Measures to Protect Micro SMEs in Landlord-tenant Disputes

14 Dr Tan Wu Meng asked the Minister for Law (a) what measures protect sole proprietors of micro SMEs from rogue landlords in the event of landlord-tenant disputes where such disputes are not handled by the Small Claims Tribunal; and (b) what are the avenues by which micro SME sole proprietors of limited means can access legal services at affordable cost especially if they do not qualify for pro bono legal services.

The Second Minister for Law (Mr Edwin Tong Chun Fai) (for the Minister for Law): Mr Speaker, the Small Claims Tribunal’s jurisdiction does not extend to disputes involving non-residential tenancies. In such cases, small and micro SME tenants who wish to enforce their contractual rights may bring an action in Court. Where the claim involves sums of no more than $250,000, this tenant may commence an action in the State Courts.

The Courts have put in place simplified processes and procedures, and schemes also, to help parties, including SME tenants, to navigate the Court process, even without legal representation. For example, for claims brought in the Magistrate’s Court, parties may opt for a simplified process under the Rules of Court to obtain early resolution of the dispute.

In addition, parties can also resolve such disputes efficiently through alternative dispute resolution. If the matter is already before the Court, parties may request, or be referred by a judge, for mediation at the State Courts' Centre for Dispute Resolution. Tenants may also consider mediation before commencing a court action. Mediation is available at a relatively low cost, for example, through the Singapore Mediation Centre’s Small Case Commercial Mediation Scheme.

There are avenues available for micro SMEs to access legal services at an affordable cost, if it transpires that the Court process is what the SME wants to go through. Whilst pro bono legal advice and legal aid are not generally intended for commercial matters, micro SME tenants who are sole proprietorships and cannot afford their own lawyers may also approach the Legal Aid Bureau for assistance, and this can be considered on a case-by-case basis.

Last year, against the backdrop of the COVID-19 pandemic, the Ministry also stepped in to introduce various relief measures to alleviate potentially unfair outcomes, whilst ensuring fairness to parties, including landlords and tenants: (a) we introduced the Rental Relief Framework in June 2020, to help affected SMEs with their cash flow by mandating the passing on of up to four months of rental waiver for the months of April through to July 2020; (b) in November 2020, we introduced the Re-Align Framework, which will help eligible small and micro businesses severely impacted by COVID-19 to renegotiate certain contracts on fairer terms. These contracts include leases or licences for non-residential property of a duration of up to five years. The Framework has been in operation since 15 January 2021 and will last for six weeks.

It is in the same spirit that the Fair Tenancy Pro Tem Committee was formed in June 2020 under the auspices of the Singapore Business Federation, or SBF, to establish industry norms on tenancy practices and terms on which the tenancies are entered into. Key industry representatives from the landlord and tenant communities have been discussing issues relating to fair conduct on the part of landlords and tenants, as well as enforcement and dispute resolution, should that be necessary. MTI and ESG are closely involved in the process and are working with SBF to help facilitate discussions. The Committee is expected to issue its preliminary report on these findings to the Government shortly.

Dr Tan Wu Meng (Jurong): I thank the Minister for his comprehensive answer. I have got two supplementary questions. Sir, I want to surface an observation that some residents have broached with me in Clementi. Some of these residents are elderly, sole proprietors of micro SMEs. Some of these elderly residents have had limited formal education. They went to start a small enterprise, a micro SME, got into a situation with a landlord. And because of their background and their lack of knowledge, they are in an unequal bargaining position.

Can I ask the Minister what is the policy rationale for scoping the Small Claims Tribunal, or SCT, jurisdiction in its present form regarding tenancy disputes? I ask this because in some of these cases, had the dispute involved a contract in a private, non-commercial capacity, the same asymmetry of bargaining power would have existed, the same quantum might have been in contention, but it would have qualified for SCT jurisdiction. So, I was wondering if the Minister can share more about the policy rationale there.

And secondly, how we can further enhance awareness of the available measures for recourse among these elderly micro SMEs sole proprietors?

Mr Edwin Tong Chun Fai: Sir, when a matter goes before the Small Claims Tribunal, the parties represent themselves. And so, those cases are typically scoped to be less complicated, more straightforward, more personal in nature, as opposed to business or commercial, which itself, attracts the potential for disputes being more complicated.

In addition, there is a cap on the quantum of claims that go before the Small Claims Tribunal. It is for that reason that the scoping of the nature of the disputes is as such for Small Claims Tribunal cases. That is, of course, not to say that such entities' elderly persons or proprietors, as Dr Tan has put it, will not be able to avail themselves of other legal services. I have outlined several. There are several pro bono options, Legal Aid can step where appropriate. And in those cases where it is deemed to be of a particular complication and there needs to be more legal advice given, Dr Tan's resident in Clementi can approach the Legal Aid.

As far as awareness is concerned, there are different schemes that I have outlined earlier, including those that were recently introduced in 2020, pertaining to the COVID-19-related relief measures, those have been put on a variety of different platforms, including social media, advertisements, websites. In addition to that, we have also made available to various communities on the ground, including hawkers associations, merchants associations, people in touch with the persons who are likely to need to avail themselves of these measures, material information.

In addition to that, I would say that my Ministry also mans a hotline which has been quite well used in the last few months. We address those queries in a variety of different languages as well.

If none of these avail the particular instance that Dr Tan was speaking about, please feel free to approach me and I will take that offline, and assist the person separately.