FAQs on Rental Waiver Framework 2021
FAQs on Rental Waiver Framework 2021
General
Rental Waiver Obligations
Eligibility
Service Requirement
Assessment by a rental waiver assessor
Dispute Resolution
Intermediary Landlords
Others
General ↩
Q1. Why has the Government decided to implement the Rental Waiver Framework?
Q2. Now that the Rental Waiver Framework has come into force, what should I expect next?
Q1. Why has the Government decided to implement the Rental Waiver Framework?
The Rental Waiver Framework (RWF) complements the suite of support measures introduced by the Ministry of Finance to alleviate the economic impact on businesses due to the Phase 2 (Heightened Alert) [P2(HA)] periods.
To ensure a fair sharing of rental obligations over the P2(HA) periods between the Government, landlords and tenants, landlords are mandated to provide 2 weeks of rental waiver of gross rent under the RWF to eligible tenants.
Taken together with the Rental Support Scheme (RSS) cash payouts, eligible tenants in qualifying privately owned commercial properties will benefit from a total of 1.5 months of rental support.
Q2. Now that the Rental Waiver Framework has come into force, what should I expect next?
[For tenants]
You can expect to receive a Notice of Rental Waiver (Notice) from the Ministry of Law from 6 October 2021, especially if you have received one or more payouts under the Rental Support Scheme (RSS) administered by IRAS.
It is important to note that receipt of the Notice does not automatically qualify you for rental waiver from your landlord.
Upon receiving the Notice, you should first assess if you meet all the eligibility criteria here.
If you determine that you meet all the eligibility criteria, you will have to take the necessary steps as set out in the Notice, within the specified timeline, to obtain the rental waiver.
You may not receive the Notice if you rent only part of a property or a mixed-use property (e.g. a shophouse for both retail and residential use), and/or are a licensee.
If you assess that you are eligible for the rental waiver under the RWF but have not received the second RSS payout and Notice by 15 October 2021, you should make an application for the second RSS payout through IRAS’s eligibility checker before 12 November 2021. If you have not received the Notice but have already made an application for the second RSS payout, please wait for the outcome of your application; you do not need to take any further action until you receive the Notice.
[For landlords]
Your tenant may receive a Notice of Rental Waiver (Notice) from the Ministry of Law from 6 October 2021, especially if your tenant has received one or more payouts under the Rental Support Scheme (RSS) administered by IRAS.
Upon receipt of the Notice, your tenant will have to assess if he/she is meets the eligibility criteria to receive the rental waiver from you. If your tenant determines that he/she is eligible, he/she will have to serve a copy of the Notice and relevant supporting documents to you.
If you are the property owner and have received the Notice and the other documents from your tenant, you are required to provide the rental waiver as set out in the Notice to your tenant.
If you are a landlord and have received the Notice and the other supporting documents from your tenant, but are not the property owner (i.e. you are subletting the property as an intermediary landlord):
- You are required to provide the rental waiver as set out in the Notice to your tenant.
- As an intermediary landlord, you will also be eligible for the same amount of rental waiver from your landlord, up to a cap of 2 weeks of your own gross rent. To obtain the rental waiver from your landlord, please follow the instructions for service applicable to an intermediary landlord as set out in the Notice.
Prior to receiving the Notice of Rental Waiver, tenants should continue to honour their existing contractual obligations.
Rental Waiver Obligations ↩
Q5. Why are service and maintenance charges included in the rental waivers?
The 2 weeks of rental waiver will be based on gross rent. Gross rent is what is agreed on under the lease agreement or licence, and will include gross turnover rent, maintenance fees and service charges.
Q5. Why are service and maintenance charges included in the rental waivers?
As the gross rent is most reflective of the actual rental expenses that businesses incur, the Government had provided 1 month of gross rent cash payout under the Rental Support Scheme. For consistency, the Rental Waiver Framework will also be based on gross rent.
Generally, landlords may offset any direct monetary assistance or rental waivers provided to their tenants from 16 May 2021 up to the date the landlord receives all of the tenant’s supporting documents (both dates inclusive).
The landlord must provide any remaining rental waiver after offsetting the assistance and/or waivers as detailed above.
Only direct monetary assistance or rental waivers to the tenant may be offset.
Eligibility ↩
Q8. How are qualifying commercial properties defined?
Q18. What does it mean to be a part of a “Singapore group of entities”?
Types of Properties
Q8. How are qualifying commercial properties defined?
Examples of qualifying commercial uses include shops, restaurants, cinemas or theatres, schools, etc. The full list may be found here.
The Rental Waiver Framework is intended to provide support to businesses that have been impacted by the tightened safe management measures during the Phase 2 (Heightened Alert) [P2(HA)].
Commercial businesses have been particularly affected due to lower footfall during this period. In contrast, industrial tenants were generally allowed to continue with operations during P2(HA). Similarly, most office tenants could continue operations with their staff working from home.
SME/NPO
The framework provides the rental waiver to selected NPOs that are deemed to benefit businesses, the society or community at large, to also give them time and support to recover from the impact of Phase 2 (Heightened Alert). These NPOs will also be subject to similar criteria as businesses/SMEs.
Lease Eligibility
20 July 2021 was the date when the second Phase 2 (Heightened Alert) was announced. Tenants who entered into rental agreements after the announcement should have been aware of the risks and potential impact of the latest round of tightening measures.
Only tenants who were impacted during both Phase 2 (Heightened Alert) [P2(HA)] periods, i.e. their average monthly revenue must have dropped by 20% or more during both P2(HA) periods compared to the Phase 3 period, are eligible for the rental waiver. If a business was able to make a significant recovery after the partial relaxation of restrictions from 10 August 2021, it would not be eligible for rental waiver from the landlord.
Revenue Drop
The average monthly revenue can be calculated by summing up the total revenue for the relevant periods and dividing this by the number of days in each period, then multiplying it by 30 days. For example, for both periods of 16 May to 13 Jun 2021 and 22 Jul to 18 Aug 2021, the total revenue across both periods should be aggregated, divided by the 57 days in these periods, then multiplied by 30.
As far as possible, the profit and loss statements which tenants provide to their landlords for the purposes of the Rental Waiver Framework should reflect the actual revenue during the following periods:
- 16 May to 13 June 2021;
- 22 July to 18 August 2021; and
- 28 December 2020 to 7 May 2021.
In the instance where a business is only able to record revenue on a monthly basis (e.g. collection of revenue is on a monthly basis), and it is not possible to delineate the revenue for the relevant periods cleanly, a pro-ration can be carried out based on the average daily revenue for the relevant month. For example, for both periods of 16 May to 13 Jun 2021 and 22 Jul to 18 Aug 2021:
- The average daily revenue for May 2021 can be applied to the period of 16 to 31 May 2021
- The average daily revenue for Jun 2021 can be applied to the period of 1 to 13 Jun 2021;
- The average daily revenue for Jul 2021 can be applied to the period of 22 to 31 Jul 2021; and
- The average daily revenue for Aug 2021 can be applied to the period of 1 to 18 Aug 2021.
The total revenue for these periods can then be aggregated and divided by the 57 days across the entire period, then multiplied by 30 days.
The Rental Waiver Framework is intended to assist Small and Medium Enterprises (SMEs) and specified Non-Profit Organisations (NPOs) affected by the tightened safe management measures during the Phase 2 (Heightened Alert) [P2(HA)] periods.
Hence, the preceding period, i.e. Phase 3, is used as the base period for assessing the drop in revenue.
If your business commenced after 28 December 2020, the drop in average monthly revenue will be calculated by comparing both Phase 2 (Heightened Alert) periods (16 May 2021 to 13 June 2021 and 22 July 2021 to 18 August 2021) to the period from the business commencement date to 15 May 2021 (both dates inclusive).
Tenant-occupiers who commenced business on or after 16 May 2021 are not eligible for the Rental Waiver Framework, as it would not be possible to ascertain that your revenue had been impacted by the restrictions during the Phase 2 (Heightened Alert) periods.
Your business may nevertheless be eligible for the first tranche of the Rental Support Scheme (RSS) if your lease was signed before 14 May 2021 and was in force any time between 14 to 29 May 2021. You may also be eligible for the second tranche of the RSS if your lease was signed before 20 July 2021 and was in force any time between 22 July to 18 August 2021.
Group SME
Q18. What does it mean to be a part of a “Singapore group of entities”?
If your business is not part of any group of companies, this does not apply to you.
“Singapore group of entities” refers to a group of entities that are incorporated or established in Singapore and related to each other through ownership or control in such a way that the group is either required to prepare consolidated financial statements for financial reporting purposes (i) under FRS 110 or an equivalent accounting standard or (ii) due to equity interests in any of the entities were traded on any stock exchange in Singapore.
If the business is a member of a Singapore group of entities in the period 5 to 18 August 2021, the group’s annual revenue must be not more than $100 million for the business to qualify for the rental waiver .
Revenues accounted for outside of Singapore would not be an accurate reflection of the size of the business in Singapore, and their need for rental waiver as a result of the Phase 2 (Heightened Alert) restrictions.
Service Requirement ↩
Q20. What if I do not have the necessary supporting documents?
Q22. What are profit and loss statements?
Q20. What if I do not have the necessary supporting documents?
If you do not have the necessary profit and loss statements required for determining the revenue drop for your business at the subject location, you must provide a copy of a Statutory Declaration attesting that you meet the relevant eligibility criteria in Section 1 of the Declaration Form (of the Notice of Rental Waiver).
A statutory declaration made in Singapore must be in the form set out in the First Schedule of the Oaths and Declarations Act (Cap. 211) and be made before a Commissioner for Oaths, Notary Public or a Justice of the Peace. The following links contain a list of Commissioners/Notaries/Justices, who may be contacted for further assistance: https://go.gov.sg/conp-list/ and https://go.gov.sg/jp-list/.
The timeline of 28 calendar days for complete service of the Notice of Rental Waiver and necessary supporting documents should be strictly adhered to. If you are unable to fulfil this condition, your landlord can make an application to the rental waiver assessors to assess your eligibility on the grounds that you have not complied with the service requirements as set out in the COVID-19 (Temporary Measures) Act. If the rental waiver assessor determines that you did not comply with the service requirements, you may no longer be eligible to receive the rental waiver.
Q22. What are profit and loss statements?
A profit and loss statement is a financial statement that summarises the revenue, costs, and expenses incurred over a specified period.
The standard mode of service is by email or registered post. However, we understand there may be instances where the tenant/intermediary landlord is unable to obtain the email or mailing address of its immediate landlord. Under such circumstances, the tenant/intermediary landlord may serve the necessary documents via internet-based messaging services, like WhatsApp or Telegram.
Nonetheless, you are strongly encouraged to complete service by email to minimise potential disputes on your compliance with the steps in the Notice for Rental Waiver.
If you are unable to produce one or more of the required documents specified in Section 2 of the Declaration Form, you are required to make a Statutory Declaration on your ability to meet the relevant criteria specified in Section 1 of the Declaration Form. However, if you are able to produce all the required statements, you do not need to make a Statutory Declaration.
Assessment by a rental waiver assessor ↩
Q28. What documents must a landlord submit to prove his eligibility for financial hardship?
Where a tenant has assessed that he/she is eligible and has sent a copy of the Notice of Rental Waiver, along with the completed Declaration Form and all necessary supporting documents, to his/her immediate landlord, the landlord cannot unilaterally decide that the tenant is ineligible for the rental waiver. Any adjustment to the landlord’s rental waiver obligations is only made after the assessor has made a determination on the matter.
Your rental waiver continues to apply while you await the outcome of the assessment.
Where a tenant has assessed that he/she is eligible and sent a copy of the Notice of Rental Waiver, along with copies of the completed Declaration Form and all necessary supporting documents to his/her immediate landlord, the landlord cannot unilaterally decide that the tenant is ineligible for rental waiver.
Landlords and tenants are encouraged to work towards a mutual arrangement to implement the rental waiver provided for in the Act.
If the landlord and tenant-occupier are unable to reach an agreement on the tenant’s eligibility, the property owner and/or any intermediary landlord(s) may make an application within 14 calendar days of receiving the Notice of Rental Waiver and necessary supporting documents (or copies of them), to have a rental waiver assessor ascertain whether the tenant-occupier is eligible under the Rental Waiver Framework. Any adjustment to the landlord’s rental waiver obligations is only made after a rental waiver assessor has made a determination on the matter. The rental waiver continues to apply while parties await the outcome of the assessment.
You may visit https://go.gov.sg/rwf2021app for more details on applications for assessment.
Landlords and tenants are encouraged to work towards a mutual arrangement to implement the rental waiver provided for in the Act.
If a landlord and tenant-occupier are unable to reach an agreement on the tenant’s eligibility, the property owner and/or any intermediary landlord(s) may make an application within 14 calendar days of receiving the Notice of Rental Waiver and necessary supporting documents (or copies of them), to have a rental waiver assessor ascertain whether the tenant-occupier is eligible. Any adjustment to the landlord’s rental waiver obligations is only made after a rental waiver assessor has made a determination on the matter. The rental waiver continues to apply while parties await the outcome of the assessment.
You may visit https://go.gov.sg/rwf2021app for more details on applications for assessment.
Q28. What documents must a landlord submit to prove his eligibility for financial hardship?
Applicants applying for assessment on their eligibility for landlord financial hardship will have to provide the documents as specified in the Registrar’s Directives, under the section on Application to Determine if a Landlord is Entitled to be Exempt from Paying the Rental Waiver on the Grounds of Financial Hardship.
You may also refer to https://go.gov.sg/rwf2021app for more details on applications for assessment.
Landlords may submit an application within 14 calendar days of receiving copies of the Notice of Rental Waiver and supporting documents, to have a rental waiver assessor ascertain whether their rental waiver obligation may be offset by the assistance that they had provided. You may visit https://go.gov.sg/rwf2021app for more details on applications for assessment.
Dispute Resolution ↩
Yes. You will be liable for the late payment and interest charge associated with the 2 weeks of rental waiver, if you are subsequently assessed not to be eligible. As such, we urge that you make a careful assessment of your ability to qualify for the Rental Waiver Framework before proceeding with the necessary steps to claim the rental waiver.
Tenants should comply with their contractual obligations prior to receiving the Notice of Rental Waiver, as they may otherwise be subject to enforcement action. We nevertheless encourage landlords and tenants to discuss and find mutually agreeable arrangements, taking into account any rental waiver that the tenant may be eligible to receive.
Intermediary Landlords ↩
If the eligible tenant-occupier rents the property through an intermediary landlord, the intermediary landlord will also receive the same amount of rental waiver from their own immediate landlord, up to a cap of 2 weeks of the gross rent of the intermediary landlord. This applies regardless of whether the intermediary landlord meets the eligibility criteria. An intermediary landlord’s entitlement to rental waivers is solely dependent on the tenant-occupier’s eligibility. To obtain the rental waiver, the intermediary landlord will have to complete the necessary steps set out in the Notice of Rental Waiver within the specified timeline.
An intermediary landlord will be required to provide the full 2 weeks of rental waiver to their tenant. Hence, if the rent which an intermediary landlord collects from his tenant is higher than the rent he pays to his landlord, the intermediary landlord is required to absorb the difference.
Under the Rental Waiver Framework (RWF), the amount of rental waiver to be given to each sub-tenant/ licensee who meets all of the eligibility criteria, will be 2 weeks of their payable rent, i.e. [(14 / 31) x (gross rent payable)].
Where the intermediary landlord has subdivided the property to rent to multiple eligible tenant-occupiers, the rental relief that the property owner has to provide to the master tenant will generally be equivalent to the total rental waiver that the master tenant had granted to eligible sub-tenants but not exceeding 2 weeks of the rent paid by the intermediary landlord to its landlord.
For instance, where the intermediary landlord pays monthly rent of $31,000 to his landlord, the amount of rental waiver he is entitled to from his landlord, in respect of the rental waiver given out to the sub-tenants, is as follows:
- If the total rental waiver given by the intermediary landlord to the subtenants is $10,000, the rental waiver he can claim from his landlord is $10,000;
- If the total rental waiver given by the intermediary landlord to the subtenants is $20,000, as the amount of rental waiver that he is entitled is capped at 2 weeks of his rent, the rental waiver he can claim from his landlord is [(14 / 31) x $31,000]= $14,000; and
- If the total rental waiver given by the intermediary landlord to the subtenants is $30,000, as the amount of rental waiver that he is entitled is capped at 2 weeks of his rent, the rental waiver he can claim from his landlord is $14,000.
Intermediary landlords should require a shorter time for complete service as compared to tenant-occupiers, since they do not need to prepare any additional documents, and are just required to send to their immediate landlord the copies of all the documents received from their tenant.
Others ↩
Q36. What other financial assistance measures are available to landlords?
Q36. What other financial assistance measures are available to landlords?
Banks have committed to provide targeted assistance and restructuring solutions to borrowers.
Landlords that face challenges meeting loan repayments should work with their lenders on suitable relief and restructuring options that are tailored to their circumstances.
Those who need to access additional credit to meet their immediate cashflow needs can either apply for mortgage equity withdrawal loans, or loans under ESG’s Temporary Bridging Loan Programme or Working Capital Loan Scheme.
Please refer to this link to find out more about the relief measures announced by MAS and the financial industry: www.mas.gov.sg/regulation/covid-19/.