City to Look into Making Regulatory Laws to Handle Housing Trust Companies
Due to the recent disappearance of a housing trust company that is based in Shenzhen that owed rent payments to homemakers, raised concerns on the supervision of the city’s housing trust market. Industry insiders are saying that the city is in need of regulatory laws.
A local housing trust company that was hired to administer rent payments on several properties failed to give homeowners their rental incomes for several months now. This resulted too many homeowners asking tenants to vacate their homes thinking that they failed to pay their rent. The tenants felt violated since they have paid their rent to the housing trust company. And due to the disappearance of the housing trust company have greatly affected the relationship of the homeowners and tenants.
A person familiar with the housing trust system said that most of these companies are using the business to collect large amount of cash as quickly as possible. He also said that these companies get leases from homeowners charging high prices that the rent collected from tenants. These deals help the company collect the necessary cash which includes deposits and rental payments. Then the company invests the cash in high risk and high reward investments such as stock markets and loans.
If the investment goes well the company can cover their losses in the housing trust business and at the same time gain huge profits, but if the company goes bankrupt they just pack up and leave. Currently the city has no rules which regulates local housing trust companies and are advising home owners to take extra precaution in handling their rent management.