Homebuyers facing financial difficulties given more time to make payment

The extension from 31 December to 31 March 2021 seeks to help residential, industrial and commercial property buyers affected by the pandemic.

Residential property buyers who are unable to fulfil their contractual obligations due to COVID-19 have been given another extension to make payment from 31 December to 31 March 2021. 

The extension will also cover industrial and commercial property buyers.

This comes after the Ministry of Law on Monday (16 November) announced that the relief periods for certain contracts under the COVID-19 (Temporary Measures) Act will be further extended.

“The Act allows for parties in seven categories of contracts to obtain temporary relief from certain legal and enforcement actions, if they are unable to perform their contractual obligations because of the pandemic,” said MinLaw. 

The extension of the relief period will help buyers of residential, industrial and commercial properties who need more time to make payments, particularly those who are directly paying developers and have not taken a bank loan.

MinLaw also noted that it will have a minimal impact on the cash flow of developers.

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“It will also allow developers and purchasers to seek temporary protection from being sued during the relief period, if they are unable to perform any contractual obligations due to COVID-19,” added the ministry. 

The deadline for hire-purchase and conditional sales agreements for commercial equipment or commercial vehicles have also been extended to 31 January 2021 from 19 November.

This excludes hire-purchase or conditional agreements entered into with finance companies or banks regulated by the Monetary Authority of Singapore (MAS).

“Under the Re-Align Framework, eligible hirers or renters of commercial equipment or commercial vehicles may take up a repayment scheme to pay outstanding arrears in instalments,” said MinLaw.

To avail of the scheme, the hirer and renter should ensure that the agreement is still in force, while serving notice to all parties to the contract within six weeks of the Re-Align Framework coming into force. 

Suggested read: 4 Financial Tips for Managing Your Property Amid the COVID-19 Crisis

The extension of the relief period will provide hirers and renters, “who have served or need to serve a notification for relief under the Act, the opportunity to take up the Repayment Scheme”.

Meanwhile, the relief period for other contracts will remain unchanged.

“In particular, the relief periods for secured loans to small and medium-sized enterprises and leases and licences of non-residential property will end on 19 November,” said MinLaw. 

This means that parties to such contracts may resume or commence legal and enforcement action after 19 November, as per their contracts and in general law, even when they have been served with a notification for relief prior to such date.

Non-residential property tenants who are eligible under the Re-align Framework can still use the Framework once it comes into effect, even as their lease or licence of non-residential property is terminated following the relief period’s expiry on 19 November. 

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