Beijing to crack down on abusive landlords and online rental platforms

As anyone who has ever rented an apartment in a Chinese city can tell you, the tenant is always the sucker. Renters are often asked for three to six months of deposit, which can be tough to get back, and they enjoy no clear legal rights while often being subject to sudden evictions from landlords.

New internet-based rental companies did not help much and sometimes harmed: A 20-year old user of Danke Apartment, an online rental platform, committed suicide because the company’s financing innovations had left him with an angry landlord after he had already paid a year’s worth of rent online.

So many Chinese urbanites will be pleased that the Beijing city government has released a set of draft housing leasing regulations (in Chinese), following a similar set of draft rules (in Chinese) issued by the southern tech boomtown of Shenzhen last month.

• The draft regulations have been published for public comment after which they will be enacted.
• Some of the new rules are local applications of the Ministry of Housing and Urban-Rural Development’s draft housing lease regulations released (in Chinese) in 2020.

What will the new rules do?

The regulations will enable to Beijing to:

• Ban landlords from collecting more than a month’s rent at one time, and limit deposits to a maximum of one months rent;
• Make escrow accounts required for leasing companies and online platforms to hold customer deposits;
• Punish rent gouging and other abusive practices by landlords, real estate companies, and online platforms.

Why is this happening?

The specific context of the new rules: “Chinese regulators have been stepping up regulation of the rental market after the collapse of Danke Apartment,” notes Caixin: “So far this year, central and local governments have issued nearly 50 new policies on residential leasing. Last month, the housing ministry and seven other regulators launched a probe into violations by property developers and leasing companies.”

The bigger context: Xí Jìnpíng’s 习近平 government is making an aggressive opus to rewrite the social contract and force companies to treat ordinary consumers better and reduce inequality. See for examples these news stories China from today:

• Pinduoduo, China’s largest online retailer, pledged to donate 10 billion yuan ($1.5 billion) to revitalize agriculture. This comes after a number of other enormous philanthropic donations made in recent months by tech companies and their founders.
• ​​Beijing is testing a job rotation program for teachers in the capital’s schools to make education more equitable.