ABOLITION OF CONTROL OF RENT ACT (Assistance to tenants facing hardship)

Mr Tay Beng Chuan asked the Minister for National Development whether his Ministry has considered the potential hardship to existing tenants of certain premises following the abolition of the Control of Rent Act from 1st April 2001 and whether any appropriate assistance will be given to those who are requested by their landlords to vacate their rent-controlled premises and face difficulties in relocating their homes or businesses.

Mr Mah Bow Tan: Mr Speaker, Sir, the Government was mindful of possible hardship to tenants affected by the abolition of rent control on 1st April this year. Hence, the intention to abolish rent control was announced in April 1997, four years ago. This exceptionally long notice period was to give tenants sufficient time to find alternative premises or to reach agreement with their landlords to stay on after lifting of rent control. The URA also sent reminders to tenants every year since April 1997, and since April last year, every three months.

The Government has in place two special housing schemes for residential tenants affected by the abolition of rent control. These are the Old Single Person Tenants' Scheme and the Rent Decontrol Housing Assistance Scheme. Since 1993, out of 502 applicants, 441 of them qualified for either one of these housing schemes. Seven applications were received after 1st April this year when the abolition of rent control took effect. Of these seven, six were eligible for the special housing schemes.

The original intention of rent control was to ensure a roof over people's heads, especially during the post-war days of severe housing shortage. It was not meant to provide cheap premises for commercial or other non-residential uses. Tenants who use rent-controlled premises for their businesses or other non-residential purposes have enjoyed exceptionally low rental for many, many years. Such tenants should now look for alternative premises on their own, or negotiate with their landlords for mutually acceptable terms if they wish to continue to stay.

Mr R. Ravindran (Bukit Timah): Sir, as there are many small and medium-sized businesses using some of these rent-controlled premises, could the Ministry possibly look into giving some kind of relocation benefits or arranging alternative business premises for them, either through HDB or in collaboration with JTC?

Mr Mah Bow Tan: Sir, I am afraid there are no such resettlement schemes for businesses which are located in rent-controlled premises. It is for the simple reason, as I said, in the first place, the rent control legislation was not really meant to allow them to operate out of very cheap rental premises. Indeed, we are aware, for example, of many such tenants who have actually sublet their premises at considerable financial gain. Be that as it may, the small and medium enterprises have actually been given, as I said earlier, many years of notice in order to allow them to start to negotiate with their landlords to prepare for the day when the rent control will finally be lifted. So under such circumstances, the Government has no special arrangements made to either relocate or compensate them. If there was any compensation to be negotiated, it should have been done much earlier when notice was first given.