Skip to main content




Relief period extended for some contracts, enhancements applied under COVID-19 Act

Relief period extended for some contracts, enhancements applied under COVID-19 Act

Workers are seen at a construction site in Singapore on Sep 28, 2020. (Photo: AFP/Roslan Rahman)

SINGAPORE: Businesses and individuals who are unable to repay loans and fulfil contractual obligations will now have more time to apply for temporary relief against legal and enforcement actions amid the COVID-19 outbreak.

Additionally, property buyers who have entered agreements with developers to purchase commercial and industrial properties will also have an extension in relief period under the COVID-19 (Temporary Measures) Act.

The Ministry of Law (MinLaw) and Ministry of National Development (MND) announced on Monday (Oct 12) that they will extend the relief period for those unable to perform their contractual obligations by one to five months from Oct 19, depending on the category of the contract.

READ: Parliament passes wide-ranging Bill to assist those unable to fulfil contractual obligations due to COVID-19 outbreak

READ: Evictions, deposits for events including weddings to be protected under new Bill to stem COVID-19 fallout

“Given the continued need for safe management measures, many businesses could still use some breathing space to better adjust to the current operating context and consider how they may meet their contractual obligations,” said MinLaw in a media release.

A summary of the changes is as follows:

(Table: Ministry of Law)

The relief period for measures relating to bankruptcy and insolvency remains unchanged and will expire on Oct 19, said MinLaw.   


The extension of relief period will allow parties to “work through their contractual disputes rather than resorting to legal proceedings after the expiry of the extended relief period, which would incur substantial time and costs”, said MinLaw.

Longer extensions have been given to event and tourism-related contracts, construction or supply contracts and agreements to purchase residential, commercial and industrial properties as they “face significant uncertainty due to COVID-19”, it added.

READ: COVID-19: Alternative arrangements for meetings extended until end-June 2021

After the extension ends, the reliefs, which are triggered by a Notification for Relief that has already been served, will cease. 

Following which, parties may commence or resume legal and enforcement action, as provided for in their contracts and in general law, said the ministry.

During this time, companies and individuals will not be able to file Notifications for Relief or Applications for an Assessor’s Determination except for those who fall under three categories: event and tourism-related contracts, options to purchase, and construction or supply contracts.

Under the first two categories, Applications for an Assessor’s Determination may be submitted by Feb 28, 2021, while parties with construction or supply contracts, or any related performance bond may submit the same application by May 31, 2021.

This extension does not apply to sales and purchase agreements for residential, commercial and industrial properties, and all Applications for an Assessor’s Determination must be submitted by Dec 31 this year, said MinLaw.

As of Sep 30, at least 7,400 Notifications for Relief have been served through MinLaw’s electronic system and more than 1,400 Applications for an Assessor’s Determination have been submitted.

At the same time, the repayment scheme for rental arrears under the relief framework has been updated.

The updates are as follows:

(Table: Ministry of Law)


Buyers who enter agreements to purchase commercial and industrial properties from developers can now apply for temporary legal protection should they face difficulties making payments because of the COVID-19 pandemic.

Previously, only contracts for residential properties were covered under the Act.

READ: COVID-19: Legal relief for those who buy homes from developers

MND said on Monday that the move was to “ensure parity in treatment” after receiving feedback from purchasers and developers.

The changes to the Act, which came into effect on Oct 9, will now cover buyers who have entered options to purchase and sale and purchase agreements for commercial and industrial properties.

“Like other contracts covered under the Act, these contracts must have been entered into before Mar 25, 2020, with contractual performance due on or after Feb 1, 2020,” the ministry said.

The buyer can serve a Notification for Relief on the developer, said MND.

In the case of an option to purchase agreement, the developer will be prohibited from withholding or forfeiting any part of the booking fee paid under the agreement during the relief period.

For sales and purchase agreements, the developer will be prohibited from terminating the agreements on the basis of the buyer’s non-payment.

READ: COVID-19: Details set out for parties to get relief from construction delays and contract breaches

A developer may also serve a notification to seek temporary protection from being sued during the relief period, if it is unable to perform any contractual obligations due to COVID-19, MND said.

“Parties are encouraged to discuss and reach a mutual agreement,” said the ministry.

If the parties are unable to reach an agreement even after a Notification for Relief is served, either side may make an Application for an Assessor’s Determination, it added.

“The Assessor will consider both parties’ arguments and will seek to achieve an outcome that is just and equitable in the circumstances.”

Once a Notification for Relief has been served, the developer will not be permitted to “unilaterally increase interest rates or impose new charges on delayed payments” beyond what is provided for in the sale and purchase agreement, said MND.

Late payment interest or charges under the sales and purchase agreement will also be capped at an amount equal to 5 per cent per annum of simple interest, it added.

BOOKMARK THIS: Our comprehensive coverage of the coronavirus outbreak and its developments

Download our app or subscribe to our Telegram channel for the latest updates on the coronavirus outbreak:

Source: CNA/ad(ta)


Also worth reading