Leases for commercial equipment, vehicles to be covered by temporary relief law

FROM June 20, leases or rental agreements for commercial equipment or commercial vehicles will be covered by laws that provide temporary relief where contractual obligations cannot be fulfilled due to Covid-19, said the Ministry of Law on Friday.

These join several other categories of contracts already covered by the Covid-19 (Temporary Measures) Act passed on April 7, such as leases and licences for non-residential property and event- or tourism-related contracts.

With this move, renters of commercial equipment or vehicles who cannot fulfill their contractual obligations - paying of rental, for example - due to Covid-19 will be able to obtain temporary relief from specified types of legal action, including commencing or continuing legal action, and repossession. This relief will be applicable until Oct 19, 2020, which is the prescribed period under the Act.

New subsidiary legislation taking effect on June 20 will extend the Act's coverage to include rental agreements for plant, machinery or fixed assets in Singapore used for manufacturing, production or other business purposes; coverage will also include commercial vehicles, excluding taxis and private-hire cars.

As with other contracts covered by the Act, these rental agreements must have been entered into before March 25, 2020, with contractual performance - such as payment of rental - due on or after Feb 1, 2020.

"We encourage renters who are unable to fulfil their contractual obligations due to Covid-19 to first discuss with the rental company and try to reach a mutual agreement," said the Ministry of Law. If agreement cannot be reached, the renter may serve a Notification for Relief on the rental company, which will then prevent the rental company from taking certain legal actions.

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If parties are still unable to reach a compromise, either party may apply for an Assessor's determination.

Some clarificatory amendments to the Act will also come into force on June 20, including the clarification that all proceedings before an Assessor are confidential.