Danke Apartment, operated by New York-listed Phoenix Tree Holdings Ltd., one of China’s largest rental specialists, is struggling to stay afloat after running short on liquidity. Danke sourced apartments from property owners mainly in China’s metropolises and paid them monthly rates normally higher than the market price. It collected rent from tenants on an annual basis after renovating and furnishing the units. The business model has recently gone awry after many apartment owners did not receive rental income for months. It enraged both landlords and tenants who were asked to vacate the apartments. To better protect the rights of consumers amid an already chaotic rental market, it is time for financial supervision agencies to mull stricter financial rules to prevent such practices from happening again.
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