Malaysia’s businesses feeling squeezed from both sides

29-May-2020 Intellasia | Asia One | 7:25 AM Print This Post

Businesses may go bust unless something is done to reduce their overheads.

One of the largest bills they still have to foot is rental even though many are still unable to open due to the movement control order (MCO).

StarMetro interviewed a few business owners who said they were struggling to cope and may have to close shop for good unless they receive some form of assistance. All names below have been changed to protect their identities.

Struggling to survive, Jay owns and operates a children’s play space in a neighbourhood mall in Selangor.

His business had been greatly affected from as early as February because of the Covid-19 outbreak.

He claimed to have emailed the mall management twice seeking to reduce his monthly rental of RM22,000 (S$6,500).

Jay said he never received a response but when he highlighted his plight on social media, he claimed to have been targeted by the mall’s management.

“I provided a livelihood to about 20 workers during my four years at the mall but business took a dip because of Covid-19.

“Instead of reducing the rent, the mall continued to send me rental invoices, including late payment charges.”

Jay claimed that the mall management had been selective over who deserved a rental discount.

He has not been able to secure any government assistance and may have to file for bankruptcy.

“I was told to pay until my tenancy agreement ends in 2021,” said Jay, adding that small and medium enterprises were in need of a bailout to pay their rental.

Emanual, who operated from a shoplot in Petaling Jaya, had not paid rent for two months.

“I received a legal notice asking me to vacate during the MCO. I had always paid my rental on time over the last five years.

“The MCO has put tenants like me in a difficult position,” said Emanual, adding that he had since moved out and relocated to a place with cheaper rental.

“Many businesses will have to close down or relocate to survive,” he said.

Wong, who operates a tuition centre in Segambut, said he had to “threaten” to move out before the landlord would even consider reducing the rent during MCO.

“I have been here for almost 18 years. I pay RM600 monthly for my unit.

“But because of the MCO, the centre was closed. The landlord insisted that I pay the full amount.

“It was only when I said I would have to move out that he eventually reduced it by 50 per cent,” he said.

Meanwhile, Ruby, was shocked to receive a letter from the building management that her company would have to pay the full rental for April even though none of the offices in her building were allowed to operate.

“We were also asked to pay 50 per cent of the parking fees. I am paying RM1,800 per month for rent and RM180 for parking,” said Ruby, adding that the management should have been more understanding.

Meanwhile, Keneth, a tenant in a shopping centre in Kuala Lumpur, felt it was unfair for the management ask them to pay the service charge in full during the MCO.

Keneth, who operates a F&B outlet, said while shops that were closed during the first phase of MCO were exempted from paying rent and service charge, this changed during the conditional MCO.

“For April, the rental was waived but we were still charged the full service charge even though most of the mall was closed.”

“Since May 4, when the conditional MCO kicked in, we received a 30 per cent reduction but still had to pay the full service charge, which is not fair,” he said.

Sympathetic landlords

However, some landlords like Sunway Malls have been proactive in helping out struggling tenants.

Sunway Malls & Theme Parks chief executive officer HC Chan said during phase one of the MCO, Sunway Malls gave a full waiver on rent to non-essential as well as F&B operators.

“Only essential services were excluded from the rental waiver.

“We have extended the option of flexi-hours to non-essential as well as F&B operators post-MCO.

“They can choose to operate at a minimum eight hours per day compared to 12 so that they can manage their wages and utilities better,” he said.

A representative from Wisma MCIS in Petaling Jaya, said although no discount was given on rent, tenants were allowed to defer their payment for April, May and June.

“We are unable to give discounts as we have our own commitments, including bank loans,” he said, adding that there were about 40 tenants in the building.

He said even before the MCO, there were some tenants who had not paid their rent for the past two months.

“We still have to pay salaries for 10 building staff, and ensure that we do not neglect payments to contractors and cleaning services,” he explained.

Federation of Malaysian Consumer Associations chief executive officer Datuk Dr Paul Selvaraj said many tenants may have to break their tenancy agreement because business had been so bad due to the MCO.

“There needs to be legislation in place to safeguard both the landlord and tenants.

“It is time the government formed an independent body to be the intermediary between tenants and building owners in relation to rental,” he added.


Category: Malaysia

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