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SCMP Reporter

BEFORE committing to a lease on an apartment, tenants should clarify their rights and obligations under the lease with the landlord.

  FDC Services, real estate agent and publishers of the guide for Hong Kong newcomers, Setting Up In Hong Kong, said the process of signing a lease was fairly simple once set in motion.

  FDC Services general manager James Moore said, however, it was very important for the tenant to clarify who was responsible for maintenance of the apartment and what items were covered by the management fees.

  Mr Moore said it was important to be practical when choosing an apartment and people should ensure it was close to shops, public transport and whether there would be excessive noise from traffic or nearby building sites.

  And although demand was outstripping supply for rented luxury accommodation, Mr Moore advised looking at as many apartments as possible until the tenant found their ideal home.

 Leases for residential property in Hong Kong are usually for two years, with two months rental put down as a deposit. This is returned by the landlord when the lease expires, although no interest is paid on the amount.

  Solicitors usually negotiate the terms and cost of the lease. Stamp duty is usually split between the landlord and the tenant.

  Many leases are put in a company name. This allows the company to sub-let the apartment to its employee, a useful option if the employee is transferred to another country before the lease expired.

  Mr Moore said as leases were usually for two years, tenants would be advised to get a break clause written into the lease. This usually provided for an exit after 12 months as long as two months' notice was given.

  In many cases, tenants can extend their lease for, generally, another two years.

   They are given a notice asking if they wish to re-lease the apartment six months before the lease expires.

  FPD residential manager Isabel Michie said the rent, which was fixed at a monthly rate over the two years, would then be re-negotiated.

  Ms Michie said if a tenant was in doubt about the fairness of the increase, which should be similar to other apartments in the building, he or she should consult a real estate agent.

  Despite the horror stories about Hong Kong landlords, many agents said most were reasonable and the larger property developers and owners often enjoyed exceptional reputations for managing their developments and charging consistent rents.

  Mr Moore said most landlords were receptive when it came to replacing worn out utilities but a tenant should be clear on his leasing conditions.

     ''Really a tenant should check the state of the apartment before moving in and check with the landlord whether certain items will be repaired or replaced before the lease is signed,'' he said.



The rights and wrongs of occupancy