With mall landlords and tenants in limbo, is it time for a Malaysian Covid-19 Act?

KUALA LUMPUR (April 18): Non-essential retailers have been instructed to remain shut during the Movement Control Order (MCO) for a total of six weeks from March 18 to April 28.

Some landlords have been gracious enough to provide rent waiver or a discount to their tenants, while others are not.

With Covid-19 declared a pandemic, social distancing has become a norm; the fear of being infected is keeping shoppers away and retailers are not expecting to see the return in footfall at malls to pre-MCO levels anytime soon.

Many are expecting a full recovery of the industry to take up to a year.

With such a gloomy outlook, what recourse do these retailers have?

How long can they continue to pay rent and wages when they have no income or very low income?

For how long can shopping complex landlords continue to provide a discount?

The Malaysia Retailers Association has requested the government to declare the Covid-19 outbreak in Malaysia as a Force Majeure and to introduce a Covid-19 Bill to obtain temporary relief for businesses who are unable to fulfil their contractual obligation.

Countries like the UK, Hungary and Singapore have already done so.

Some from the legal fraternity are in support of a Malaysian Covid-19 Act so that businesses are able to obtain at least a six-month moratorium so that they can focus on reviving their businesses instead of worrying about potential litigation and how to pay their rent.

Will Malaysia enact such a law? With the next Parliamentary sitting scheduled for May 18, how soon can we have such an Act come into force?

What about real estate investment trusts (REIT) that are focussed on retail — will it be worth investing in them now? Would a diversified or industrial REIT be a better bet instead?

Stay calm. Stay at home. Keep updated on the latest news at www.EdgeProp.my. #stayathome #flattenthecurve

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