Further Extension of Relief Periods under the COVID-19 (Temporary Measures) Act for Specified Categories of Contracts in the Built Environment Sector

Mar 26, 2021

The Built Environment (“BE”) sector has been adversely impacted by COVID-19. In response, the Government has intervened in an unprecedented way, including providing significant financial assistance through a $1.36 billion construction support package, manpower support, and legislative relief through the COVID-19 (Temporary Measures) Act (the “Act”). Our objective is to ensure that no single segment of the BE value chain bears a disproportionate share of the burden due to COVID-19.

While construction works have restarted, challenges for firms persist. Labour cost has increased due to restrictions in the inflow of migrant workers. Firms are also operating at lower capacity due to the need to comply with safe management measures. In this regard, we will continue to support the sector to help firms tide through this period.

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. 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 Government previously announced that the prescribed periods for legislative relief (“relief periods”) under Part 2 and Part 8B of the Act would end on 31 March 2021. 

Given the uncertain outlook of the industry, the Ministry of National Development will be introducing the COVID-19 (Temporary Measures) (Amendment No. 2) Bill 2021 in Parliament on 5 April 2021. If passed by Parliament, the Bill and its accompanying subsidiary legislation will allow the Government to extend the relief periods under Part 2 and Part 8B of the Act in the following manner[1]

(a) Extension of relief period under Part 2 of the Act

(i) The relief period for construction contracts or supply contracts, or any performance bond granted thereto, will be extended for an additional six months, up to 30 September 2021. Construction firms affected by COVID-19 can seek temporary relief from legal and enforcement action.  

During this period, parties are encouraged to negotiate and resolve their differences in an amicable and mutually-beneficial manner. 
(ii) The relief period for Options to Purchase, and Sale and Purchase Agreements, will be extended for an additional three months, up to 30 June 2021[2].  

This will assist purchasers of residential, commercial and industrial properties who require more time to make their payments. Developers and purchasers who are unable to perform any of their contractual obligations are encouraged to negotiate and reach a compromise.  

(b) Extension of relief period under Part 8B of the Act 

(i) The relief period will be extended for an additional six months, up to 30 September 2021. Cost-sharing relief under Part 8B will now apply to qualifying costs, which arise due to delays caused by COVID-19 during the period from 7 April 2020 to 30 September 2021. This extension will allow the industry to stabilise and ride out the lingering impact of the pandemic.

Further details on the processes under the Act can be found at: http://www.mlaw.gov.sg/covid19-relief .

Annex A 
Annex B
[1] The relief period under Part 8 of the Act will remain unchanged, and end on 31 March 2021. Applications for relief under Part 8 must be filed before 31 May 2021.
[2] For the purposes of the relief under the Act, HDB’s agreements for lease (AFLs) will have the same treatment as sale and purchase agreements.