AL Plenary | Lawmakers rejected CE’s right to amend rental adjustment rate

Lawmakers refused to grant the discretionary power to the chief executive to amend the rental adjustment rate during the article-by article analysis of a rental control mechanism.

Nine lawmakers, including Leonel Alves, Song Pek Kei, and Zheng Anting, had proposed the establishment of a rate based on a coefficient set by the chief executive according to factors like the consumer price index and housing market conditions.

The bill has been the main topic of debate this week at the Legislative Assembly.

Yesterday, the clause suggesting that the chief executive could temporarily change the adjustment rate for the rental market, was shut down.

“It should be delivered to a committee, not decided by the Chief Executive,” said Ma Chi Seng.

The article suggested that the adjustment rate should refer to Macau’s consumer price index, house price index, human resources index and salary index.

But the proposal was criticized by lawmakers such as Ma Chi Seng, who said that it “lacked scientific legislation.”

Contrarily, Leonel Alberto Alves believes that the chief executive has the ability to make the right decision, and he said that the interference of Macau’s top official would only be used when needed.

Regarding the article requiring that all rental contracts must be put into written form, with signatures acknowledged by a notary, several lawmakers, including Lau Veng Seng, wondered whether Macau will have enough notaries to handle the future potential amount of leasing contracts which will need to be certified by a notary.

According to Lau, Macau currently only has between 20 and 30 notaries, but the number of those who understand Chinese is even lower. Lau is worried that notary certification will require longer times from the involved parties to sign a rental contract.

Melinda Chan said “why do you ask for mandatory notation? Whether it can really solve the concerns the public has?” Chen also questioned how much time the notation process will take.

Meanwhile, in response to doubts this week about the supply of notaries in the territory to handle this volume of work, Mak Soi Kun suggested a “more flexible” policy in which the tenant and landlord are allowed to decide. “Whether a notary certification is needed or not, the two parties involved in the contract can choose,” proposed Mak.

Fong Chi Keong deemed the notary certification “really unnecessary,” adding that “it does not need to be done by a notary, […]. I don’t know why [we are] amending this article, […] it does not help at all.”

Vong Hin Fai shared his doubts about the consequences of not having the signatures certified by a notary. “If they [the tenants and landlords] do not respect the related regulations, and if they do not process the legal notation, what would be the consequences? What would render the contract invalid? Would landlords need to be refunded by tenants?” asked Vong.

Song Pek Kei said that the amendment is intended to supervise illegal rental behaviors, which is why lawmakers are requiring notary involvement, so as to ensure peoples’ safety.

Leonel Alves was confident that the number of notaries can grow to meet future requirements, once the law is passed. He also noted that not only must individuals pay tax when buying houses, but, according to Macau law, landlords should also pay tax for leasing their houses. However, he remarked that “[…] many people in Macau do not know that they should pay taxes.”

Other lawmakers chimed in yesterday with additional points: Vong Hin Fai observed that private notaries have the right to reject certification in some cases; Angela Leong sees the amendment as a chance to respond to some of the public’s concerns; while Fong Chi Keong regards it as a “disturbance” to people.

Previously, the city’s law regulated that the landlords could not cancel a rental contract unilaterally within two years. An extension of this restriction to three years was approved yesterday.

Within the context of the extension, some lawmakers were concerned about the ability of a landlord to evict tenants should they fail to pay their rent.

Some lawmakers also claimed that the new extension would be unhelpful for tenants, while others voiced it was unfair on landlords.

The law will come into effect 180 days after it is officially published. In the meantime, the article-by-article analysis of the law is set to continue.