BEIJING: China‘s authorities said on Monday they would step up supervision of leasing firms and how they collect rental income and deposits, after a series of cases where tenants were evicted when leasing companies failed to keep up payments to landlords.

Leasing companies often require tenants make rental payments up to a year in advance. But last year several leasing firms failed to pass on rental payments each month to landlords, leading to arrears, evictions and a public outcry.

The central government has been encouraging the development of the rental housing markets to help solve a housing problem in big cities, where home prices remain high.

Under rules issued by government entities including the housing ministry and the state planner, leasing companies should not collect more than three months of rent at a time and rental deposits should not exceed one month, with all funds held in an account under official supervision, state media reported.

It also said leasing companies would not be allowed to use rental funds for other purposes and should not encourage tenants to take bank loans to cover their rental payments.

The regulations also required local authorities to monitor and adjust rental rates appropriately.

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