State media has called on Chinese officials to draw up regulations to govern long-term property leasing, so that operators of profiteering platforms such as Danke Apartment will not be able to escape the law.

Operators who ran away after their company became cash-strapped should be heavily penalized, the official Xinhua News Agency said in a Monday commentary, published just two days after it ran another piece on the same issue.

Xinhua was responding to a scandal last month in which people who rented apartments through Danke realized their landlords had not received their payments but failed to reach the home-letting agency for refunds. The Beijing-based, United States-listed Danke is rumored to be facing bankruptcy.

Danke made profits from requiring tenants to provide six months to a year’s rent up front, and then paying the landlord only monthly or quarterly, according to a Guangzhou Daily report. The arrangement was made possible by teaming up with financial institutions that offered renters loans to pay many months of rent at one go, it said.

The leasing agency then used the money for investment, the report added. Mainland China had about 300 similar platforms between 2016 and 2018, it said.

The COVID-19 pandemic, which led to falling rental rates, had exposed financial strains in these platforms, Xinhua said in a post on Weibo, China’s microblog site.

An experienced housing dispute lawyer told Guangzhou Daily that rogue operators usually faced only a slap on the wrist when their businesses went bust, so the punishment had little deterrent effect.

Hu Jinghui, who ran a property management company in Beijing, said managers were often subjected to only civil penalties, such as restrictions in spending. The soft regulatory approach had allowed “minor wrongdoings” to develop into big threats in society, he said.

Click here for Chinese version

---------------------------------

Apple Daily’s all-new English Edition is now available on the mobile app: bit.ly/2yMMfQE

To download the latest version,

iOS: bit.ly/AD_iOS

Android: bit.ly/AD_android

Or search Appledaily in App Store or Google Play