FAQs for Lease or Licence of Non-Residential Property

Lease or licence of non-residential property – Temporary Relief from Contractual Obligations

Important Note: This set of FAQs only addresses questions relating to the temporary relief from contractual obligations under Part 2 of the Act which were originally introduced in April 2020. If you have questions on the rental relief framework for SMEs reliefs under Part 2A of the Act which were introduced in June 2020, please click here for a summary of the rental relief framework.

Important Note: The prescribed period for leases and licences of non-residential property has ended on 19 November 2020. The reliefs described on this page have expired.

General FAQs

1. Does the Act cover residential leases and licences?

• The Act only covers leases and licences of non-residential (e.g. commercial or industrial) property ended on 19 November 2020. The reliefs described on this page has expired.

2. Is a shophouse covered by the Act?

• The commercial component of a shophouse is covered by the Act, while the residential component is not.

3. What reliefs under the Act are applicable to me, the tenant?

• If you are unable to pay your rent due to COVID-19, your landlord cannot take the following actions against you for up to 19 November 2020:

  • Terminate your lease or licence (whether by eviction or otherwise) for your non-residential property on the basis of non-payment of rent.
  • Unilaterally impose new charges, increase charges or interest rates beyond what is provided for in the lease or licence agreement (see FAQ (12) & (13)).
  • Re-enter the premises.
  • Start or continue court proceedings or insolvency proceedings.

4. What must I do to enjoy the reliefs?

• The reliefs under Part 2 of the Act in relation to inability to perform contractual obligations do not take effect automatically.

• If you qualify for the relief, you need to first serve a Notification for Relief on your landlord, using the form at this link (SingPass) or this link (CorpPass).

• Once the Notification for Relief has been served on the landlord, he/she cannot take the above actions in FAQ(3).

5. What kind of obligations does the Act cover? Is it only limited to the payment of rent?

• No, the Act covers all contractual obligations which a party is unable to perform due to COVID-19. These may include the payment of rent, payment of security deposit, or the obligation to vacate the property by a certain time by the tenant. It may also include obligations by the landlord such as the obligation to deliver vacant possession by a stipulated time.

6. How does the Frustrated Contracts Act, and a force majeure clause in the lease or licence agreement interact with the Act?

• The Act does not affect the taking of any action in relation to the Frustrated Contracts Act or a force majeure clause. The Assessors would not determine whether the Frustrated Contracts Act or a force majeure clause applies.
• Where applicable, instead of seeking relief under the Act, a party may instead rely on the doctrine of frustration or relying on a force majeure clause in the contract. Please seek legal advice if you wish to rely on the Frustrated Contracts Act or a force majeure clause.

Specific FAQs

I am a tenant…

7. My lease or licence was entered into after 25 March 2020. Does the Act apply to me?

• The Act does not apply to any lease or licence entered into after 25 March 2020, but does apply to a lease or licence that is:

  • Renewed automatically after 25 March 2020
  • Renewed after 25 March 2020 in the exercise of a right of renewal provided in the lease or licence.

8. My lease or licence ends before 19 November 2020. Does the Act apply to me?

• A lease or licence entered into before 25 March 2020 would be covered by the Act, regardless of when the term of the lease or licence ends.

9. My business suffered a drop in revenue due to COVID-19. Under the Act, must I still continue paying rent?

• Rent (less the rental waiver granted under the rental relief framework for SMEs in Part 2A of the Act) continues to be payable. However, the Act prevents the landlord from terminating the tenancy, evicting the tenant, or commencing or continuing legal action during the relief period (i.e. up to 19 November 2020). This gives the landlord and tenant time to negotiate a mutually acceptable way to deal with the arrears.

• The relief applies only to tenants who can demonstrate that they are unable to pay rent due to COVID-19. It does not allow tenants who are able to pay to avoid paying rent. Tenants who have the ability to pay (even if they suffered a drop in revenue) must continue to pay their rent.

10. I was unable to pay rent that was due before 1 February 2020. Does the Act apply to arrears from before 1 February 2020?

• No, Part 2 of the Act applies only to the inability to pay rent due to COVID-19 from 1 February 2020 onwards. Your landlord is entitled to enforce any contractual rights they have for unpaid rent due before 1 February 2020.

11. I was unable to pay rent due to COVID-19. Should I issue a Notification for Relief or apply for an Assessor’s determination under the Act?

• If you have been affected by COVID-19, and are unable to perform your contractual obligations, we would encourage you to work together with your landlord to reach a mutually acceptable solution. A long-term solution will give all parties a better chance to recover from the impact of COVID-19. Such mutually acceptable solutions can include temporary rent reduction, partial payments, or setting off arrears against the security deposit.

• For both parties, a settlement is preferable to being mired in costly and lengthy legal proceedings.

• If you cannot reach an agreement yet and require protection from legal proceedings, you may serve a Notification for Relief on your landlord, who is then prohibited from taking any of the actions in FAQ(3). This will give you temporary protection up to 19 November 2020.

• For the avoidance of doubt, the rent (less the rental waiver granted under the rental relief framework for SMEs in Part 2A of the Act) continues to accrue in the interim. You are therefore encouraged to use the temporary relief period to work out a solution.

• In the event of a dispute over whether there is an inability to pay rent, or whether that inability is materially caused by COVID-19, either party may make an application to the Assessor, who will seek to achieve an outcome that is just and equitable in the circumstances. Please click on this link for further information on the application process and the relevant forms.

12. Do I have to pay the accrued unpaid rent (and other charges if any) after the 6-month relief period?

• Yes, the unpaid rent (less the rental waiver granted under the rental relief framework for SMEs in Part 2A of the Act) and any other charges such as interest or fees for late payment, if provided for under the contract continue to accrue during the relief period, and may be enforced after the relief period.

• Part 2 of the Act seeks to temporarily prohibit the landlord from enforcing the contract during the relief period.

• This gives the tenant some breathing space without the threat of eviction or litigation to sort out his finances, and time for the landlord and tenant to negotiate and reach a mutually acceptable solution. Parties are encouraged to work out a compromise on the rental arrears and the terms of the tenancy so that they can preserve a longer-term relationship which is beneficial to both parties.

13. Can a landlord charge the tenant interest or other fees for late payment during the relief period, after the tenant serves the Notification for Relief?

• If the agreement provides that the landlord can charge interest or charges (be it for late payment or otherwise), those charges would accrue and can be enforced by the landlord after the relief period.

• However, the landlord may not unilaterally increase the charges payable by the tenant. See FAQ(14).

14. The landlord says that it is exercising its right to increase the late payment interest and other charges under the tenancy. Can it do so?

• Increase any charges or interest rate payable under the lease or licence agreement unless such increase
  (i) is specified in the agreement;
  (ii) is calculated by reference to a formula (e.g. a reference rate) in the agreement;
  (iii) relates to expenses reasonably incurred by the landlord in the ordinary course of business;or
  (iv) is further agreed to by the tenant.

• Impose new charges including late payment charges except with the further agreement of the tenant.

• The table below illustrates when an increase in interest rate or charges, or an imposition of new charges or interest, is or is not permitted.

15. After serving the Notification for Relief, my landlord deducted from the security deposit, even though I did not agree to it. Is my landlord allowed to do that?

• The Act does not prohibit the landlord from deducting rental arrears against the security deposit. Whether the landlord is entitled to do so depends on the terms of the lease.
• You should engage your landlord in negotiations to work out a mutually acceptable agreement on how to deal with rental arrears. We encourage landlords and tenants to be reasonable and to work out a mutually acceptable solution to the contractual issues that have been created by COVID-19.

16. What can I do if my landlord threatens to evict me/terminate my lease or licence after I have served a Notification for Relief?

• After you serve a Notification for Relief in accordance with the Act, it is unlawful and an offence for your landlord to exercise a right of re-entry or to terminate the lease for non-payment of rent, or start court or insolvency proceedings against you.
• We encourage you to reach out to your landlord to confirm that he had received your Notification for Relief, and to commence negotiations with your landlord to reach a mutually acceptable solution.
• If no agreement is reached, and the landlord does not agree that you are entitled to relief under the Act (and wish to proceed with re-entry, termination of the lease, or commencement of court or insolvency proceedings), either party may make an application to the Assessor, who will determine whether the relief is applicable. Please click on this link for further information on the application process and relevant forms.

17. My landlord terminated my lease / evicted me before the Act commenced. Does the Act apply to me?

• Part 2 of the Act commenced on 20 April 2020. It does not apply to terminations or evictions that occurred before that date.

• If you believe that your landlord has breached the terms of the tenancy agreement, please seek legal advice.

18. I was supposed to vacate the property by a certain date after 1 February 2020 (e.g. by 30 April 2020). However, I was unable to do so because of the safe distancing measures. Does the Act assist me?

• If you are unable to carry out your contractual obligation to vacate the property because of the safe distancing measures implemented as a result of COVID-19, we encourage you to approach your landlord to work out a mutually acceptable solution to vacate the property at a safe time and in a safe way in compliance with all safe distancing measures. Both parties should be fair and reasonable.
• If you and your landlord are unable to reach an agreement, and your landlord wishes to enforce your obligation to vacate the property, you may serve a Notification for Relief on your landlord using the form at this link (SingPass) or this link (CorpPass).
• Once the Notification for Relief has been served on the landlord, the reliefs under section 7B of the Act may apply. Please click on this link for further information.

19. I am a tenant and have only interacted with the property agent. I do not know my landlord’s email address or registered address. How do I serve the Notification for Relief?

Service of the Notification for Relief on your landlord:

• If you have your landlord’s email address, please serve the Notification for Relief using the form at this link (SingPass) or this link (CorpPass). If you have been communicating with the property agent, you may wish to ask the property agent for your landlord’s e-mail address. You may also use an e-mail address that your landlord had publicly represented (e.g. on his website) as being his e-mail address, and represented that communications may be sent to him at that e-mail address.
• If you do not have and cannot obtain your landlord’s email address but have previously communicated with your landlord using an internet-based messaging system (e.g. WhatsApp), a messaging system on a website, blog or social media website owned or operated by the landlord, you may download the hard-copy Notification for Relief at this link (if you are serving on behalf of your business or company) or at this link (if you are serving for yourself), and serve it on your landlord via that messaging service.
• If you are unable to carry out service by the modes above, you may download the hard-copy Notification for Relief, and send it to your landlord’s address by prepaid registered post.

Service of the Notification for Relief on the property agent:

• You may serve the Notification for Relief on the property agent only if:
  • You do not have your landlord’s email address and cannot obtain it;
  • You have never communicated with your landlord via an internet-based messaging system (e.g. WhatsApp);
  • You do not have your landlord’s registered address; and
  • If you are certain that the property agent continues to be working for the landlord.
• If you have your property agent’s e-mail address, please serve the Notification for Relief using the form at this link (SingPass) or this link (CorpPass). In Part B of the form, please fill up your landlord’s name and the property agent’s e-mail address. You may use an e-mail address that the property agent had used to communicate with you, or publicly represented to be his e-mail address. The Notification for Relief would be served on the property agent’s e-mail address.
• If you do not have and cannot obtain the property agent’s e-mail address, you can serve the Notification for Relief on the property agent by downloading the hard-copy Notification for Relief at this link (if you are acting on behalf of a business or company) or this link (if you are acting on behalf of yourself), fill it up, and serve it on the property agent via the internet-based messaging service which you normally communicate with the property agent (e.g. WhatsApp).
• Take note that it is possible that the landlord may challenge the service on a property agent, such that service of the Notification for Relief was not properly effected, and relief under the Act does not apply. You are hence encouraged to serve the Notification for Relief on your landlord, if possible.

20. I served the Notification for Relief on my landlord, but did not get any response or acknowledgement from him. What do I do next?

• You may wish to reach out to your landlord to ensure that he received the Notification for Relief, and commence negotiations.
• We encourage landlords and tenants to be reasonable and to work out a mutually acceptable solution to the contractual issues that have been created by COVID-19.

I am a landlord…

21. My tenant served me a Notification for Relief. What do I do next?

• After being served the Notification for Relief, you are prohibited from enforcing the contract during the relief period, which expires after 19 November 2020. You cannot evict or terminate the lease for non-payment of rent, nor can you start or continue court or insolvency proceedings against your tenant.
• We encourage you to negotiate and reach a mutually acceptable solution with your tenant. A compromise on the rental arrears and the terms of the tenancy can preserve a longer-term relationship, which is beneficial for both parties.
• However, if you dispute your tenant’s inability to pay rent, or that the inability is materially caused by COVID-19, and cannot reach a compromise with your tenant, you can make an application to the Assessor, who will seek to achieve an outcome that is just and equitable in the circumstances. Please click on this link for further information on the application process and the relevant forms.

22. I was supposed to deliver vacant possession to an incoming tenant by a certain date after 1 February 2020 (e.g. 30 April 2020). However, I was unable to do so because of the safe distancing measures. Does the Act assist me?

• If you are unable to deliver vacant possession of the property because of the safe distancing measures implemented as a result of COVID-19, we encourage you to approach your incoming tenant to work out a mutually acceptable solution to deliver vacant possession of the property. This may include an agreement on a postponed date where you are able to hand over the property, and a corresponding extension to the term of the lease. Both parties should be fair and reasonable.
• If you and your incoming tenant are unable to reach an agreement, and your incoming tenant indicates that he wishes to enforce his obligation to deliver vacant possession by, for example, commencing legal proceedings against you, you may serve a Notification for Relief on that tenant using the form at this link (SingPass) or this link (CorpPass).
• Once a Notification for Relief has been served, that tenant is prohibited from commencing legal proceedings against the landlord for the relief period from 20 April 2020 to 19 November 2020. Either party may thereafter make an application to the Assessor, who will seek to achieve an outcome that is just and equitable in the circumstances.

23. My tenant verbally told me / e-mailed me / sent me an instant message that he cannot pay rent. Is that a valid Notification for Relief?

• A Notification for Relief under Part 2 of the Act has to be in the prescribed form found on the Ministry of Law’s website. All other forms of notification are not valid for purposes of the Act.

24. My tenant did not serve on me a Notification for Relief. Can I evict or sue my tenant for non-payment of rent?

• A tenant is only entitled to the relief from enforcement under the Act after serving a Notification for Relief on his landlord in accordance with the Act.

25. My tenant served a Notification for Relief on me in relation to a residential property that does not fall within the Act. What do I do next?

• The Notification for Relief has no effect as Part 2 of the Act does not cover leases or licences of residential property.
• Even though the Notification for Relief was served in error, this indicates that your tenant has difficulties meeting his contractual obligations to you under the tenancy. We encourage you to engage with your tenant to work out a mutually acceptable solution to deal with these contractual issues that have been caused by COVID-19.
• If you are unable to reach an agreement with your tenant and wish to dispute the Notification for Relief, you may make an application to the Assessor by following the steps in this link. The Assessor will determine whether relief under the Act applies.

26. In the lease or licence agreement, there is a clause stating that the tenants have to pay the utilities fees / conservancy fees / cleaning fees etc. My tenant served a Notification for Relief on me. Is my tenant obliged to continue paying the utilities fees / conservancy fees / cleaning fees etc.?

• Under Part 2 of the Act, the temporary relief from inability to perform contractual obligations covers all contractual obligations in a lease or licence for a non-residential property which a party is unable to perform due to COVID-19. This includes the tenant’s obligation to pay utilities fees / conservancy fees / cleaning fees etc.
• If your tenant has served a Notification for Relief in accordance with the Act, you are prohibited from enforcing the contractual obligation against the tenant by for example, commencing legal action, exercising your right of re-entry or terminating the lease or licence during the relief period. We encourage you to speak to your tenant and work out a mutually acceptable solution.
• If you are unable to reach an agreement with your tenant and wish to dispute the Notification for Relief, you may make an application to the Assessor by following the steps in this link. The Assessor will seek to achieve an outcome that is just and equitable in the circumstances.

27. The lease expires before 19 November 2020. My tenant served a Notification for Relief on me. Am I obliged to extend the lease beyond the contractually agreed expiry date?

• No. You are not obliged to extend the lease beyond the contractually agreed expiry date.

28. My tenant served me a Notification for Relief and asked for relief under the Act in respect of his rental arrears. I rely on my tenant’s rent to pay for my own expenses such as mortgage payments. What should I do?

• We encourage you to negotiate and reach a mutually acceptable solution with your tenant. You should explain to him your difficulties and see if an agreement can be reached, including on a reduced rental amount for the relief period.
• You should however take note of the mandatory rental waivers for SMEs under Part 2A of the Act.
• If Part 2A does not apply to your tenant, and you are unable to reach a compromise with your tenant, you can make an application to the Assessor by following the steps in this link. The Assessor may make a determination that is just and equitable, taking into consideration various factors including the financial situation of both the tenant and the landlord. You may therefore wish to provide the Assessor with relevant supporting documents of your financial situation including documents showing your expenses.

29. My tenant served me a Notification for Relief. What recourse do I have if at the end of the 6 months, the tenant cannot pay the accrued rent (less the rental waiver granted under the rental relief framework for SMEs), and leaves or winds up?

• We encourage you to negotiate and reach a mutually acceptable solution with your tenant with respect to the rental arrears and the terms of the tenancy before the end of the relief period.
• If you dispute your tenant’s inability to pay rent, or that the inability is materially caused by COVID-19, and cannot reach a compromise with your tenant, you can make an application to the Assessor, who will seek to achieve an outcome that is just and equitable in the circumstances. Please click on this link for further information on the application process and the relevant forms.
• After the relief period, you may take out the enforcement action you are ordinarily entitled to in respect of the agreement, including commencing court or insolvency proceedings.