffer. In this circumstance, the value of the property will in turn take a dip and this will affect the landlords.
The new legislation will propose waiver of rental for SMEs who have had a 35 per cent or more drop in average monthly revenue in April and May. For eligible SMEs in the food and beverage and commercial industries, they will be given four months rental waiver (from April to July), which encompasses two months from the Government and two months from the Landlord. For eligible SMEs in the office and industrial sectors, they will be given two months rental waiver (from April to May), with one month from the Government and one month from the Landlord.
Mr Shanmugam stated that this rental waiver mandated by law is a “lifeline”, however business conditions will be rough and it is only the fit that will survive even with this relief.