COVID-19 Temporary Measures (Amendment No. 2) Bill

(6 min) Mr Louis Ng Kok Kwang (Nee Soon): Mr Louis Ng Kok Kwang (Nee Soon): Sir, I stand in support of the Bill. I thank the Ministry for the rental relief afforded to many tenants and sub-tenants under the Act. It has, indeed, been a lifeline for many SMEs in these difficult economic times. I just have a few quick clarifications to seek.

On my recent market walkabouts, I found that some sub-tenants, especially coffeeshop stallholders, are not benefiting from the rental relief framework. They are not aware of the laws that have been passed and the rental relief they can get. It is good that eligible tenants and sub-tenants do not need to do anything and, instead, the landlords are obliged to notify their tenants of the rental relief. However, I understand that some landlords are not notifying their tenants and some tenants are also not notifying their sub-tenants.

In addition, some coffeeshop stallholders in Nee Soon East are aware of the rental relief but did not know that it was for four months. Some only got one month of relief. They also do not know where to seek recourse. Not requiring eligible tenants and sub-tenants again to take any further steps to obtain rental relief is a well-intentioned measure. However, it may be a double-edged sword if it is not accompanied by proactive communication and enforcement of the relief measures to tenants and sub-tenants.

We need to take a more proactive approach to ensure that the rental relief is reaching those who need this lifeline the most.

Sir, I have four clarifications.

First, can the Minister share how many complaints the Ministry has received with regard to landlords or tenants not providing the two months of rental relief that is supported by the Government to tenants and sub-tenants respectively?

Second, what percentage of these complaints are resolved with the rental relief being subsequently provided to the tenants and sub-tenants respectively?

Third, as some tenants and sub-tenants, especially again the coffeeshop stallholders, still appear to be unaware of their rental relief rights under this framework, can the Minister share if a more comprehensive communication mechanism could be put in place urgently to inform eligible tenants and sub-tenants of such reliefs? If not, can landlords and tenants be made responsible to show evidence that they have informed their tenants or sub-tenants respectively of their rental reliefs?

Fourth, given the additional rights of the assessor to vary the relief amounts pursuant to this new Bill, can the Minister share what safeguards will be put in place to ensure that tenants and sub-tenants have sufficient clarity from the outset of the rental relief and amounts that they should be entitled to? Similar to my earlier point, how will MinLaw be communicating this to the tenants and sub-tenants?

Sir, notwithstanding these clarifications, I stand in support of the Bill.

Response from Mr Edwin Tong Chun Fai: Mr Deputy Speaker, I thank the Members for their support of this Bill and I will just very quickly jump into the questions that have been raised and deal with them directly.

Mr Murali Pillai asked how many assessors have been appointed and what steps have been taken to ensure that they perform their duties well and how are they trained for that.

As of 4 September 2020, a total of 298 assessors have been appointed to the PACT Registry and the rental relief panel. As I have explained earlier, we do have regular discussions with them – myself, Minister Shanmugam and also the MinLaw officers. In that way, we keep a parity and we ensure that the decisions are also consistent with each other across the different panels.

There are 12 panels and each of them is headed by a senior District Judge from the State Courts. That is how the cases are administered.

The MinLaw team also conducts daily check-in sessions with the PACT Registry to provide guidance on the cases filed. So, not only on the cases that have been looked at or assessed, but the cases filed, to get a sense as to whether or not there needs to be improvement to the way in which we administer and operationalise the way in which the registry functions.

Mr Murali Pillai also asked whether there have been plans to extend the moratorium order under the current Act, which is due to expire on 19 October 2020 and how such a possible extension might be balanced against the interests of both parties.

In answering the second question, first, we have to bear in mind that, as I have said, it is intrusive to step in to intervene into parties' contracts. So, we do that judiciously and we always have to keep an eye on whether or not it is appropriate, what is the right level of intervention and whether, in the first place, the circumstances require that intervention.

So, we will monitor that carefully to make an assessment based on prevailing circumstances, whether that is still necessary. But I just want to cite, for the Member's information, that we have seen a general downward trend in the number of Notifications For Reliefs that have been filed. From July to August, compared to May and June, we have seen a downward trend. This suggests to us that either the number of cases has been coming down in terms of the disputes or, as I have postulated at the start, the cases have come down partly also because there is not even a need to file an NFR, given that the framework has become a little bit better socialised to the public and people know what the framework provides for and, therefore, can negotiate on their own accord outside of the NFR regime altogether.

So, we will monitor that, together with the prevailing circumstances, to assess whether or not we need to extend the moratorium.

Mr Murali Pillai also asked about the total value of the rental rebate that the commercial, industrial and office tenants have received and what is the estimated additional rental rebate.

The Government's assistance for the rental relief component comprises both the property tax rebate for 2020 and also the cash grant from the Government. The property tax rebate for the 2020 period amounts to about $1.8 billion and the cash grant component, as announced by Deputy Prime Minister Heng at the Fortitude Budget, is about $2 billion. So, in total, these are the two components which make up the grants given in respect of the rental relief framework.

It is worth noting that both components of the Government support are calculated based on the annual value of the property and that might not exactly be the same amount of the rental waivers that individual landlords provide. As I have mentioned earlier, the annual value is the approximated annual return that the property is expected to fetch. But what the market or what the landlord might get out of that particular property might well be different. So, there is that possibility of discrepancy. And the other, of course, is the waivers are only in respect of the base rent or contractual rent and not the service and utility charges.

Mr Louis Ng raised several concerns in his usual quickfire fashion and I will try and replicate a quickfire response.

First, on the construct of the scheme and whether tenants are aware or not aware, and whether it is easy to use. We did receive some feedback that in having to pass down the property tax rebate from the Government to landlord, landlord to tenants, there might be some friction in that process, which is why this scheme that we have designed that was passed in June does not rely on that "passing the parcel" as it were, but simply by way of notification from IRAS. Once that notification kicks in, then it applies by way of waivers. So, it is not so much what you have to pass down but rather what the tenants do not have to pay for the relevant period. So, it is deliberately designed in this way to ensure that, as far as possible, no active step needs to be taken by the tenant.

Second, Mr Louis Ng asked what if landlords are either slow or failed to inform their tenants. We have a framework that is set in place. Mr Louis Ng will know from the Act, it mandates the landlord to pass a copy of the notice to tenants within four working days. We have prescribed that but, obviously, there are also roughness at the edges – some might not know that they have received it, some might be unable to find their tenant for a period of time. They may not be operating their business and so on. So, we understand that and all that is taken into account.

But there is a default framework that applies absent anything else. So four days to pass down the notice. And after the notice of cash grant is received by the property owner, he is also required by law to pass a copy to his tenant and the framework is designed, as I mentioned earlier, in this case, once you receive the notice, then the waivers will kick in.

Finally, Mr Louis Ng also raised the point about information and education. I think it is a highly relevant point. The whole idea is for people to understand what the framework provides for and to be able to use the framework in a way which applies to them. We have put up the usual infographics, we have explained it as best as we can, we have also taken to having a dedicated website just to explain this and put all the materials at one place. Both Minister Shanmugam and myself have conducted several webinars and sessions, in some cases, face-to-face, some cases on online portals to explain this to people who then pass on the information. For example, we have sat down with several merchants associations and federations so that they in turn can pass down the information to their members and in that way disseminate it. So, we try as best as we can to plug into these networks and try and explain and give information.

We have also used community means, through organisations on the ground, using business associations, giving them the materials. And, ultimately, if they do have questions after all of this, we do have a team; it has been highly stretched but we do have a team that sits and takes calls and explains and also walks through the process. Later on, when I address Ms Lim's points about timing and about not being too strict, I will also explain further what else our officers do to assist in this programme.

Mr Murali Pillai asked about some landlords who may have financial difficulty and may face difficulties themselves. Let me first explain the operation of the waiver system.

The Government puts up the first one or two months, depending on whether it is industrial/office or commercial property. So, one month for industrial/office and two months for commercial. The tenants will enjoy a further additional rental relief of one or two months correspondingly, if they are able to demonstrate a 35% drop in revenue in the comparable period; and absent anything else it will be April and May 2019 against April and May 2020. You compare that and if you have a 35% drop, the additional relief kicks in. It is only the additional relief that the landlords are obliged to bear.

In the scenario where you might find a retiree landlord or a small landlord whose annual takings from rental income is a substantial portion of the annual income – 75% in this case – then that person can also apply for relief. The qualifier there is as long as you do not hold properties where the annual value is more than $60,000. We fix it at 60,000 because that is the median annual value of commercial properties in Singapore.

Based on these numbers, we expect that it does cover a fair number and if one is holding to the properties that exceeds the median annual value of commercial properties in Singapore, then you might not qualify or you would not qualify for the scheme.

I would not say it captures everyone, but by and large in hardship cases, you are likely to fall within this framework, you will get the relief from the Assessors and the landlords, those who think that they can qualify, should apply for assessment by the Assessors.

On top of that, as we have explained, and as Mr Shanmugam explained when this Bill was introduced in June, there are also other softer measures, such as the bank loans and forbearance and other measures that working through MAS, the banks have offered.

Ms Sylvia Lim asked about process timing and whether parties who filed appeals or filed applications out of time, whether or not that would be taken against them. The short answer is absolutely not. We look at the substance of the case and the merits of the case. The Registrar has a discretion to accept applications out of time and will do so as long as there is merit in the application, there is good reason and it is not a frivolous reason.

In addition our officers also often receive requests for clarification, either on the phone or in person or online. On occasion our officers also proactively assist the applicants in form filling or in explaining the process and procedure so that they will be able to have their applications either for rental relief or for landlords' additional relief to be heard by the Assessors.

So, I wish to assure Ms Sylvia Lim that this is being done already and if she is aware of any other cases which fall through the cracks, which require assistance, please do reach out to us and we will assist.

Mr Vikram Nair asked some questions about SOPA – about the timing and the cash flow. We understand that SOPA is really designed to ensure that there is security of payment and cash flow is critical in the industry. The provisions in this Bill do not affect the timeline in SOPA. All we are saying is as long as you have got an application for determination filed under Part 8 of this Act, then do not duplicate the process by also asking for relief in SOPA and I think that is a fair position to take. You do not get two bites at the cherry for relief.

As far as guidelines are concerned for Assessors and adjudicators, the same briefings, the same guidance we give to the current Assessors, we will also give to the SOPA adjudicators. Those who are given the same ambit of powers of discussion as the current PACT Assessors, they will also be given the same guidance.

Finally, on alternative meeting arrangements, I thank the various Members. Mr Vikram Nair spoke about it, Mr Zhulkarnain also spoke about it and I think the proof of the pudding is in the eating. I think if you are asking for this on a permanent basis, it cannot be quite a bad thing. So, I thank the Members for that. I just want to point out that actually under the Companies Act, as long as the constitutional documents or the memorandum and articles of the company or the relevant organisation, provides for it, then you can, in fact, already hold your meetings in a non-physical manner. There needs to be some compliance with the Companies Act and different companies or different societies may have slightly different obligations to fulfil. But by and large the scheme is there, the regime is there. If you are able to take advantage of it because your own constitution allows for it, then you can do so.

For the moment, our intention as I mentioned is to give certainty to companies who are planning for the year-end AGMs, some as far as six months down the road and we want them to know that they will be covered by the alternative arrangements. They can continue to make those arrangements and beyond that we will make an assessment. For the long term, we will study it and if this is something that is useful and workable, we will consider whether or not and to what extent we can incorporate that into a more permanent position.

Sir, I think I have touched on all the questions and I wish to end by thanking Members for speaking despite this being late in the day at the end of a long week of debate. I thank you very much for your support and I look forward also to your continued support as we continue to refine the COIVD-19 (Temporary Measures) Bill. These are steps that we gather as we encounter situations on the ground and we react to it by introducing amendments from time to time to this Bill. I thank you all very much and I beg to move, Mr Deputy Speaker.

Source: Hansard