CONTROLLED PREMISES (SPECIAL PROVISIONS) (AMENDMENT) BILL

Order for Second Reading read.

5.57 p.m.

The Minister for Law and National Development (Mr E. W. Barker): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The amendments proposed in this Bill are concerned principally with the compensatory provisions of the Controlled Premises (Special Provisions) Act. Section 7 (3) of the Act provides that the total amount of compensation to be awarded in a case where a tenant has sublet his premises must not exceed the amount of compensation that could be awarded in a case where a tenant has not so sublet his premises. In the working of this legislation since the Act came into force, the Tenants Compensation Board has found that this section is unduly restrictive in enabling the Board to award fair and reasonable compensation to tenants. The original philosophy behind this provision was that landlords should not be penalised by having to pay out more compensation where tenants had sublet parts of the controlled premises; for, after all, landlords had over the years derived no financial benefit themselves from the subletting. But the experience of the Board has shown that this approach has failed adequately to take into account the reality of existing economic and social conditions in Singapore.

In order, therefore, for the Tenants Compensation Board to strike a fairer balance as between landlords and tenants in the award of compensation, it is proposed that section 7 (3) should be deleted from the Act. While the effect of the deletion will be that landlords may be liable under the law to pay out more compensation than might otherwise be the case, it will ensure that dispossessed tenants will receive sufficient compensation to enable them to set up new homes or businesses elsewhere.

The Tenants Compensation Board has also proposed an amendment to give the Board power to award compensation to any person (other than a tenant or subtenant) using or occupying any part of the controlled premises. Such occupiers have no protection or standing under the Control of Rent Act, upon which the Controlled Premises (Special Provisions) Act hinges. The adoption of this proposal, therefore, entails widening the scope of the parent Act in a way that was not envisaged when the Act was drafted. Although the concept does not lend itself to ready acceptability within the narrow confines of property law, the Board is convinced that social and economic considerations justify the adoption of this novel concept. The proposal has principally in contemplation occupiers who are stall-holders selling goods or refreshments to the public under an arrangement with the chief tenant. So long as it is enacted that any compensation that is payable to these occupiers comes out of the amount that is payable to the person who has derived benefit from the occupation, that is to say the chief tenant in most cases, the amendment can be justified on the wider social and economic grounds and will not, within these limits, do too much violence to the settled principles of property law. The amendment giving effect to this proposal would appear as a new section 9A in the Act.

The other amendments in the Bill are of a consequential or formal nature and do not call for special comment.

Sir, I beg to move.

Question proposed.

6.00 p.m.

The Minister for Labour (Mr Ong Pang Boon): Mr Speaker, Sir, I rise to support the Amendment Bill moved by my colleague, the Minister for Law and National Development.

Sir, we all agree that a large part of the Central City areas is in need of renewal, as many of the properties were built in the last century and are now in a dilapidated condition. Some are even unsafe for occupation, quite apart from health considerations. Thus, when the Controlled Premises (Special Provisions) Act was introduced in 1969 to remove the protection accorded to tenants of controlled premises under the Control of Rent Ordinance so as to enable redevelopment to take place, there was general support from the public. In fact, all agreed that redevelopment of the Central City areas would not only bring greater economic opportunities and employment to the people of Singapore in general, but would also change Singapore into a modern City befitting its status as a regional and international centre of communication, trade and commerce.

However, in the process, there is bound to be some dislocation and suffering to some of the affected tenants and subtenants, especially those who depend on the Telok Ayer Basin and the waterfront for their livelihood. It is only fair and just that they should be compensated to make their removal and resettlement in a new and more distant environment more bearable. It would be grossly unjust if prosperity in one sector of our society should be built on the misery of another sector, albeit a smaller one. Indeed, this was taken into consideration in the Act, wherein provisions were made for the establishment of a Tenants Compensation Board to ensure that fair and reasonable compensation shall be paid by the landlord or developer to tenants or subtenants affected by urban renewal in the designated area. The landlord is offered generous concession for undertaking urban renewal project in the form of lower property tax - 12 per cent as against 36 per cent. A landlord who can commit millions of dollars in a redevelopment project can in all cases offer a fair amount of compensation to affected tenants and subtenants, otherwise he should not be in the business in the first instance.

However, in the short period since the Act was in force, it has been found that landlords were far from willing to offer fair and reasonable compensation to tenants and subtenants. They often exploited the ignorance of the illiterate residential tenants and subtenants. In one case I was informed, as I was then in America, that a landlord even resorted to the tactics of demolishing parts of a building in order to force tenants in another part to accept unreasonable terms of compensation and move out for their own safety. In another instance, despite the strong recommendation made by the Tenants Compensation Board for enhanced ex gratia payments, the landlord, a leading local bank, was unsympathetic to the claims of a number of occupiers in controlled premises. The landlord was prepared to pay only a derisory sum of ex gratia to them. It was only through the intervention of elected representatives that the bank eventually agreed to increase ex gratia payments to the occupiers. In fact, it was as a result of this case that the present amendments to section 9 were introduced. Indeed, if landlords or developers, particularly those with millions of dollars of assets, were to take the lead and show a little sympathy for the plight of the poor, the present amendments would not have been necessary.

It is to the credit of the Tenants Compensation Board that, in the course of its deliberations, it has adopted a liberal attitude and has been responsive to the changing circumstances in our economy and the Government's more liberal policy of compensation in respect of its own resettlement cases. As the House is aware, since the coming into force of the Controlled Premises (Special Provisions) Act in 1969, the rent of private residential properties has gone up several-folds and well beyond the reach of tenants and subtenants in controlled premises in the Golden Shoe area. As a result, the demand for public housing has shot up to an all time high so much so that, despite the record annual output of 16,000 units per annum by the Housing and Development Board, the demand cannot be met promptly. Today, an applicant has to wait an average of about three years before he can obtain a fiat, either on rent or purchase. This is a factor which the Tenants Compensation Board will have to take into consideration in deciding the quantum of compensation as the Housing and Development Board has become the only source of supply of cheap housing within the reach of the poor living in the Golden Shoe area. My personal view is that a reasonable minimum amount of compensation for a residential tenant or subtenant as of today, shall be in the region of $5,000 or 18 years' rent, whichever is the greater amount, not taking into consideration other relevant factors such as removal costs, location and siting of controlled premises, hardship, etc. 1 have no doubt that the Tenants Compensation Board appreciates the position and will know how to exercise discretion in this matter.

Mr Speaker, Sir, I support the Amendment Bill.

Mr Barker: Mr Speaker, Sir, I thank my colleague, the Minister for Labour, for his support. At the Second Reading of the Controlled Premises (Special Provisions) Bill, I did inform Members that the formula set out in the Ordinance, for compensation of at least six to eight years' rent was not a magic formula,, and that we were experimenting with this formula in an Act which has been extended only to the Golden Shoe area in Telok Ayer. It was as a result of the experience of the Board that these amendments as contained in the Bill have been put before the House today, and I hope that, as a result, fairer compensation will be paid out to occupants of houses in the Golden Shoe area. It may well be that subsequent experience may even lead to further amendments.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill.-[Mr Barker].

Bill considered in Committee; reported without amendment; read a Third time and passed.