PETALING JAYA: Two lawyers and an MP have urged landlords not to resort to the Distress Act 1951 in seeking to recoup unpaid rentals from tenants affected by Covid-19 and the movement control order.
Lawyer Christie Soosay Nathan said the Act, which allows landlords to recover up to 12 months rental, greatly disadvantaged tenants.
“The application of a writ of distress is filed in the absence of the tenant. This means the tenant will not even know that the landlord has applied for a writ,” Christie, who is helping former residents of Kampung Jaya, Selangor, obtain land promised to them by the Selangor government nearly 30 years ago, told FMT.
“Once the court grants a writ, a bailiff is authorised to seal the rented premises and seize the goods inside. The tenant’s goods may then be sold by public auction with the proceeds going to the landlord.”
He said the only avenue available to the tenant to stop this from happening would be to apply to discharge the writ of distress.
Even then, this application would have to be made within seven days of the premises being sealed.
“Clearly, the Act is disadvantageous to tenants. Many would not be aware that they have only seven days to apply to discharge a writ.
“Seizure causes embarrassment. This would discourage customers from patronising the tenant’s business and potentially lead to business closures,” he said.
Christie said landlords should opt for a more compassionate arrangement, be it through rental waivers or discounts, so that tenants could continue doing business.
“I hope landlords will be compassionate and utilise the government’s tax deduction initiative for them and provide tenants with discounts on their rentals,” he said.
Previously, Prime Minister Muhyiddin Yassin announced that landlords of private premises who reduced their rental rates by at least 30% between April and June could qualify for tax deductions.
Klang MP Charles Santiago echoed Christie’s call, saying it was a time for everyone to show compassion.
“Negotiate with your tenants. I understand where landlords are coming from but we don’t want to see people on the street or put out of business,” he said.
Santiago said he himself had received pleas for help from two of his constituents who were facing pressure to pay their rents.
“One person asked me to call her landlord and intervene. She couldn’t pay her rent because she had lost her job and has no income. A business owner had a similar problem with his landlord and asked for my help,” he said.
Lawyer KS Satkunabalan, meanwhile, urged landlords against going to the court to resolve issues related to their tenancy agreements.
He said as there were no specific laws for residential or commercial tenancies which touched on minimum provisions, all tenancies were guided by individual contracts.
“If every individual contract needs to be interpreted by the courts, you will have very diverse decisions. This will also be an expensive and time-consuming affair,” he said.
Satkunabalan said the reality was that post-MCO, the overhang of unsold property and unoccupied premises would worsen and a lot of malls would see a fall in patronage as social distancing would still be encouraged.
“Even popular malls are likely to see fewer shoppers owing to social distancing practices and spending patterns which will have changed due to lesser incomes during the MCO,” he said.
He said common sense dictated that the best way to resolve rental issues after the MCO was for all parties to work out a win-win situation.
This could be in the form of deferred or lower rental payments, or for the landlords to utilise the rental deposit to offset discounts, and so on.
“This is only for a period of time. The goal of all parties should be to avoid disruption. I think everyone is on the same page, we all want the economy to get moving again,” he said.
