Covid-19 bill wishlist - breathing space, no tenant evictions top concerns

The economic downturn brought about by the Covid-19 pandemic has led to broken agreements by businesses failing to honour their orders to tenants being unable to pay their landlords.

For the Malay Economic Action Council (MTEM), it hopes the government's proposed Covid-19 (Temporary Measures) Bill can address these problems, particularly in the latter example which has seen people made homeless as landlords evict tenants who lost their source of income due to the movement control order.

Tenants were evicted despite landlords enjoying a six-month housing loan moratorium from banks as announced by Bank Negara Malaysia in March.

“On MTEM’s side, we welcome (the Covid-19 Bill) as we know a lot of people that have rental arrangements with landlords. One of the key issues is they have been forced to vacate their premises.

“The bill will give them breathing space because this (situation) is unprecedented. Nobody wanted this, whatever plans they have, it is not happening the way they were supposed to,” MTEM chief executive officer Ahmad Yazid Othman (above) told Malaysiakini when contacted today.

The proposed Covid-19 Bill is meant to provide temporary relief from contractual agreements for a set period of time and is expected to be tabled during the July sitting of Parliament. Prime Minister Muhyiddin Yassin made this announcement while delivering a speech on the National Economic Recovery Plan (Penjana) yesterday.

Although no details were provided, the new law is likely to mimic Singapore’s Covid-19 (Temporary Measures) Act 2020 which was passed by Singapore’s Parliament on April 7 and gazetted just two days later.

The new law defines how a person or entity can seek temporary relief from some contractual obligations. The counterparty would then be disallowed from commencing or continuing legal action against – or seize property from – a person seeking relief.

Michael Kang

Most importantly, the law stops individuals or entities from initiating winding-up or bankruptcy proceedings against the person seeking relief.

SME Association president Michael Kang said Malaysia’s Covid-19 Bill should supersede all agreements as the pandemic was a natural disaster which was not caused by anyone.

“Any law or act should facilitate people to do business and not counter-sue each other. Singapore already came out with their Covid-19 Bill a while back, they are already using the act to supersede all agreements,” he said.

The proposed Malaysian Covid-19 bill will buy time for many businesses to restructure their financing, their loans and so on, added Kang.

Aside from rental agreements, a wide range of other legal issues and litigation implications have plagued all commercial sectors since the start of the movement control order (MCO) on March 18.

National Chamber of Commerce and Industry Malaysia (NCCIM) president Ter Leong Yap said if these issues continued to be unaddressed, it would lead to a flood of “unproductive” and “costly” legal disputes which in turn would burden the court systems.

There will also be a lack of clarity, certainty and consistency, which Ter said are vital for sound business decision-making.

“With the proposed enactment of this temporary law, all parties concerned can meet to discuss the best possible ways to reach an amicable settlement or solution to deal with an unprecedented situation that is beyond their control,” he said.

Essentially, the Covid-19 pandemic had created a situation where fulfilling certain contractual agreements became impossible for many businesses.

Economist Hafiz Noor Shams said breaking such contracts could lead to financial and job losses.

“So having a temporary law to suspend such a provision (contract obligation) could prevent contracts from being broken and prevent job losses. While important, you could imagine that it would be more useful if such law was introduced early on,” he said.

With the July Parliament sitting more than a month away, there are concerns that this Covid-19 bill would come in too late to be effective.

Ter Leong Yap

While Ahmad Yazid acknowledged these concerns, he said it is still “better late than never”.

“If they were not doing it at all, it would be more concerning. I do hope the government does not take too long a time to resolve this because businesses are now making decisions on a week-to-week basis,” he said.

He explained that previous government incentives were not delivered fast enough which jeopardised a lot of businesses. There is no point to the government’s efforts to restart the economy if a lot of people end up in bankruptcy before that, he added.

Ter also hoped the bill will be tabled as soon as possible, saying the “speedy enactment of the act is deemed critical for the business recovery stage”.

If the bill were to be delayed for any reason, it would be catastrophic for many businesses, said both Ter and Kang.

Ter said a delay would disrupt businesses’ efforts to recover as their time and resources would be diverted by possible legal disputes and heavy liabilities or penalties for non-fulfilment of contractual obligations.

Kang put it more bluntly saying that many businesses would be forced to shut down or lay off more employees.

“A lot of people have no choice. Without the Covid-19 bill, they might as well close down their business and lay off their employees. Not because they want to but because they have run out of cash,” he said.

Ter then said it was imperative for the government to look into this matter with urgency as "any amount of economic and financial stimulus would be an exercise in futility" without accompanying legislature to provide breathing space for businesses and individuals to recover. - Mkini