Agency Fees
Property agents who locate premises and help to negotiate and conclude lease/purchase agreements charge a fee for their services. The purchaser / Tenant pays these fees by either 1% of the sale price or 50% of the monthly rental fee.
Short-term accommodation (less than a six-month period) is charged on a case-by-case basis.
Break Clause (Early Termination)
Normally requested by the Tenant. Landlords may grant a Tenant the option of early termination of the Tenancy by giving prior written notice of one month. This provision is negotiable and normally depends on prevailing market conditions.
Car parking
Provision for one car parking space usually included in the rental price.
Deposits
Holding deposit
Holding deposits are paid by a potential Tenant in order to secure the option to lease a property whilst details of the Tenancy Agreement are negotiated. It is advisable to ask for written confirmation that this deposit is refundable.
Security Deposit
The security deposit is usually equal to two months’ rent and is retained by the Landlord for the duration of the Tenancy. This deposit is returned in full without interest, provided that there is no damage to the property beyond usual wear-and-tear.
Duration of Tenancy (Lease)
A standard lease usually lasts for two years. Occasionally, three years may be agreed upon.
See also Break Clause
Fixtures and fittings
Residential properties are generally let unfurnished. Kitchens are usually fitted but often without appliances.
Floor area
For rental, floor area is usually quoted on a gross basis, however, definitions can vary as to what is included in the net usable area. Note that gross area generally includes common parts such as stairways and lift wells.
Legal Fees
Legal Fees are based on Law Society scales. Each party usually pays their own costs, however, fees may be shared if both parties engage the same law firm.
Management Fees
Management Fees normally cover building maintenance, security and cleaning services. Fees vary according to the standard of the building and facilities available. Management Fees are generally charged in addition to rent, payable by the Tenant.
Protection of Tenancy
Please refer to Landlords & Tenants Consolidation Ordinance, available at Government Publications Office.
Rates
This tax is paid – generally by the Tenant – upon the occupation of the property. It is levied as percentage of a Government Fixed Ratable Value (presently about 5% of the rental value).
Rent
Rent is always payable to on a monthly basis, in advance.
It usually excludes utilities (water, gas, electricity), Government rates, Government rent and management fees.
Rent-free period
Some Landlords might allow Tenants to decorate their premises – it not managed by the Landlord – during a rent-free period
Note that rent-free periods are more common in commercial leases where Tenants tend to pay for renovation costs.
Stamp Duty
Stamp duty is payable on all Tenancy Agreements. The fee is usually shared equally between the Landlord and Tenant.
The format of a Tenancy Agreement varies but usually the Tenant is responsible for the interiors and the Landlord is responsible for the structural parts of the property.
In case of any alterations made to the interior by the Tenant, the Landlord normally expects the property to be returned to its original condition on the expiration of the lease.
Tenancy Agreements are signed by either individuals for a personal lease, or by a company for a company lease.
The Tenant
A personal lease is signed by an individual whose name (or joint-names) appear as the Tenant in the Tenancy Agreement. The Tenant is personally responsible for matters concerning the property (please refer to Tenancy Agreement).
For a Company Lease, The Occupant of the premises is usually a bona fide Employee of the Company. The Company is the legal Tenant responsible for matters concerning the property (please refer to Tenancy Agreement).
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