Most seek relief from property lease, licence agreements

Of 6,587 notices submitted, only about 1 in 6 ended up in dispute

The vast majority of those who sought relief from their contractual obligations, under laws passed earlier this year, did so regarding property leasing and licensing agreements, as well as hire-purchase and conditional sales agreements for commercial vehicles, or plant or machinery for commercial purposes.

According to figures released by the Ministry of Law (MinLaw), as at Aug 5, 6,587 notices had been submitted online via FormSG by individuals and businesses seeking a six-month legal reprieve from their contractual obligations.

Nearly 80 per cent of those were related to leases and licences of commercial and industrial property.

But only about one in six notices served ended up in dispute.

Event-and tourism-related contracts and non-residential property leases and licences made up the bulk of the disputes.

In April, Parliament passed laws under the Covid-19 (Temporary Measures) Act to allow individuals and businesses to seek reprieve from their contractual obligations for six months.

These included rental payments for commercial and industrial properties, construction and supply contracts, as well as certain secured loan facilities granted by a bank or finance company to small and medium-sized companies.

Contracts for events such as weddings or conferences, as well as cruise and hotel bookings, are also covered under the Act. Certain hire-purchase agreements, such as vehicle loans taken out by private-hire drivers, are also covered.

Only contractual obligations that are to be performed on or after Feb 1 and contracts that were entered into before March 25 are covered under the Act. The six-month relief period starts from April 20 and ends on Oct 19. The Act allows the Minister for Law to extend the relief period by another six months, if deemed necessary.

If parties raise a dispute over the notification for relief, they can seek help from MinLaw, which will then appoint an assessor to decide if the party's inability to perform contractual obligations was due to Covid-19.

Most notifications for relief have been for contracts covering leases and licences of non-residential property, with 2,518 notifications for relief submitted.

The second most common area was for contracts covering hire-purchase and conditional sales agreements for commercial vehicles, or plant or machinery for commercial purposes, with 2,500 notifications for relief submitted.

This was followed by contracts covering the construction or supply sector with 520 notifications for relief, and event-and tourism-related contracts at 517 notifications.

Contracts covering the leases or rental agreements for commercial equipment or commercial vehicles saw 279 notifications for relief, while those contracts covering options to purchase and sale and purchase agreements with housing developers saw 38 notifications.

These last two contract types were added to the list of scheduled contracts covered under the Act on June 20 and May 13 respectively.

MinLaw said it has received 1,094 applications for an assessor's determination as at Aug 5.

Nearly three in five of these applications have concluded, with 225 determinations issued covering most categories of contracts covered under the Act and 422 applications either being withdrawn by parties after resolving the matter or rejected by the Registry of the Panel of Assessors.

Of the remaining 447 applications pending, nearly half involve the leases and licences of non-residential property, with 200 cases, while event-and tourism-related contracts make up 149 cases.

A spokesman for MinLaw said hearings for the assessor's determination are held once the Registrar is satisfied that the applicant has submitted the necessary documents, and the respondent has submitted a response to the Registrar and served the response to the applicant and relevant parties.

The spokesman said parties need to apply for a determination only if they have a dispute that they are unable to work out themselves.

"We encourage parties to be fair and considerate to each other, given how Covid-19 was unexpected and how it would be more beneficial for the parties' relationship to reach a mutually agreeable solution," said the spokesman.

Correction note: This article has been edited for accuracy.

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A version of this article appeared in the print edition of The Straits Times on August 17, 2020, with the headline Most seek relief from property lease, licence agreements. Subscribe