Lianhe Zaobao recently ran an article on the legal protections available to landlords and on loopholes involving companies that rent property. TSMP disputes Partner Ong Pei Ching commented on the issue.

The article follows reports of an American man accused of using a shell company to rent a semi-detached house in Kembangan from an elderly couple. The company had only $200 in paid-up capital. The case has raised concerns about the risks of renting to companies and about how hard it is to recover unpaid rent.

Pei Ching said some tenants use companies as a front to exploit legal loopholes. For example, after one family member has been sued for unpaid rent and made bankrupt, the family signs a new tenancy agreement in another member’s name.

She said that even landlords who win in court can lose a lot of time and money if the tenant still refuses to pay and stays in the property. The damages and legal costs the court awards may never be recovered. If the legal requirements are met, the landlord must then start winding-up proceedings against a corporate tenant or bankruptcy proceedings against an individual tenant. This adds further cost and delay for someone who already cannot use their own property.

She believes the authorities should consider a faster eviction process. She also believes they should seriously consider criminal action against repeat offenders who never intended to pay rent.