If you've been keeping up with the news, you might have heard of the Covid-19 (Temporary Measures) Bill.
This draft law seeks to help individuals and companies in Singapore who are finding themselves unable to fulfil contractual obligations because of restrictions imposed in the Covid-19 crisis.
These include, for instance, a restaurant owner who can't pay rent because of a drop in business, or a couple who has to cancel their wedding and risk forfeiting their deposit with a venue.
Landlords and REITs concerned about new bill
Speaking in Parliament on Apr. 7, Law Minister K Shanmugam acknowledged sentiment some landlords have expressed over the new bill.
He said landlords and REITs have written to his ministry, concerned that they are getting the shorter end of the stick.
"They are concerned that this is going to affect their returns, and that the bill is heavily weighted in favour of tenants."
REITAS (REIT Association of Singapore), in particular, issued a press release on Monday (Apr. 6) to register "significant concerns" with the bill, including the fact that deferring rental payments would transfer cashflow problems from tenants to landlords.
Government is "not anti-landlords", but "pain has to be shared"
Clarifying that the government is "not anti-landlords", the minister explained that the government is trying to protect as much of the entire business ecosystem as possible — from the banks, to the landlords to the tenants, and to the consumers.
"We are not anti-landlords. Landlords, REITs have an important, highly valuable economic function. They make the market more efficient."
But consumers and SMEs face the most pain, noted Shanmugam, and if they're not helped, the entire ecosystem would crash.
He had some choice words for landlords who complained as well, appealing to morals, fairness and justice:
"Morally as well, some of this pain has to be shared. Landlords have benefited tremendously from growth, the government's rational policies, good governance, low taxes in Singapore, and fairness and justice requires that they share some of this pain, rather than leaving it to the smallest and the weakest to bear it all."
Shanmugam also reminded everyone that the Ministry of Law will have a panel of assessors to help provide a fair and equitable outcome for both landlords and tenants if both cannot agree on the type of relief that ought to be accorded.
Having said all these, the minister said that most landlords and REITs have been understanding and accept the need for this bill.
"If I may say so, when the whole house, meaning the whole economy, is under threat, we should try not to focus too much on our own individual rooms. We all need to pitch in to save the economy as a whole. I would suggest that there are broader concerns, beyond the rates of return."
Companies urged to make just and equitable decisions
In his speech, Shan also highlighted examples of service providers who were neither helpful nor reasonable.
One man made a booking with an event space provider to hold his daughter's 21st birthday celebration on Apr. 4.
The booking was made in early March and had more than 10 guests. After the safe distancing restrictions were put in place, the man approached the event space provider to seek a refund. However, the provider insisted that per the contract, any postponement can only be done 30 days in advance.
Another couple tried to postpone their June wedding but was told by their wedding planner that it could not be done. The planner even insisted that its obligations would be fulfilled even if the wedding didn't go ahead on the stipulated date.
On the flip side, a group of bridal studios wrote to Shanmugam to highlight their challenges with unreasonable couples who demanded full refunds of their packages.
The bridal studios had provided services for the couples for up to a year before the wedding date, and had even made payment to other suppliers. Returning their deposits in full would lead to cashflow problems for the studios.
These companies, Shanmugam said, had told him that they would be very glad to work out postponements for the couples with no penalties imposed.
"That is a reasonable equitable position," he said, adding that there are different solutions that are possible, including postponing the event (and the deposit is held back) and cancelling the event (with the deposit repaid in full or partially).
The bill does not mandate that deposits be refunded immediately, either:
"If we ask all companies to immediately refund, that could also be serious trouble."
Concluding his speech, Shanmugam reiterated the message that this crisis is one that needs the government and Singaporeans to work together to overcome.
"The essence of this Bill reflects that spirit. If everyone looked after their own narrow self-interest, we will not come through this crisis well.
...
It is also up to each individual Singaporean to have a sense of fairness. We hope that the spirit of SGUnited will underpin the many conversations to be had between contracting parties, on how to move forward from this."
Top image via Gov.sg/YouTube.