No Extension For Rent Moratorium: FS

The Financial Secretary, Paul Chan, said on Monday that the planned three-month moratorium on commercial rents will not be extended.

The scheme was announced in his budget proposals last month, with the minister saying it could be lengthened for another three months if necessary.

Under the plan, landlords will be barred from evicting or taking legal action against businesses that fall behind in their rental payments during the current Covid-19 outbreak.

Any violation during the three-month “protection period” – which begins when the proposed plan becomes law – will be liable to a fine that equals to two times the amount of the rent claimed, and in any event not less than HK$50,000.

When asked by lawmakers on whether there would be safeguards once the three-month protection period ends, Chan said it’s not suitable for the government to further interfere.

“As for what should be done after the three-month period, it would be difficult to impose strict regulations, because tenants and landlords will have had different arrangements regarding the rent during the three-month protection period, which is flexible,” he said.

“As to whether there will be more assistance for tenants, legislating rent waivers is not feasible.”

The financial chief also revealed at the meeting that the protection will not apply to landlords and tenants who signed new tenancy agreements during the period which provided them a chance to negotiate on concessions.

While several lawmakers urged the government to provide a guideline on the extent of rent reduction, the financial secretary said it would be difficult to do so.

“Some landlords are relatively more empathetic towards tenants, while others stand firm. It would be quite hard to instruct landlords on the percentage of rent concessions, and this is not scientific either,” he said.

“As the SAR government, it’s impossible to draw a meaningful, directional line on this matter.”