Gov’t proposes bill to discourage non-compliant tenants

The government has proposed a new bill that aims to create an alternative method for landlords to deal with non-compliant tenants.

The bill, presented yesterday at the Legislative Assembly (AL) for its first reading, generated a broad debate with a total of twelve lawmakers questioning the Secretary for Administration and Justice, André Cheong, on several of its proposed provisions and aims.

The main topic of discussion related to the establishment of a five-month non-compliance period before the landlord can commence eviction action.

Most lawmakers questioned this requirement, finding the period of non-compliance excessive as well as vulnerable to a potential loophole: if one full rent payment is made before the end of this period.

Others also wanted the government to explain how the executive reached the figure of five months. Ella Lei, Nick Lei, Ron Lam, Ip Sio Kai, and Leong Sun Iok were among those lawmakers who wanted an answer to this particular query.

Other lawmakers, including Zheng Anting, said that the bill only addressed repossession of the unit by the owner and not “the problem itself, which is the lack of related penalties that may create a deterrent effect,” he said.

In response, Cheong noted that this new bill does not aim to replace the current processes of eviction and calls for compensation that the laws provide for but, instead, creates a simplified system for landlords to be able to vacate the units they are renting to tenants who are intentionally breaching their responsibilities with regard to rent payments.

Cheong explained, “the government doesn’t wish [landlords] to resort to this system too easily. The purpose of creating this regime is to have a deterrent effect, not to be an automatic procedure,” he said, claiming that in many of the current situations, the landlords refrain from commencing any procedure as the sums in debt do not justify a complex process that will require lawyers and other court-related procedures that are very time-consuming.

“In many cases, it is not worth starting an [eviction] process as the debt is not that big when compared to the costs and time [it takes] to run the process, which is usually long.”

“[It] affects the market as many landlords refrain from listing their units in the rental market due to being afraid of cases of non-compliance.”

Cheong also added in response to an inquiry from lawmaker José Pereira Coutinho that the purpose is to tackle cases of intentional delay of rent payment and not cases of force majeure, adding, “this is also the reason that the period [of five months] is not shorter – to allow time for the tenants to solve temporary financial problems.”

He also advanced that the government hopes that “where there are simple issues, they can be solved with communication.”

‘Five-month period’ may cause a massive impact on the market

According to lawmaker Ip Sio Kai, the five-month period before eviction may have a significant impact on the market, explaining, “if the period of non-compliance with rent payments becomes five months, rent deposits will likely also move from the current two to five months. This will have a massive impact on the market.” He called on the government to handle this matter with care.

In reality, Cheong failed to produce any justification for the choice of five months other than to say that the government is taking a “balanced approach to the matter and seeing both sides,” a reason earlier also invoked by Pereira Coutinho to call for the reduction of the “waiting period” to two months, which is commonly in use.

Questioned on the number of cases of this kind happening in Macau, Cheong also failed to produce an exact number, saying instead that “it happens very frequently, although there is no exact number of cases [available].”

The Secretary noted that the only concrete figures are the ones related to the cases of eviction that are heard in courts, which in 2023 was 59.

Still, Cheong explained that most cases are never heard in court as such a process is costly and long.  This is precisely why, according to Cheong, the government is promoting this new bill: to allow a cheaper and easier method for owners to evict non-compliant tenants and repossess units.

According to his rough calculations, a process handled using this method can be solved in six to 11 months, while the current processes do not have an upper time limit.

Gov’t open to negotiation

Facing many inquiries and suggestions to improve the bill, the Secretary said the government will be open to negotiating some aspects of the bill at the AL Standing Committee, “as long as the main goal is kept and fulfilled,” adding that this is a complementary method and a simplified alternative that aims only to repossess units and is not about other compensation, which are separate matters.

Among the most extreme proposals Cheong heard were the ones from lawmaker Lam who proposed the establishment of a “blacklist of tenants” as well as another from lawmaker Leong who wanted to enforce a similar regime to the one approved for the cases of water infiltration that allows the interruption of water and electricity supply to the unit.

To such proposals, Cheong responded only that they could cause many issues and conflict, noting about the second suggestion that, “we have this procedure just for cases of housing units being used as illegal hostels.”