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Lease renewal norms

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  1. #1

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    Lease renewal norms

    My rental contract is up for renewal in early December. This existing contract was for two years, with a 6 month break clause. My landlord is now saying that he wants to renew the contract for another two years, locked in for the first 12 months. Is this normal? It seems counter intuitive to be going from the current position where both parties can leave the contract with two months notice to a situation where I am locked in again for 12 months.

    I love the flat and the area I live and the landlord's proposed rent increase is also reasonable. However, there is a small but realistic possibility that I may need to change jobs in the next 6 months, which could potentially make my commute untenable and mean I'd need to move neighborhood. In other countries whenever I've renewed a lease it has been on a rolling basis (ie, new two year contract with new rent, but either party can give two months notice to exit the agreement). Am I being unreasonable to propose this to my landlord?? He is pushing hard to have a one year fixed period so I'm interested to hear if this is normal in Hong Kong.


  2. #2

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    Quote Originally Posted by MrSapSap
    My rental contract is up for renewal in early December. This existing contract was for two years, with a 6 month break clause. My landlord is now saying that he wants to renew the contract for another two years, locked in for the first 12 months. Is this normal? It seems counter intuitive to be going from the current position where both parties can leave the contract with two months notice to a situation where I am locked in again for 12 months.
    This is normal for HK, no rolling leases, each 2 year lease is new with the same terms each time (apart from the rental price of course!)
    JAherbert likes this.

  3. #3

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    Yes, perfectly normal.

    You are free to negotiate with the landlord, but if he sticks to what he wants you are free to decide to find another place to live.

    JAherbert likes this.

  4. #4

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    What stickyears says - but, each lease is new and the terms and conditions may also be different. 1+1 leases have been common for last several years.

    The market is uncertain and the landlord wants to lock you in. You may have a little bit of wiggle room, if you're willing to pick up and walk away from your current place.

    JAherbert, MandM! and AsianXpat0 like this.

  5. #5

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    Yes it’s usually 24 months, 13 months fixed for each renewal unless you negotiated differently.

    JAherbert likes this.

  6. #6

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    Also pricewise they usually add on a little to bring it closer to market rate. With the current situation you might be able to lock in a lower rate at least for a year. Most importantly, you love the place, and you only possibly may get a new job in six months. Worst case your commute isn't great for 6 months which isn't that big a deal. Unless you move to a serviced apartment for 6 months, and then when/if you get a new gig in 6 months you get another flat. Which doesn't make too much sense for me since moving kinda sucks.


  7. #7
    bdw
    bdw is offline

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    You are not being unreasonable to propose what you want to the landlord, but also the LL is not being unreasonable to deny and request another fixed term. Think from his point of view, he wants the stabililty and guarantee that a fixed period provides. It's really up to both of you to negotiate what you want.

    But if your future plans might be changing in 6 months time and you need the flexibility, then you really NEED to negotiate hard with your current landlord, because this will be much easier than trying to find a brand new place on a short 6 month fixed period. Think all the advertising, real estate fees, cleaning fees, etc that a landlord has to pay to find a tenant, so they normally would not accept such a short lease. But when it's an extension of current lease, they don't have any of this hassle so many 'normal' landlords would be OK with it.

    So I think you really need to negotiate this point now with your current landlord. Maybe offer a little higher rent to have the flexiblity to leave when you want with 2 months notice, be honest and tell him you might be changing jobs in 6 months, then thinking from his point of view why not accept and no loss to him. All the fees and shit he has to pay to find a new tenant can at least be delayed by 6 months. So I would call his bluff and insist on a more flexible extension.

    shri, chichow and AsianXpat0 like this.

  8. #8

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    you can always ask to make it 6mth fixed and 1.5y float.. but that means you can get kicked out in 6mths if the rental market picks up suddenly or landlord decided to sell the apartment etc... or if landlord insists on 12mths then you just can't get it extended..

    z754103 likes this.

  9. #9

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    It's whatever you two agree on.

    If the landlord is not in HK, they might want a more stable tenant. But it might be better to rent out the place next summer (for the landlord) so perhaps you could ask for 6 months extension only with one or two months notice to quit.

    Many expats negotiate an expat exit clause where if you need to leave HK you can break the lease with a notice regardless of within the fixed period or not.

    z754103 likes this.

  10. #10

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    Mar 2016
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    Thanks all for your thoughts - sounds like the landlord's proposal of 12 month fixed is just the market norm for renewals and I'll have to come up with a pretty good argument as to why he should accept my rolling notice or 6 month break.

    It's frustrating, as it looks to me like a lose / lose if he insists on a 12 month fixed period. The lack of flexibility pretty much forces me to leave the place I want to live, and he loses a tenant who always pays on time, doesn't damage the property, agrees with his rent increase and has every intention on staying for the long term if at all possible (I'd estimate 80% chance I'd still logistically be fine to be living here in 2 years). His current proposal means he is going to have a vacant period from December onwards while he goes through the time and expense of finding a new tenant (in a village where I know of at least 3 or 4 properties of the same size that are currently sitting vacant) in potentially the most uncertain time in a decade for property / rental market.

    Almost more frustrating is that even viewing from his side, I can't even understand what he hopes to achieve by insisting on a 12 month fixed period (especially if he knows that doing so is likely to force me to leave). I don't see why he'd prefer to look for a new tenant in December (for certain) rather than accept my proposal and have the likely situation of no change for two years and worst case situation of having to find a new tenant in 5 or 6 months.

    Anyway, thanks all.


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