appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Natalie Wong

Lilian Cheng

Hong Kong leader Carrie Lam Cheng Yuet-ngor has approved a controversial rent deferral scheme to support struggling commercial tenants affected by the city’s coronavirus outbreak, the Post has learned, shrugging off mounting pressure from developers to shelve the plan.
Sources said the final version of the budget proposal, which would allow local businesses to delay rental payments for up to three months, was opposed by several members of the Executive Council, Lam’s de facto cabinet, during a long debate on Tuesday, even as the majority endorsed it.
“In the end, Lam made the decision to pass the bill without the need of voting,” one source said.
Another insider said even though some Exco members opposed the proposal, including Lam herself, it was difficult for them to reject the budget measure.
“It would be embarrassing for Exco to throw out the budget proposal as this will undermine the government’s credibility. Many small and medium enterprises have great expectations for it to be rolled out very soon,” the source said.

The bill could be gazetted on Friday, according to a government insider, and presented to lawmakers next week at the earliest for first reading.
The current plan is based on amendments suggested by Financial Secretary Paul Chan Mo-po earlier this month, in which he removed the option to extend the moratorium period to a total of six months.
“The deferral won’t be extended any longer than three months, as to balance the interests of landlords and tenants in this exceptionally difficult time,” one source said, adding that the scheme could take effect very soon.
The rent deferment scheme was initially proposed by Chan as part of this year’s budget session on February 23.
Private Hong Kong landlords offer rent relief to tenants hit by Covid-19 closures
The initiative will prevent landlords from terminating tenancies, cutting services or taking legal action against businesses from vulnerable sectors for failing to pay their rent on time.
The source added that executive councillors had agreed the proposal should focus on helping landlords and tenants negotiate new rent agreements that were acceptable to both parties.
“Challenges faced by landlords have been well considered, including their pressure to pay employees and repay mortgages … The legislative intention is that they won’t suffer further loss with this scheme,” they said.
Hong Kong finance chief rejects idea of using public funds to cover SMEs’ rent
The revised proposal also contains measures to help small landlords cope with any cash flow problems caused by delayed rental payments, including interest-free government loans of up to HK$100,000 (US$12,770), deferred tax collection and mortgage reimbursements to banks.
The Real Estate Developers Association of Hong Kong, which counts all of the city’s major developers as members, earlier warned the law would disrupt the non-intervention market principle.
Executive committee chairman Stewart Leung Chi-kin said the association had sent a letter to the financial secretary reflecting their views and there was little they could do further. He accused the government of failing to take the concerns of landlords into account.
“Who will be responsible if the tenants disappear after three months? Not all the landlords are developers, some of them are small landlords,” he told the Post. “We asked the financial minister a few times, but he said we have to overcome these difficult times altogether as a whole.”
Speaking in her capacity as a lawmaker, Regina Ip Lau Suk-yee said her People’s New Party supported the amended proposal.
“I hope this is a compromise solution, [although] not perfect,” she said. “After the financial secretary suggested amendments with the three-month moratorium, our party agreed to support it.”
Wholesale and retail sector lawmaker Peter Shiu Ka-fai, from the pro-business Liberal Party, welcomed the approval of the proposal, saying the scheme would serve as a lifeline for tenants by offering them “more chips” in bargaining for rent concessions.
“To landlords, collecting discounted rents is more preferable than deferring rents for three months,” he said.
Joseph Ho Shiu-chung, convenor of an alliance of tenants across many sectors, noted that an increasing number of landlords had issued letters to tenants threatening legal action before the law took effect.
“We hope that the government could also ban landlords from suing tenants who cannot afford rent for the first three months. Otherwise, many small tenants can’t survive even if they could defer paying rents from April to June,” said Ho, chief supervisor of the Cosmetic & Perfumery Association of Hong Kong.
The government previously estimated that about 130,000 businesses would benefit from the initiative, including restaurants, children’s playgroups and retail stores.
Landlords who fail to comply with the scheme could face penalties equal to three months’ rent or a minimum fine of HK$50,000.
Additional reporting by Cannix Yau


Hong Kong students drop in global rankings for maths, science and literacy

Parents urged to vaccinate children amid threat of flu, Covid-19 and RSV infections

Hong Kong doctor issued over 3,700 fraudulent Covid vaccine exemptions, court hears

Hong Kong enters summer flu season as Covid infections also climb

Coronavirus Hong Kong

Carrie Lam gives green light to Hong Kong’s controversial rent deferral plan despite lobbying by developers and landlords

A controversial rent deferment scheme could be presented to the Legislative Council soon, after receiving the backing of the Executive Council. Photo: Felix Wong

Empty retail shops in Tsim Sha Tsui. Photo: Felix Wong

Hong Kong must not sacrifice rent deferral for small businesses at the altar of big business interests

A woman walks down a deserted street with shuttered shops in SoHo, Hong Kong, on February 28. Photo: Dickson Lee

Business alliance plans ‘show of force’ in bid to ensure Hong Kong finance chief’s controversial rent deferral measure proceeds

Businesses are struggling as the fifth wave of Covid-19 cases takes its toll on Hong Kong. Photo: Dickson Lee

Finance chief Paul Chan. Photo: Robert Ng

Landlords are worried they won’t get their rent from tenants if they go under. Photo: Jonathan Wong

Hong Kong’s Urban Renewal Authority to offer six months’ rent waiver to struggling businesses amid coronavirus fifth wave

Rent relief will be provided to gyms, beauty salons, barber shops and other commercial premises under the URA that were forced to close. Photo: Nora Tam

 Some businesses operating in Urban Renewal Authority (URA) properties could have their rents waived for six months. Photo: Yik Yeung-man

News

Hong Kong

Hong Kong Economy


City leader supports amended version of finance minister Paul Chan’s rent deferment scheme, with no option to extend moratorium period
Proposal to be presented to Legislative Council, source says it could take effect very soon



Amended proposal to be presented to Legislative Council, and source says it could take effect very soon.


Hong Kong economy

Hong Kong budget 2022-2023