The moment you have found the house of your dreams, the next hurdle pops up … securing it by means of a contract! Let me explain how it works and give you some tips.
- There is a standard government lease contract but some landlords add their own clauses, so make sure you understand what you’re signing and read carefully! Special clauses can be for instance about who needs to pay for repairs, ban on subletting, or having pets in the house.
- Usually the contract is for 2 years with a break clause after 1 year from one or both sides. Note that many landlords take this as an opportunity to increase the rent after year 1. Rent increases are not regulated in Hong Kong and therefore its up to the market and your landlord.
- Hong Kong landlords will ask about you and your background before they sign you a lease. They rather prefer to have a good tenant, and keep the apartment empty if they have to in order to find the right one. What qualifies as a ” good tenant” is of course up to them, but some do or do not want families/pets/certain nationalities/professions etc. Making a good impression on your landlord will definitely benefit you.
- For signing the lease you’ll need a copy of your HK identity card (to prove you are allowed to reside in HK) and your company’s letter of employment (to prove you are able to settle the rental). Two copies of the contract are sent to the Inland Revenue for official registration. The state collects a stamp duty fee, which is shared by you and your landlord.
- The standard security deposit in Hong Kong is worth of 2-3 months’ rent and will be refunded if there is no breach of any of the contract, including the often used paragraph which states that in the case of loss or damage (other than from normal wear and tear), the landlord is eligible to deduct the total amount of the loss from the security deposit. Most landlords will also require a month rental before signing the contract, which will be settled with the first month rent later. That makes that in total you need to pay at least 3 times worth the monthly rental upfront. Budget for this!
- Use your negotiation skills! Prices, conditions and start date of the agreement are negotiable. A recent poll showed that most tenants get up to 8 days as a rent-free period! Although it seems that the bargaining power is at the landlords side, don’t take that for granted.
Reach out to ExpatWise for more tips or if you want to know if something is common practice or not!