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Lease Contract and Payment Terms

What details should I consider about my apartment before signing the lease?

Although your ideal apartment might make you want to move in tomorrow, you still need to check some details to ensure a comfortable stay. Does the heating/air-conditioning system work properly? Do ceilings or floors crack? Don’t be afraid to raise these issues within reason. This being said, it is important that these matters are handled delicately so as to avoid making the negotiations confrontational. Often times, a conflict at this stage will put the landlords off entirely. It is best to draw up any reasonable requests and ask your property consultant to work on them. It is important to know if your landlord is reasonable and responsive to any legitimate concerns. Although price may be a big factor in your housing decision, you should consider that a willing landlord can make your stay more pleasant.

What language is the lease agreement and what should I pay attention to?

The lease agreement is usually bilingual (Chinese and English) unless both parties are comfortable with one language. The template is normally standard, you need to pay attention to the lease term, deposit, rent and other charges, termination clause (if any), penalty term, landlord’s ID and ownership certificate and etc. Usually your property consultant will help you go through the lease agreement to make sure your interest is well protected. Make sure that you clearly understand what is included in the rent and what is not, to avoid any misunderstandings later on.

What is the typical lease term?

One year lease is very common. However, a lot of landlords prefer longer lease, especially if you have requests for specific furniture or renovations. If you have a one year lease, you may face rental increase or decrease when you negotiate renewal upon lease expiry. We suggest you talk to your property consultant to evaluate the pros and cons before you make the decision on lease term.

What fees can be included in the rent?

Normally the property management fee is included in the rent, other fees are negotiable, such as club/gym membership fee, heating fee, satellite TV fee, parking fee, internet setup and usage fee, utility allowance and etc.,

How much is the Security Deposit and when is it paid?

The deposit is paid within several days upon signing the lease contract. The common market practice is for you to pay 2 months’ rent as security deposit if the rent is payable on a monthly basis. If you will pay rent on a quarterly basis, the deposit is usually 1 month’s rent, however, some landlords will insist on 2 months’ rent regardless of rent payment terms. Currently there is a strong trend that corporate clients are using Bank Guarantee Letter as security deposit instead of paying cash deposit. Some landlords will accept this depending on who the corporate client is, while other landlords will not. Your property consultant will work with you to obtain the best terms possible.

What is Fapiao and do I need it?

Fapiao is an official tax receipt in China which is issued by the local tax authorities. Currently the tax rate is 5% of the monthly rent. Corporate clients always require Fapiao for tax clearance, but for a personal lease, it may not be necessary unless your company needs it for accounting purposes.

When and how do I pay my rent? Which currency is acceptable?

Rent payment is flexible. The most common way is to pay quarterly (with one month’s rent as deposit) or monthly (with two months’ rent as deposit), sometimes you can also pay every 2 months. For corporate lease, your company will make the transfer. For personal lease, you may pay by cash (a receipt is very essential) or by bank transfer (note: the account number has to conform with the landlord\\\'s information on the lease contract, or at least the account name should be the landlord’s name). RMB is the common currency used for rent payment. Even though rarely accepted, you may be able to pay by foreign currency provided that the exchange rate is agreed between you and the landlord.
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