The Lease

After the tenant and landlord sign the lease agreement, the landlord is required to register the lease with the local district authorities. This rarely happens, however, because landlords want to avoid the resulting stamp duty of 0.1% of the rent (which, if required, is shared by both tenant and landlord). Municipal officials don’t seem to press the matter. However, if you’re on a housing budget, your company will require a monthly fapiao (receipt) from your landlord. This incurs a 5% tax for each fapiao, so your landlord may make excuses. You may have to bargain a small increase in rent.

Most leases require tenants to give one month’s notice of early departure. Early lease termination usually means the tenant loses the two-month security deposit, unless there is a ‘diplomatic clause’ in the contract (originally for those in the diplomatic service who may be called away suddenly due to political problems, a diplomatic cause is also referred to as a ‘break clause’). A break clause allows the tenant to leave without sufficient notice and still receive the original deposit.

If the tenant has fulfilled the lease obligations and has not damaged the property, he or she is entitled to have the full deposit returned no later than 30 days after moving out.

A tenant may request an English version of the lease, but keep in mind that most local agents’ English leases are merely poorly translated and abridged versions of the Chinese original. If disagreements arise during the lease period, only the Chinese version is legally binding so it may be worthwhile having someone translate the lease for you if your language skills aren’t up to par. The real estate agent often arbitrates any disagreement. If no compromise can be reached, real estate conflicts can be hashed out at the China International Economic and Trade Arbitration Commission of Shanghai (28 Jinling Xi Lu; 6387 7878). Be forewarned, however, that if the disagreement escalates into a full-blown legal action, foreigners rarely get the upper hand in property disputes.­­­­

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