RENTING A PROPERTY

Signing a tenancy agreement

After selecting a suitable property you will be asked to sign a tenancy agreement, which commits you to leasing the property usually for a minimum of one year. One agent points out that when you commit to a new lease, you are generally committing to 14 months, not 12, because after 12 months you have to give two months’ notice. You will usually be asked to pay a deposit of two months’ rental plus one month’s rent in advance. Most agents will also take a fee from the tenant of a half-month’s rent. Both parties sign two copies of the agreement: one is held by the landlord, the other by the tenant. The documents should be sent to the Inland Revenue for official registration and stamping before being returned to landlord and tenant.

Illegal structures

If you have been promised the use of a roof or balcony and any store rooms there as part of the useable space of the apartment, check that this fact is specified in your tenancy agreement. If it isn’t, then the chances are high that the balcony or roof may be an ‘illegal structure’: you risk losing this space if it is identified as such by a government inspector during a routine check. Usually owners are required by law to remove an illegal structure within a month.

Swimming pools

If your apartment includes the use of an outdoor pool and you don’t plan to stay in Hong Kong long, double-check which months the pool is open because it is usually a comparatively short section of the year.

Stamp duty

This is a fee charged by the Inland Revenue for stamping the tenancy agreement and is usually shared between the landlord and tenant. Some landlords and tenants ignore it.

Break clause

A break clause gives either or both parties the option to terminate the agreement prior to the lease expiry date. The most typical lease in Hong Kong is for a two-year term with a tenant’s option to break the lease after one year. Written notice is required when the tenant intends to break the lease.

Renewing the tenancy agreement

This can be done formally for a new fixed period, but commonly in cheaper properties after the tenancy agreement has expired, the tenant can just continue to pay month by month, with either side giving one month’s notice.

Management fees and government rates

A management fee is paid to the building’s management company to cover the cost of electricity and lighting in common areas, security staff, upkeep of facilities such as elevators, cleaning, and so on. All apartments are also liable for government rates, which are roughly 5% of the annual rental, paid quarterly. When negotiating rental costs, try and ensure that the agreed figure includes government rates and management fees.

Household insurance

Although your landlord will insure your apartment, it is wise to take out contents insurance, covering your furniture and belongings against fire, theft, typhoons and burst pipes. The major banks offer insurance quotes online, or try www1.speedinsure.com (tel. 8209 0020). Other insurers include Eagle Star Insurance (tel. 2967 8393) and AIA (tel. 2832 1800).

Pets

Some apartment blocks do not allow pets, so check before you agree to move in. In many cases, although the tenancy agreement specifies no pets, you may be able to negotiate special permission from the landlord. For more information on pet keeping, see below.