Relief periods under Covid-19 (Temporary Measures) Act 2020 extended for built environment sector, framework allowing developers to extend date of delivery of possession to be refined

28 April 2021

On 19 April 2021, the Covid-19 (Temporary Measures) (Amendment No. 2) Act 2021 (“Amendment Act”) was gazetted to extend the relief periods under the Covid-19 (Temporary Measures) Act 2020 (“Act”) for specified categories of contracts relating to the built environment (“BE”) sector, and to better administer the upcoming Part 8C of the Act, which provides for the extension of the date of delivery of possession provided in eligible agreements for the sale and purchase of property. The extension of the relief periods under the Act took effect on the same day

This development comes amid continued pressures faced by firms in the built environment sector due to the Covid-19 situation. In his Second Reading Speech on the Covid-19 (Temporary Measures) (Amendment No. 2) Bill delivered on 5 April 2021, Minister of State Tan Kiat How noted that construction projects have to manage with lower productivity on-site due to safe management measures. In addition, labour costs have increased due to restrictions in the inflow of migrant workers.

Extension of relief periods under Part 2 and Part 8B of the Act

With the coming into force of the Covid-19 (Temporary Measures) (Extension of Prescribed Period) (No. 2) Order 2021, the period of relief provided under the Act has been extended as follows.

Part 2 of the Act

Part 2 of the Act provides temporary relief for a prescribed period, upon service of a notification for relief, from stipulated types of legal and enforcement actions in relation to the inability to perform contractual obligations due to Covid-19.

The relief period for construction contracts or supply contracts, or any performance bond granted thereto, has been extended for an additional six months, up to 30 September 2021. This will allow construction firms affected by Covid-19 to seek temporary relief from legal and enforcement action.

The relief period for options to purchase, and sale and purchase agreements, has been extended for an additional three months, up to 30 June 2021. This will assist purchasers of residential, commercial and industrial properties who require more time to make their payments.

Part 8B of the Act

Part 8B of the Act requires the co-sharing of additional non-manpower-related qualifying costs between contracting parties due to delays caused by Covid-19.

The cost-sharing relief period has been extended for an additional six months, up to 30 September 2021. Contractors who incur additional costs as a result of delays from Covid-19 would benefit from this extension.

However, the co-sharing percentage remains at 50% of the qualifying costs, and is subject to a monthly cap of 0.2% of contract sum per month, and a total 1.8% of the contract sum.

Amendments to Part 8C of the Act

The Amendment Act also introduces changes to the new Part 8C of the Act, which is expected to come into operation in the coming months. Part 8C of the Act provides for the extension of the date of delivery of possession provided in eligible agreements for the sale and purchase of housing, commercial or industrial property. Developers who need relief of more than 122 days can apply to an assessor for a determination of the length of construction delay that is caused by Covid-19. Where the developer has extended the date of delivery of possession, purchasers may seek reimbursement from the developer for certain out-of-pocket expenses incurred due to the delay in delivery of the unit, up to a specified cap.

The changes to Part 8C of the Act introduced by the Amendment Act include the following:

Providing for the different ways in which the purchaser may claim and obtain reimbursement of qualifying costs.
Empowering the Registrar of assessors to extend the period within which a person is required under Part 8C to do anything.
Providing that the Minister is to appoint one or more authorised nominating bodies, for the purpose of providing assessors to hear and determine applications. As Part 8C of the Act is expected to be operational for a few years, allowing authorised nominating bodies to appoint assessors who satisfy the requirements prescribed will facilitate a more efficient management of personnel turnover.

Reference materials

The following materials are available on Singapore Statutes Online sso.agc.gov.sg:

The following materials are available on the Ministry of National Development website www.mnd.gov.sg and the Building and Construction Authority (“BCA”) website www.bca.gov.sg: