Some landlords are great. Some landlords are… less than great.
For this week’s “Talk to My Lawyer” column, I’m going to go through the most common issues and complaints we come across at our offices in regards to leases and landlord issues. Read on if you're having a problem in this area.
Firstly, Some Context:
Compared to other bodies of law — labor law and criminal law, for example — contract law, under which lease agreements fall under, is less restrictive of what can actual be allowed in said contracts. It is a legal relationship formed based on equal subjects - ordinary people rather than between the public power and ordinary people. Therefore, with regard to housing lease relationships, including issues such as the payment and refund of the deposit, the amount and payment cycle of the rent, the liability for breach of lease contract, the law allows free agreement between the parties, and rarely intervenes.
Put more simply: whatever is in the contract that was singed by both parties goes. Whatever is in there can be acted up; whatever is not, cannot.
There are a few overarching issues that all housing lease relationships fall under — for example buildings classified as industrial cannot be rented out for residential purposes and vice versa — but generally speaking, the law respects the landlord’s free setting and enforcement of the lease conditions, as long as these actions do not violate the basic principle of the contract law.
Therefore, you’re going to want to be aware of all the issues that might arise before you sign a contract and make sure you work to have these issues resolved in black and white on paper to head off any problems that might arise down the line.
Here are some questions and problems we’ve dealt with over the years vis-a-vis landlords and leases.
"My landlord says I don’t need a contract, is that…"
RED FLAG. RED FLAG. You SHOULD sign a formal lease contract with your landlord. It is also important for you to sign a written contract with your landlord because you definitely want the several key elements to be written down, such as the rental amount, the deposit refund condition, the rental terms, and so on.
You cannot protect your rights and claim for damages if no signed contract existed. And, most important, you’ll need a housing contract to register to the local police station to register for a Foreigners' Temporary Residence Permit (this is mandatory for all you new comers to Shanghai).
"Does the rental contract need to be in Chinese? Is an English contract valid?"
The law will not exclude agreements concluded in English, although it must be translated when lawsuit is brought up and trialing is required. However, for registration wise, the contract generally has to be in Chinese.
"Some landlords ask for several months deposit and a certain amount of years committed to the lease. Can they do that? Is this regulated?"
Article 705 of the Civil Code stipulates that the lease term shall not exceed twenty years. If it exceeds 20 years, the exceeding part shall be invalid.
And yes. As the private owners of the property in questions, within that framework they can ask for whatever. In that situation, it comes down to… well, you should think about if their terms are acceptable to you.
"How do I know the person I’m signing with is the landlord and has the right to rent it out?"
Absolutely confirm that the person you are dealing with has the legal right to rent you the place. You should ask the other party to issue an ID card and a real estate certificate (房产证) before signing the contract. If he is the landlord, then the name on his ID card should appear on the real estate certificate.
"What’s the deal with second landlords? is that legal?"
Nowadays many apartments get rented out by companies that rent apartments from landlords, renovate them and rent them out at a higher price. Those are called Second Landlords. The law does not prohibit you from renting a house from a subletter, provided that he must have the right to sublet. If you find out the lessor is not the property owner by comparing its name with the real estate certificate content, then you should ask the person or enterprise to show you the letter of authorization or other similar legal documents signed or chopped by the actual owner of the property to prove that the person or the enterprise have the right to lease the property.
Get photocopies of all of this.
"Someone suggested I should register the lease at the Social Affairs Center? What’s that? And how do I do it?"
Your landlord should register the rental contract with the Social Affairs Center (社区事务受理服务中心). It will only take him a few minutes through the “Yi Wang Tong Ban” mini-program. Everything is on a smartphone these days. Others the landlord can choose to go to district level Community Affairs Service Centers directly.
These are government organs dealing with administrative matters of each local community.
What should they do this and why is it good for you? If your lease contract has been officially filed, then when someone else wants to buy the house, the law will assume that he should know there is an existing lease in the house. Therefore, as long as your lease contract has not expired, you can ask the new owner to continue to perform the remaining lease contract period.
What we mean is they can’t kick you out unless they pay you out.
When negotiating with your landlord, either directly or through your property agent, bring up this issue and get it sorted.
Which brings us to…
"My landlord just sold the apartment I am living in to someone else. What are my rights?"
First, you should look at your contract to see whether you have agreed to move out when the apartment is sold to a third party. If you did not, and the lease contract has been registered with the government organ, then you can pursue your right against the new owner to continuously stay in the apartment and refuse to move out. If the lease contract was not registered, you have no right to claim against the new owner as he may be a bona fide third party, instead, you may have to move out but claim your loss to your previous landlord. Such loss could be any cost you spend to find a new living place and any balance of the rental.
"My aircon is broken and my landlord doesn’t want to fix it. It’s now 8 degrees in my living room, and it’s impossible to live in the apartment now. What can I do about this?"
If it’s an essential feature that makes it impossible to live in the apartment, you can hire someone to fix it and keep the invoice of any payment you made. You can claim that payment plus compensation for any direct damages against the landlord by suing him at court if he refused to pay it back to you.
"There's a new stinky tofu restaurant downstairs. I don’t like the smell. What can I do?"
It will largely depend on the clauses in your lease contract. If you cannot find anything helpful from your contract to deal with the restaurant, here are suggestions:
Try to find out whether the property downstairs can be rented out for open-fire cooking. You can find it out by asking your landlord, your property service company, your neighbors, the shops beside the restaurant, etc. In many cases those properties underneath living apartment are not allowed to be rented for flame using restaurants and if you find it so, you can directly report to 119 (fire control), or the public service hotline (12345).
Try to find out whether the restaurant has an appropriate operation certificate. The law request a restaurant to present its restaurant operation certificate at open space where public can see it. Take a picture and have a look to find out whether it is valid and with the right address, name of the restaurant, contact information, etc. If not, feel free to report it to Market Supervisory Authority through the public service hotline (12345). You can also find out the direct number of the local Market Supervisory Authority by calling 114 to ask.
"My neighbors are noisy, are terrible, are up to shady things!"
Of course you don’t have to endure the rude behavior of your neighbors!
Construction noises driving you crazy? Well, there is a law in Shanghai that prohibits noisy renovations or other behaviors that generate loud noises around residential areas before 8 in the morning and after 6 in the evening. Therefore, if your neighbor happens to be renovating the house or having a loud house party during those hours, and the noise generated is too disruptive, you can call the police.
"I’ve painted the walls in my living room, now the landlord refuses to return my deposit when I move out."
Yeah, that’s how they get ya. You should not paint your walls or make any changes to your apartment unless your landlord permitted you to do so or the lease contract allows you to. However, the actual amount of compensation the landlord gets from your deposit depends on how much it costs to rectify the “damage” — the cost for hiring someone to paint it back. You can file a lawsuit against your landlord to claim back the balance part of the deposit.
Don’t be drilling holes in walls. Don’t be throwing away furniture. Don’t be making huge adjustments to the space without clearing it first. And keep a record of those conversations.
"The Landlord is cancelling my lease because they say I am not staying there enough!"
This is a problem lately with COVID, quarantines, and people not being able to get back in the country. To protect yourself, check to see if your leasing contract includes a “Long-Term Vacancy” clause. This would allow the landlord to take back the house and cancel the lease agreement if the tenant has left the house vacant for a long time without using it. This allows the landlord to can cancel the lease contract, confiscate the security deposit, and/or the landlord can at anytime enter the house and dispose of the property in the house, regardless of whether the tenant is still paying the rent for the house.
Second, please make sure that you have clearly informed the landlord in writing before you may leave the house vacant for a long time, and seek his help and understanding, and ask him to help you receive letters, close doors and windows and other facilities, and conduct regular inspections to prevent unexpected situations in the house that was not discovered by you and may ultimately cause high losses.
Finally, please try to take pictures of your water meter, electric meter, and gas meter to prevent others from using these resources secretly during your absence.
We have encountered such cases before!
"My landlord just shows up to my apartment for a visit without even telling me first. Is that legal?"
Unless your contract provides and grants it to be thus, it is not legal to enter the private property that is legally occupied and used by you without your consent. The landlord may do so legally by providing a good reason such as an act of rescue (putting out a fire) or necessity (your apartment is flooding) but should provide enough evidence to support it. Minor reasons such as to check and clean the apartment or to turn off the lights? No go.
"My landlord says if I need an invoice, I have to pay the tax. Aren’t landlords required to pay the tax by law?"
For leasing a property and earning income from that activity, the landlord should pay tax. A landlord that does not issue invoices is actually suspected of tax evasion. The tenant can report to the district tax bureau where the property is located. Once verified, the tax department will impose corresponding penalties.
In reality, however, landlords will usually add the tax amount to the rental fee if a tenant requires an invoice.
"My contract is up and my landlord want to double the rent. Is that legal? Are there any limitations to how much a rental increase would be?"
Check your lease contract first and see what it says. If you do not find anything relevant, you may not prevent your landlord to withdraw the property after the contract is up and resubmit it for a new negotiation. Sorry. Life is hard sometimes…
Jin Wang and his team are part of one of China's largest law firms, Duan & Duan. He's lived and worked overseas for more than 12 years in Australia, Singapore, the UK, and US. A ton of experience working with foreigners, and speaks English fluently. When you need a lawyer, Jin Wang is uniquely positioned to help expats in China because he's a licensed Chinese lawyer who speaks English fluently, and has experience working internationally, and locally with expats and foreign owned enterprises. He works with both individuals on private matters, as well as with large international enterprises for corporate law. If you need a lawyer that specializes in foreign and international legal issues; or need specific help with civil issues (like your landlord!), labor law, commercial and contract law, or perhaps for criminal defense help, visit Jin Wang's listing here to get in touch.