Small landlords will be put in unfavourable position: Forum
The writer says the Re-Align Framework will further distress small landlords with mortgage obligations and place them in an unfavourable position.
As the representative of the S.O.S Small Owners Society, which comprises hundreds of small landlords, I wish to highlight the recently announced Re-Align Framework, which will let business owners who suffered a significant fall in revenue during the pandemic renegotiate or terminate contracts without penalty.
This proposal will put small landlords in an unfavourable position. Those with mortgage obligations to their lenders, the banks, will be further distressed.
Although the loan moratorium provides some assistance, it is only a deferment of our payment commitment to the banks. The banks have started terminating the deferment programmes progressively.
So small landlords will be hit with zero income (should the tenants choose to terminate the contracts under this framework) and mortgage obligations.
Then there is the issue of the rent waiver provided by small landlords for June and/or July. Small landlords actually waived more than two months of rent, due to the disparity between annual value and actual rent.
Small landlords are different from the big landlords in that, at the start of any tenancy contract, small landlords are committed to paying a minimum of one or two months of brokerage fees and also to providing at least one month of a rent-free renovation period for the tenants.
On another note - small landlords whose tenants are in the entertainment line may not have collected any rental since March from their tenants who have not been able to resume business.
We hope the Law Ministry can consider small landlords' position before finalising the new measures.
Henry Mok Weng Foong
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