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Lease question - is my landlord trying to pull a fast one??

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  1. #1

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    Question Lease question - is my landlord trying to pull a fast one??

    Had a trawl through the various lease threads but can't find a situation quite the same as mine so thought I'd throw it out to the Geo jury who are more experienced in these matters.

    Basically, we signed a lease on our apartment on 20/09/2009. This is a 2 year lease, as I believe is standard in HK, so is due to run until 19/09/2011. Our rent amount was agreed at the time of signing in 2009, and there is no mention of any break period or renegotiation of our agreed rental amount in the lease agreement. The only break clause is a 11+1 month notice period each way if we / they want to vacate.

    Yesterday I received an email from our landlord stating
    'As the fixed rental period is up on 19/09/2010, let’s get in touch to start negotiations on your new rent and terms'.

    I was under the impression that our rent was fixed at the originally agreed amount until 19/09/2011 as per the signed lease, and there is no mention anywhere of a 'fixed rent period' that expires this year.

    Is this right? Can the landlord make us sign a new or revised contract with higher rent at what is the mid-point of a 2 year lease? If he can, then what is the point of a 2 year lease in the first place if everything's up for renegotiation after year 1?

    Additionally, surely he is obliged to give us more than 11 days notice if he intends to increase the rent?

    I'd really welcome some advice on what tends to be standard practice here and what rights we have (or don't have!) to refuse to renegotiate until the end of our 2 year lease.

    Thanks all!


  2. #2

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    Yes, those 2 years contracts with the ability for either side to give notice after 1 year are a bit daft - in effect they are one year contracts, because the landlord can simply give you notice then offer to re-let to you at a higher rent.

    However, they can't unilaterally increase the rent, all they can do is give you the agreed 1 months notice. You can then haggle for what rent increase would be necessary for them to withdraw the notice. In your negotiations, bear in mind that if the place is empty for even 2 weeks then that loses the landlord more money than a 10% increase given that they would normally have to pay a half month rent to an agent to find a new tenant and pay some cleaning/repainting costs.

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  3. #3

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    Thanks, that's helpful.

    I mean, I understand that if they wish to boot us out and try for higher rent elsewhere they can do so, but I'm not buying it with only 11 days notice! Also, as you say, that seems like a lot of effort for what will be a relatively small increase. As we're at the lower end of the market (especially for expats in HK) I'd be amazed if they could get more than another $1k or so out of the place. Hardly makes the hassle of redecorating worthwhile.

    I've fired back a reasonably worded email pointing all of this out so I suppose we sit tight and wait and see what they come back with.

    Also not happy about the fact that they have 2 month's deposit, and I bet if they give us a month's notice it'll be virtually impossible to get the other month back out of them...


  4. #4

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    They're not giving you 11 days notice. They're informing you that the fixed period ends in 11 days, so lets negotiate. If the negotiations fail, you'll get a month's notice as per the lease (or whatever is on there) to move out.

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  5. #5

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    Quote Originally Posted by kjfarr:
    Thanks, that's helpful.

    I mean, I understand that if they wish to boot us out and try for higher rent elsewhere they can do so, but I'm not buying it with only 11 days notice! Also, as you say, that seems like a lot of effort for what will be a relatively small increase. As we're at the lower end of the market (especially for expats in HK) I'd be amazed if they could get more than another $1k or so out of the place. Hardly makes the hassle of redecorating worthwhile.

    I've fired back a reasonably worded email pointing all of this out so I suppose we sit tight and wait and see what they come back with.

    Also not happy about the fact that they have 2 month's deposit, and I bet if they give us a month's notice it'll be virtually impossible to get the other month back out of them...
    Very normal pratice here in HK (even for low rents. ie I have live in places for 7 / 9 / 11 K and each time it happened). Either you manage to negotiate the rent (we never managed - since the increase where just 'outrageous") or you leave (we did).

    They usually give you back the 2 months deposit without any hassle.
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  6. #6

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    You mention the hassle for the landlord but it works the other way as well. The landlord knows that by the time you have found a flat, paid the agent, moved all your stuff, etc you might just as well pay the extra rent unless it is just too big a rise. That is of course if you can find something similar for less. When our landord recently put the rent up 20% we looked around and we were still under the market price.

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  7. #7

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    Good point.

    A quick scout around this morning has revealed a few places advertised for the same or less than we're currently paying so if push comes to shove we can go elsewhere. Obviously I'd rather not though, so I'm prepared to swallow a reasonable increase to avoid the hassle. I suppose it's just about what the landlord will deem a 'reasonable' increase. We shall see.

    A related question - if we come to a mutual agreement on a rent increase, would I be obliged to sign another brand new 11+1 lease or could we just amend the current lease to include the changes? I'm thinking of being tied in for another year-long contract wheras at the moment we (and they) can just give a month's notice which kind of works in both our favours.

    Thanks for all the responses so far - very helpful and somewhat curbing my initial panic!


  8. #8

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    It's all up for negotiation. There's no requirement ever to have minimum terms if both parties agree.

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  9. #9

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    Ok, that's useful to know, thanks.


  10. #10

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    Quote Originally Posted by PDLM:
    It's all up for negotiation. There's no requirement ever to have minimum terms if both parties agree.
    Agree, if you just agree a change of the rent and do not change any terms of the original tenancy agreement, the lease effectively is on a monthly basis.
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