Written by: Syasya Nur
As the COVID-19 pandemic continues to affect the economy, tenants in malls and other commercial establishments are feeling the financial strain. They struggle with both the loss of income due to public health measures and unfair tenancy practices. Tenants have not been receiving government tax rebates during COVID-19 due to the lack of regulation.
FTFIC Recommendations to Ministries
In May 2020, FTFIC submitted a position paper to the Ministry of Law and the Ministry of Trade and Industry. This paper stated 15 key recommendations based on these principles:
Incentivising value creation
Protecting tenants from unfair tenancy practices
Building a more sustainable ecosystem
Instituting the concept of reciprocity
In practice, FTFIC’s recommendations cover three areas: transparency of information, regulation of conduct, and enforcement.
1. Provide transparency by creating a rental information database
Under transparency of information, FTFIC recommended creating a public rental information database with monthly updates by commercial landlords regarding mall-level productivity, which refers to tenant sales within the same shopping centre. It was also recommended that this database be made accessible to commercial tenants so they can keep track of the mall’s performance and allow them to have fairer negotiations for their rental contracts.
2. Regulate landlord behaviour by legislating a Fair Tenancy Bill
FTFIC is also appealing for a Fair Tenancy Bill to be legislated to ban discriminatory tenancy practices and behaviour by both landlords and tenants. The bill aims to regulate the conduct of landlords by imposing limits on security deposits and using a formula of base rent and negotiable gross turnover component in the calculation of retail rents.
3. Manage landlord-tenant relations with a Fair Tenancy Commission
Lastly, FTFIC pushed for a Fair Tenancy Commission to supervise the creation and generation of rental market data. The enforcement of this Commision would allow them to manage landlord-tenant matters, advise on gaps and disputes as well as regularly review and revise legislation.
With the FTFIC advocating for fairer tenancy practices, commercial tenants can look forward to rental rebates during COVID-19 and more negotiating power in discussing rental contracts with commercial landlords in the future.
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