Contract renewal fees violate tenant rights

Friday, July 24, 2009

KYOTO (Kyodo) In what experts termed a landmark ruling, the well-established practice of landlords collecting renewal fees in the housing rental industry was judged illegal Thursday and a violation of tenants' rights.

Key money nullified: Lawyers for a Kyoto apartment tenant who had demanded his landlord return his contract renewal fees and key money face the media Thursday in Kyoto after the court ruled for the plaintiff. KYODO PHOTO

The point of contention in the Kyoto District Court ruling Thursday was the "contract renewal fees" for renting houses and apartments, which tenants are obliged to pay their landlords every time their contracts are renewed.

In many cases, the fees are equal to two months' rent and must be paid by lump sum, putting a heavy financial burden on tenants every few years, in addition to the "key money" that is required when a tenant first enters into a contract.

Legal experts said the ruling is rare in that it is based on the consumer protection law rather than the law to define the rights of landlords and tenants in house deals. The ruling is expected to affect similar lawsuits pending nationwide.

In April 2006, the man made a two-year contract to rent an apartment in the city and paid about ¥110,000 — the equivalent of two months' rent — to his landlord in January 2008, when the initial contract approached renewal. But he terminated the contract four months later and vacated, the court said.

"Reasons for charging contract renewal fees must be clearly explained to tenants and agreed upon between the two sides," the judge said.

Praising Thursday's ruling, lawyers for the plaintiff told reporters later Thursday that the Kyoto case would become a significant step forward to reform the country's housing rental industry, which they said has many traditional unwritten codes and rules not accompanied by clear explanations.

"Renewal fees are charged in a lump sum regardless of the span of contracts. In reality, landlords rarely give advance notice until a renewal approaches in a few months, and tenants are effectively forced to pay the fees," they said in a statement.

People in the housing rental industry, which has already been forced to lower rents because of the recession and land price falls, were quick to slam the Kyoto court ruling.

"This case will surely affect our business," one industry official said.

A spokesman at a Tokyo-based industry group supporting landlords justified the practice, saying renewal fees are part of funds for long-term repair of properties.

Does your doctor judge you based on your color?

John Reid, shown with his regular doctor Neil Calman, says race played a role during an ER visit.

By Elizabeth CohenCNN Senior Medical Correspondent

(CNN) -- John Reid, a retired businessman, came home from a Caribbean cruise a few years ago with an infected toe as a souvenir. As a diabetic, he knew it was serious, so he went to the emergency room near his home in New York City. There, he says, the first doctor he saw ordered an immediate amputation, scheduling him for surgery right then and there.

Horrified, he argued with the doctor, insisting there had to be a way to avoid lopping off his toe. "You'd better bring the head doctor in here," he said.
Reid says the more senior doctor prescribed a long-term regimen of intravenous antibiotics and physical therapy -- a treatment much more expensive and time-consuming than an amputation -- and saved his toe.

Reid, who is African-American, firmly believes that if he'd been a white man, the junior doctor wouldn't have been so quick to order the cheaper and more drastic solution over his objections.
"I think it was very disrespectful. As a matter of fact, I think she was looking down on me," he said. "She just decided that, this guy was a minority [and] we're going to do whatever we feel like doing without consulting you."

Reid says he thinks the young doctor assumed he wasn't smart enough to think through a medical decision. "She just felt like minorities are all the same -- they don't know anything, they're not intelligent, they're not educated," says Reid, a retired real estate agent who once ran his own business with nearly two dozen employees. "If she had known my background, I don't think she would have treated me that way."

CNN contacted the hospital but Montefiore Medical Center refused to discuss his case.

Studies show blacks and whites are treated differently.

While it's extremely difficult to tell in any given situation how much race -- consciously or subconsciously -- plays a role in a doctor's decision making, multiple studies over several decades have found doctors make different decisions for black patients and white patients even when they have the same medical problems and the same insurance.

"It's absolutely proven through studies that a black man and a white man going to the hospital with the same complaint will be treated differently," Dr. Neil Calman, a family physician and president of the Institute for Family Health in New York, said. Calman is also Reid's regular physician.

For example, a 2005 study found African-American cardiac patients were less likely than whites to receive a lifesaving procedure called revascularization, where doctors restore the flow of oxygen to the heart. The study authors at RTI International, a research institute, noted that all of the patients had Medicare, which covers the cost of revascularization.

In a study conducted in 2007, Harvard researchers showed doctors a vignette about a 50-year-old man with chest pain who arrived at the emergency room, where an EKG showed he'd had a heart attack. Sometimes the researchers paired the medical history with a photo of black man and other times with a photo of a white man.

The doctors were significantly more likely to recommend lifesaving drugs when they thought the patient was white than when they thought the patient was black.

Is it racism or something else?

"Racism in health care is a common experience of people of color," Calman recently wrote on his blog.

But he said disparities in medical care are about much more than race. "[Race] is one very important factor in why people get bad medical care," he wrote. "So is poor education, poverty and lack of insurance."

Dr. Cornelius Flowers, a cardiologist at the Emory University School of Medicine, in Atlanta, Georgia, agrees there are several reasons for racial disparities in medicine.

"It's about respect. If a patient is of a low socioeconomic status, a doctor might think, why do I need to go out of my way for this guy? I'll just do the minimum I have to do and send him on his way," Flowers says.

He adds that sometimes African-American patients don't insist on quality care.

"Back in the 1950s and 60s, hospitals in places like Atlanta had a black side and a white side, and the care for blacks was second rate," he says. "People who remember those days still consider themselves second-class citizens, and a lot of times they allow people to treat them that way."

Flowers said times are changing; younger minority patients are more likely to insist on good care, he says.

"Younger people demand better. Younger people demand more," he says.

Studies also show that doctors can be biased against patients because of their body size.

A study out this week from researchers at the New York University School of Medicine found more than 40 percent of the doctors surveyed had a negative reaction to obese people.

"The lesson learned is, I tell people all the time to seek a doctor who will care about you," Flowers says. "If you feel like you have a doctor who isn't genuinely concerned about you, just get another doctor next time."

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CNN's Caleb Hellerman and Sabriya Rice contributed to this report.

Cambodia Calls

MONDAY, JULY 27, 2009
By LESLIE P. NORTON
Barron's (USA)

Checking out Cambodia's nascent economy.

REMEMBER FRONTIER MARKETS? Those in Pakistan and Vietnam, the high-octane sector of the developing world, promising even swifter growth than the more mature emerging markets?

They've been left in the dust this year as investors swarmed to so-called BRIC funds -- those that trade in shares of Brazilian, Russian, Indian and Chinese companies -- as well as to emerging-markets funds. The MSCI BRICs index has returned 53% in 2009, while emerging markets have returned 43%, and the corresponding frontier markets index, just 4.8%. (The Templeton Frontier Markets Fund is up 23%.)

Says Michael Hartnett, Merrill Lynch's global equity strategist: "Interest in frontier markets has lagged because of liquidity issues." But if enthusiasm about growth in China and almost anywhere outside the developed world gathers steam, expect new interest in frontier markets to jump.

David Wilton, chief investment officer of the International Finance Corp.'s private-equity and investment-funds department, thinks a change is already under way: "The mood has shifted noticeably from February. Now the listed equity markets have recovered, and they're thinking about investing."

The latest market to get attention is Cambodia, where a handful of investors familiar with Vietnam and Thailand are trying to set up funds. Cambodia is very poor, with rampant corruption and crony capitalism. But economic growth is robust, even if the economy is just $8 billion. Douglas Clayton, managing partner of Phnom Penh-based Leopard Capital, has raised just under $30 million and is trying to raise more; sitting on his board is markets commentator and Barron's Roundtable contributor Marc Faber.

Cambodia doesn't have a stock market yet, but Clayton believes it could by year's end. There are numerous foreign-sponsored companies, including banks and cell phone operators, though the economy is largely agricultural. The median age in Cambodia is 21, the lowest in Asia. Clayton reckons that about 70% of the population, which numbers 14 million, wasn't yet born during the horrific regime of the Khmer Rouge, estimated to have killed two million Cambodians.

"Cambodia is back open for business," says Clayton, who is applying for citizenship. "This is a failed state that's back on its feet."

Conservative investors aren't impressed. Says Peter Newell, managing director of Vontobel Asset Management: "We look for a $50 million bottom line, low leverage, high ROA [return on assets]. Can you find that in a frontier market? No. Not even in China, not easily."

David Wilton of the International Finance Corp. agrees: Investing in Cambodia may be, as he delicately puts it, "a wee bit nascent," and there are few deals to support private-equity funds. Still, Wilton concedes that the IFC is very close to seeding a fund to invest there.