The chairman of the third standing committee at the Legislative Assembly (AL), legislator Cheang Chi Keong reported yesterday after a committee meeting that the new bill for the rental regime suggests at least three-year contracts for both commercial and residential property rentals.
According to Cheang, signatories of the bill previously proposed that the suggested extension of the contract to three years could only apply to commercial properties, noting that tenants usually need time to refit shops before starting a business.
However, the chairman said some of the members of the committee voiced displeasure, stating the measure was unfair given that it didn’t also apply to residential properties, resulting in the application of the contract term to both types.
Pursuant to the proposed three-year contracts, landlords of properties cannot terminate a contract in less than three years, but tenants have the right to request termination, the committee noted, given that a number of non-resident workers may reside in the city for less than that period of time.
Meanwhile, another significant proposal of the bill is the mechanism to allow the Chief Executive (CE) to cap rental prices by taking into account the city’s economic indicators, such as the inflation rate or employment rate.
The chairman stressed that the discussion yesterday concluded that the new points of the mechanism are “temporary” and “exceptional”.
“The mechanism can be imposed to certain types of real estate,” explained Cheang. “For example […] a coefficient can be rolled out to cope with the high rental prices for private parking lots.”
He added that the mechanism allows the CE to roll out coefficients to cap rental prices for all types of real estate properties.
“This will be one of the ‘tough measures’ to stabilise the city’s development in the future,” remarked legislator Cheang.
The chairman stressed that the proposed bill does not prohibit landlords from raising rental prices.
“What we are proposing is to roll out the highest coefficient and landlords should not increase rent over the suggested coefficient,” stressed the legislator.

Arbitration mechanism and mandatory notary
On the other hand, the proposed bill also suggested the setting up of an arbitration mechanism in order to simplify the process of resolving any disputes, rather than having to involve the Courts.
“The proposed bill now suggests allowing the government to make use of the existing arbitration centres to resolve rental disputes,” indicated Cheang, while adding that the government could also set up a particular arbitration centre to only handle rental disputes, depending on the number of cases in the future.
According to the legislator, there are currently four arbitration centres: one in the World Trade Centre, one at the Macau Lawyers Association (Associação dos Advogados de Macau), and one each in the Housing Bureau and the Consumer Council.
However, currently only the two at the World Trade Centre and Macau Lawyers Association provide arbitration services.
Regarding the mandatory notary mechanism, Cheang said opinions were expressed that the involvement of a notary when signing rental contracts would protect both landlords and tenants, in particular in regards to the verification of the identities of the involved parties.
“There are cases in which the landlord’s identification is faulty when disputes happen,” revealed the legislator.
Opinions were also expressed that the notary mechanism would be effective in combating illegal provision of accommodation.
Cheang also noted that a mandatory notary would also benefit real estate agencies.
According to the chairman, the committee has completed its deliberation of the final reading, adding that the bill will be able to be sent for voting at the plenary session before the end of this AL session.
Hopefully the proposal will be signed by the end of this month, legislator Cheang stated.
The first reading of the proposed bill was passed in November of 2015 and the proposed bill has been signed by nine legislators.

Suitable adjustment for healthier development
One of the proposers of the bill, legislator Song Pek Kei, said the intention of revising the rental law is “to adjust the rental market accordingly to ensure the healthy growth of the market, but not to completely intervene in the real estate rental market.”
Recently, representatives of the real estate market voiced the opinion that it is inappropriate for the government to intervene in the free market.
Legislator Song emphasised that the current proposed bill suggests the setting up of a system, rather than the roll out of an instant policy for the real estate market.