SINGAPORE – Landlords facing cash-flow constraints as a result of providing relief to tenants under the proposed Covid-19 amendment Bill will get more help with their existing loan commitments as well as with easing their cash-flow needs.
Landlords who are individuals and are current in their loan repayments as of Feb 1 can defer both principal and interest repayment up to Dec 31 if they are required to provide their tenants rental waivers or payment rescheduling.
Those who successfully apply for a reduction in rental waivers on the grounds of financial hardship are also eligible for this relief. Interest will accrue only on the principal amount deferred and no interest will be charged on the deferred interest payments.
These and other new support measures for landlords were announced on Wednesday (June 3) by the Ministry of Finance (MOF), the Monetary Authority of Singapore (MAS), the Inland Revenue Authority of Singapore (Iras) and Enterprise Singapore (ESG).
Individual landlords can opt to extend their loan tenure by up to the corresponding deferment period to ease monthly instalments when they resume regular repayments. Their credit scores will not be affected when they take up payment deferments.
When applying for the relief, individual landlords should submit to their bank and finance company a copy of Iras’ notice of cash grant; the tenancy/lease agreements; and a declaration of the relief to be provided to their tenants. They may apply once Iras begins issuing the cash grant notice in July.
Meanwhile, small and medium-sized enterprise landlords can already apply to defer principal payments on their commercial and industrial property loans. Most of the applications received so far have been approved.
Those that need additional credit to meet their immediate cash flow needs can apply for loans under ESG’s temporary bridging loan programme or working capital loan scheme through their banks and finance companies.
Larger corporate landlords, including real estate investment trusts (Reits) listed on the Singapore Exchange, are encouraged to approach their banks or finance companies to explore funding solutions. Some have requested for payment deferrals or temporary loan covenant waivers, which banks have acceded to.
The Association of Banks in Singapore (ABS) said that banks will work closely to address any loan covenant breaches including debt service covenants and interest service covenants as a result of temporary constraints imposed on landlords by the new Bill.
This includes waiving the breach and/or revising the loan covenants to take account of the current circumstances.
Mrs Ong-Ang Ai Boon, director of ABS, said: “The additional relief measures demonstrate banks’ support for individual landlords who face temporary cash-flow constraints as they accommodate their tenants with rental relief.”
Meanwhile, S-Reits will also have more time to distribute at least 90 per cent of their taxable income derived in FY2020 and FY2021, to qualify for tax transparency treatment.
For taxable income derived in the fiscal year ending in 2020, S-Reits will have until Dec 31, 2021, to distribute them. For taxable income derived in the fiscal year ending in 2021, they will have until Dec 31, 2021, or three months after the end of FY2021, whichever is later, to do so.