Bills Committee on Temporary Protection Measures for Business Tenants (COVID-19 Pandemic) Bill
Mr CHAN Chun-ying declared that he was employed as an advisor of a bank.
Mr CHAN Chun-ying enquired about: (a) whether the rental enforcement moratorium and the security enforcement moratorium under the Bill had overriding effect over the terms and conditions of a tenancy, security agreement or loan agreement; (b) as regards the security enforcement moratorium, whether a bank would be allowed to issue a collection letter for overdue payment in respect of a mortgage on a specified premises; and (c) the enforcement agencies of the rental enforcement moratorium and the security enforcement moratorium.
The Administration responded that: (a) according to Clause 3 of the Bill, the Bill (if passed) would apply to a tenancy, a security agreement or a loan agreement despite their terms and conditions; (b) as regards the security enforcement moratorium, the lender of a secured loan would be barred from taking, or continuing to take, the actions specified in Clause 7(5) of the Bill in respect of the repayment default;(c) upon receipt of complaints, the Rating and Valuation Department and HKMA would follow up with the enforcement of the rental enforcement moratorium and the security enforcement moratorium respectively.
Mr CHAN Chun-ying enquired about: (a) the comparison of the scope of actions which a lender was barred from taking in respect of a repayment default under the Bill with that of the protection measures implemented in other overseas jurisdictions; and (b) how a landlord would be determined to have fulfilled the requirement (namely the landlord had to reasonably establish that the failure of the tenant to pay rent and the rental enforcement moratorium was the sole reason or a significant reason for the inability to avoid the repayment default) before the protection of the security enforcement moratorium would become applicable.
The Administration and ED, HKMA responded that: (a) the scope of actions which a lender was barred from taking in respect of a repayment default under the Bill was more like the protection measures implemented in Singapore, but the Administration had also included other actions taking into account the situation in Hong Kong;(b) HKMA would assume the oversight responsibility for the enforcement of the security enforcement moratorium; and (c) HKMA was in close communication with the banking sector and would provide detailed guidelines for banks on how to exercise flexibility if the repayment ability of any landlord was affected by the rental enforcement moratorium.