Understand Your Lease Before Signing on The Dotted Line

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You are new to Beijing and it takes you a moment to take in all the grey buildings looming over you. But you know behind every grey facade is a possibly tasteful, even elegant apartment decked out to your liking. Agents upon agents are in hot pursuit as they smell an opportunity, sending you tons of pictures along with price listings, insisting you must see this property or that before it’s snatched up. But you are undecided. Do you settle for a cozy hutong loft or a modern high-rise apartment? Who do you even speak to about the apartment after you view it? Who is truly running the show; the agent or the landlord who you never meet? And what if issues should arise? Who do you speak to? The agent? The landlord? And that is how you come close to your first nervous breakdown.

Welcome to Beijing’s renters market, where up is down, down is up, housing agents are kings, and if you don’t know any better, your landlord might take you for a wild ride. I exaggerate of course. But let us delve into the murky waters of renters’ rights in Beijing.

I Am Landlord, Hear Me Roar

Up until very recently, I believed landlords had absolute power. This is also the prevailing sentiment amongst friends living in the city, who try to keep their landlords as happy as possible to avoid a possible surprise eviction. Not so, says Matthias Schroeder LL.M, a lawyer based in Beijing.

According to Schroeder, the landlord’s rights and powers are far more limited under the law than you might realize. Landlords only have the right to collect rent, review and approve renovation plans to the house, and recover the house after the termination of a lease. But what about getting your deposit back at the end of a lease? First of all, don’t leave the country too fast. Renters in a hurry to leave the city or the country generally have no recourse should an unscrupulous landlord withhold their deposit. “We have seen cases where the landlord did not bother paying back the deposit. The cost of such a claim might be higher than the deposit itself. This becomes an issue, because, even in case the claimant wins the case, in most cases, the losing party will not have to pay all the attorney fees of the winning party. Therefore it is cheaper to not even bother.”

This is admittedly an extreme case, and a reasonable landlord should not only reimburse your deposit but may also calculate and reimburse all paid for but unused utilities such as water, electricity, and gas. They should also reimburse any repairs you may have carried out on the property that are not aesthetic, and provided that you have kept all receipts and fapiaos. This means that you can’t charge your landlord for the cute little bookshelf you decided to install yourself, as that will be considered a personal expense, however, if the apartment came with a broken shelf that you decide to fix, you can ask for a reimbursement.

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What’s the Contract Got to Do With It?

You have come to the end of your lease, but you love the place. You haven’t had much of an issue with the landlord and you wish to extend your contract. But you are met with a flat ‘no’. Is it another tenant? Does he want to increase the rent? Don’t be surprised if this happens. The landlord is well within his rights not to renew a lease, provided that he gives you ample notice to vacate the premises. “In the last six years in Beijing, I had to move three times with my family,” says Schroeder, “It is just a question of luck, how long you may stay in your flat. The landlord is not obliged by law to renew the contract in most cases.”

And don’t be surprised to receive a notice to vacate your apartment shortly after moving in because the landlord has either decided to move in himself or has sold the apartment. If you are lucky, your lease might be transferred, but in most cases, you will have to vacate. All is not lost though. According to Schroder, “As a penalty for breaching the contract and terminating it prematurely, most standard contracts foresee the payment of two months of rent.”

Biting the Bullet

It might be surprising for foreigners to learn that in cases where our rental rights have been contravened, we can actually represent ourselves in court. “If the landlord breached the contract by not giving notice in time or by prematurely terminating the contract without having the right thereto, you may file for damages. A lawyer is not necessary for doing so as you are allowed to represent yourself, and the court clerks will help you with the filing,” elaborates Schroder.

However, and this is very important to note, if a contract is written in both English and Chinese, and there is no clause stipulating otherwise, then the prevailing version is always the Chinese version. This could be a problem if the terms in the two contracts do not match, which is not unheard of.

Whatever the situation, it is a relief to know the renter’s market in Beijing isn’t as much of the wild, wild East the urban legends suggest. Be it using your landlord’s desire to increase your rent to renegotiate your lease, or even taking the plunge and representing yourself should things go south, there is always a solution. You just have to know where to start, and where to go should things end badly.

Here Are a Few Things to Keep in Mind Before, During, andAfter You Sign on the Dotted Line:

1. Check the landlord’s house property certificate and his ID card to confirm that the house belongs to him and that there is no overdue mortgage on the apartment. Foreclosure would terminate your lease agreement without     compensation.

2. Document the status of the apartment with pictures and witnesses. Note any damage,     even minor, on the ‘handing over’ list, which must be attached to the     rental contract.

3. Only sign a lease contract with the house owner or an authorized person, not     with the current tenant or the relatives or friends of the house owner.

4. Make sure the landlord issues a proper rental fapiao and clarifies who has to     pay the respective taxes.

5. After signing the lease contract, register at the police station in a timely fashion.

6. If you do repairs, document them; and collect all the bills and fapiaos.

7. If you can afford it, or your living expenses are covered by your employer, insist in an arbitration clause. Although expensive, in the event of a dispute, arbitration is faster than the court system, and the parties can influence the proceedings better.

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Photos: Unsplash 

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