CONTROLLED PREMISES (SPECIAL PROVISIONS) (AMENDMENT) BILL

Order for Second Reading read. 4.21 pm

The Minister for National Development (Mr S. Dhanabalan): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, the Controlled Premises (Special Provisions) Bill enables owners in conservation areas to recover possession of their rent-controlled properties. The Controlled Premises (Special Provisions) Act, enacted in 1970, was used to enable owners in the Collyer Quay/Shenton Way central business district area, also known as the "Golden Shoe Area" to recover possession of their rent-controlled properties for redevelopment. This area which was declared a development area on 27th February 1970 is an example of the successful redevelopment of our city through the Act.

The Act in its present form provides for redevelopment of rent-controlled properties. Such redevelopment often involves demolition of existing buildings, consolidation of small plots and construction of entirely new buildings. This, however, is not what would be required in conservation areas. Owners of properties in conservation areas would be required to renovate their premises based on URA's conservation guidelines, and not to tear them down and put up new buildings.

The Controlled Premises (Special Provisions) (Amendment) Bill seeks to broaden the definition of "develop" to include approved renovation works. With this, owners of rent-controlled properties in conservation areas will be able to recover possession of their premises to carry out renovation works based on approved guidelines.

Sir, as at 7th October 1988, all owner-occupied premises, vacant premises and premises owned by a body corporate which are vacant or occupied by or let to a director or employee of the body corporate, are exempted from the provisions of the Control of Rent Act. In other words, on that date, any rent-controlled premise that was owner-occupied or owned by a company but occupied by a servant of the company, is exempted from the provisions of the Control of Rent Act. Sir, in other words, the Control of Rent Act now only applies to properties which are tenanted.

Rent control of other properties will be phased out in stages under the Controlled Premises (Special Provisions) Act. The conservation areas of Chinatown, Little India, Kampong Glam, Boat Quay, Emerald Hill and Cairnhill will be declared as development areas in the first phase of decontrol.

Sir, if I may clarify, there is an important distinction between using this Act to decontrol and just repealing the Control of Rent Act. If we repeal the Control of Rent Act, it would amount to saying that all rent-controlled properties are decontrolled and the owners can take possession. The owners need not do anything with the property. All they need to do is compensate the tenant or just raise the rentals for the tenant and then if the tenant does not pay, he is turfed out and the owner takes possession and he can move in and occupy the property. So there is no development work that needs to be done in order to gain possession of a rent-controlled property. That would be the effect of repealing the Control of Rent Act. By using the Controlled Premises (Special Provisions) Act, what we will be doing is that, we will, in phases, decontrol areas and those owning properties which are rent-controlled can take possession of the properties if they are able to come out with redevelopment plans. In other words, they just cannot take repossession of the properties. It must be coupled with some plan to redevelop. In the case of the conservation areas, the redevelopment will mean conservation works. Later, when we extend it to other areas, redevelopment will mean the traditional definition of "development" which is knocking down and rebuilding.

Sir, since the policy on phasing out of rent control was announced on 6th October 1988, some 100 planning applications have been received from private owners in conservation areas. The enthusiastic response shown by private owners, even before the conservation areas have been declared designated areas, augurs well for Government's conservation programme. With the passing of this Bill, private owners will be able to recover their properties and get on with conservation works.

Sir, I beg to move.

Question proposed.

Dr Lee Siew-Choh: Mr Speaker, Sir, I asked a few questions a little while ago and the Minister has answered only one. May I repeat the questions just in case? I asked: in owner-occupied premises, will the owner be allowed to renovate within his means? He has already answered that.

The next question is: in premises recently acquired by the URA where the sitting tenant is the past owner, will the URA release back to the past owner the acquired premises and allow him to carry out renovations according to URA guidelines?

On the question of rentals, if rentals are increased as a result of some renovation, will rentals be reasonable and affordable to sitting tenants and not be raised to so-called market rate levels? If there are rental increases, should not rental increases bear some relation to expenditure incurred in renovation? If disputes arise as regards the quantum of the increase in rentals, should the Rent Conciliation Board be given powers to determine a fair increase in rentals?

On the matter of eviction and compensation, the present compensation paid to existing business premises is woefully inadequate. Will compensation therefore be considerably increased in such instances, especially where the buildings have been acquired by the URA and the tenant has lost potentially higher compensation from the old private owner?

On the matter of notices to quit, if forced to quit, will adequate and even extended time be given, say, one or two years, to tenants to look for alternative suitable business premises?

Dr Koh Lip Lin (Nee Soon South): ( In Mandarin): Mr Speaker, Sir, as a member of the Government Parliamentary Committee on National Development and Housing, I support this Bill. I feel that the Bill is very appropriate and timely so that certain areas which have historical buildings and of cultural value may be preserved. The Bill, on implementation, will give new life to such areas. It will also affect many people, including owners of properties and old tenants and occupants of such properties.

I would like to ask the Minister two questions: (1) What measures would the Government take to prevent owners from taking advantage of the Bill to drive away old tenants? How is the Government to ensure that these tenants can get appropriate compensation? (2) What special measures of assistance would the Government give to the affected tenants whose landlords wish to develop the houses, particularly in those old areas like Kreta Ayer where, I believe, there are many single old people who have been staying in rent-controlled houses for many years? To such people, would the Government give them special care and assistance so that they would not become homeless?

Dr S. Vasoo (Tiong Bahru GRC): Sir, I rise to support the Bill. I feel that the amendments will bring a fresh life to the older neighbourhoods in Singapore, and it will provide new developments to be undertaken. I understand that in many of these neighbourhoods there are senior citizens living in tenement housings and also families living in controlled premises. Now that there is the opportunity for these controlled premises and areas to be developed, I am wondering whether the interests of the senior citizens and working class families living in these premises will be protected from being taken advantage of by unscrupulous developers. Unless the Ministry is able to oversee this aspect and mediate some of the problems arising, I anticipate that many of these helpless senior citizens and families may be taken advantage of. I am therefore enquiring whether the Ministry will make provisions to ensure that they are not unfairly displaced and that their housing needs will also be looked into if they are to be relocated.

I support the Bill.

Mr Dhanabalan: Mr Speaker, Sir, perhaps I can take the last point first because both Dr Vasoo and Dr Koh have raised this point. This relates to senior citizens in conservation areas. We are aware that there are a number of senior citizens who are single, who do not have families and who are in the conservation areas. They will require special assistance. In fact, as part of the programme to redevelop the conservation areas, we have identified such old single persons and we will try and re-locate them, re-house them in HDB premises as close to the present conservation area as possible. If such senior citizens are already receiving assistance from the Ministry of Community Development, of course, they will continue to get such assistance. But I must inform Members that the experience of the URA in the clearing of some of the buildings in China Town in the past has been that the majority of these old people do have families and they do not move separately into the HDB estates. They go and live with their children. But regarding those who do not have families, we certainly will try and make special arrangements for them to be rehoused.

On the other question, Sir, I feel that a number of questions raised by Dr Lee Siew-Choh are really not relevant to this Bill. They have to do with compensation and types of compensation and so on. But some of the questions may be due to the fact that the process of re-possessing properties under the Controlled Premises Act is probably not well understood. If I may, Mr Speaker, Sir, I would just like to go through the process so that some of the misunderstandings will be cleared up. They will know what the process is.

First of all, as I have mentioned, under the Controlled Premises Act, and this amendment will become part of the Act, recovery of tenanted rent controlled properties by landlords is only possible where they want to redevelop the property. In other words, they cannot serve notice on the tenants and ask them to quit without showing that they have redevelopment plans. If they can settle with the tenants by direct negotiations, of course, they can do so. But if the tenants do not agree, then they have recourse to the Tenants Compensation Board. This is quite different and distinct from the other board that I think Dr Lee referred to, which is the Rent Conciliation Board. That is a completely different thing. The Tenants Compensation Board established under the Controlled Premises (Special Provisions) Act will then hear the case. There is a certain process to be gone through. First of all, the owner must apply to the Tenants Compensation Board on a prescribed form with certain supporting evidence. He must show that he has sufficient funds for developing the premises and in the case of conservation areas he must show that he has funds to carry out the conservation. In other words, he cannot say, "I want to do something" without showing evidence that he can carry it out.

Secondly, the landlord must show that he has written approval from the Government for a plan of development. So in the case of conservation area, the URA which will be the conservation authority will have to consider the plans and approve the plans. Then the landlord will show that he has the money as well as approved plans.

Thirdly, the landlord has to give the Board a written undertaking that he will commence work within six months from the date he obtains possession of the premises. He must have a definite schedule of implementation. Then the landlord has to give an undertaking to the Board that he will deposit with the Board within 14 days of the Board's decision the amount of compensation determined by the Board. So once the Board hears the case, fixes a compensation, within 14 days the owner must deposit the money with the Board. After he has made his application and paid the required fees, the landlord is required to give a copy of his application to all the tenants and sub-tenants in the building. The Board will then fix a date for hearing and will exhibit a notice in the premises so that all those living in the particular building will know that a hearing is coming up, and this notice will be in all the four languages. Everybody in the landlord's premises would be aware that there would be a hearing. If the tenants, sub-tenants or occupiers of the building wish to be heard, they must of course file with the Board a notice that they want to appear before the Board and there is a time limit within which they have to do that; it is 14 days. So that is the procedure. Where the tenant and the landlord cannot agree, they have recourse to this procedure. So there is no question of a landlord just booting out the tenant. He has to show that he has the resources and that he will carry out the plan according to a certain time table. If he recovers the property, having deposited the money and clearing out the tenants but does not proceed with his conservation programme as undertaken by him, then we can acquire. In fact, we will acquire the premises, and the acquisition value will be as in the law, which may be lower than the market value on the date that the landlord's property has been acquired. So there are some penalties. When we use this law, it does not mean that a landlord can just blindly, without proper planning or without funds to carry out his plan, get rid of his tenants. That is the protection that the tenants have.

Where it comes to renovation and restoration of rent-controlled properties which are still rent-controlled, then the question of the increases in rent will come up, but that has got nothing to do with this law. That is the Control of Rent Act. And the Rent Conciliation Board deals with that kind of thing, and I do not think I should go into that under this Bill. So this Bill, when implemented, would enable the landlord to repossess his property. And once he repossesses his property, of course, the question of rent increase does not arise any more. It is a new property. It is a de-controlled property and after he has renovated, restored, the rental will be the market rental.

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 S. Dhanabalan].

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