Relief period for options to purchase, S&P agreements for property extended to June 30

Construction firms facing difficulty performing their contractual obligations due to the Covid-19 pandemic will have an additional six months of reprieve.
Construction firms facing difficulty performing their contractual obligations due to the Covid-19 pandemic will have an additional six months of reprieve.ST PHOTO: LIM YAOHUI

SINGAPORE - The relief period for options to purchase, and sale and purchase agreements with developers will be extended for an additional three months, up to June 30.

This will help buyers of residential, commercial and industrial properties who require more time to make their payments, following amendments to the Covid-19 Temporary Measures Act, which were passed on Monday (April 5) to provide further reprieve for the built environment sector. The relief measures, which took effect from April 20, 2020, are being extended for the third time.

At the same time, construction firms facing difficulty in performing their contractual obligations due to the Covid-19 pandemic will have an additional six months of reprieve, up to Sept 30.

Under the Act, firms affected by the pandemic can seek temporary relief from legal and enforcement action. Parties are encouraged to negotiate and resolve their differences in an amicable manner.

The relief period for co-sharing of additional non-manpower-related qualifying costs between contracting parties due to delays caused by Covid-19 is also extended for an additional six months up to Sept 30.

The impact to the built environment sector goes beyond the stakeholders in its value chain and affects other sectors, said Minister of State for National Development Tan Kiat How.

The sector has showed grit and resilience through the Covid-19 crisis and the Government is committed to helping ensure its ecosystem continues to function and does not lose industrial capabilities even as the sector transforms, he added.

Five MPs spoke on the amendments to the Act, acknowledging the aid that these would provide to the hard-hit built environment sector and raising several clarifications on the changes.

Workers' Party MP Sylvia Lim (Aljunied GRC) welcomed a new section added to the Act, which provides that no developer or purchaser may be represented by an advocate and solicitor before an assessor, except with the permission of the assessor.

Such a "no-lawyers-allowed" clause is present in other legislation that aims to provide lower costs and less formal resolution mechanisms, she noted.

But Ms Lim also highlighted that larger corporations could send legally-trained employees to represent the firm, an imbalance of knowledge or power which could lead to an unjust outcome.

In reply, Mr Tan said that the Ministry of National Development (MND) hopes to minimise the need for an assessor's determination in the first place, stressing its objectives of putting in place a simple process for resolving disputes.

Referring to the relief for construction and supply contracts, Mr Louis Ng (Nee Soon GRC) asked what factors were considered before granting a second extension following a previous four-month one, and if the ministry has studied the impact to companies which construction firms have been granted relief from.

He also called for the MND to work with other government ministries to create a temporary scheme where employers can more easily rehire work permit and S pass workers who have been repatriated to their countries in the past year to bolster manpower needs and demands.

Responding, Mr Tan said the MND is working closely with the Ministry of Manpower and Ministry of Health to progressively increase the number of incoming workers to alleviate the labour shortages in the construction industry in a safe manner.

Mr Vikram Nair (Sembawang GRC) raised that payment is the lifeline of the construction sector. Main contractors or those higher up the value chain could be sandwiched as they are required to pay sub-contractors which have completed their work but may not be able to collect their own payments yet due to other uncompleted work.

Developers and main contractors, in turn, could take a more reasonable approach in making payments for partial completion of work to prevent the middle of the value chain from cracking, he suggested.

Mr Tan noted that the Building and Construction Authority monitors payments in the industry closely and receives frequent feedback from key developers and contractors.

"This is also why we need to extend the relief under the Act so firms do not get engaged in long-drawn litigation at this point in time," he said.