From 18 February 2018 some amendments to the Civil Code, related to lease contracts, came into effect. The amendments cover tenancy agreements for residential properties, shops, offices and parking spaces. The amendments are only applicable to lease agreements executed after the 18 February. For both tenants and landlords alike, it will be important to become thoroughly familiar with the new requirements.
In summary, these are:
Lease duration
- Landlords can only terminate a lease agreement unilaterally at the end of the lease period, by giving the required 90 days’ notice, as long as the agreement has lasted for at least 3 years.
- Previously the arrangement was for at least 2 years, so this additional year gives tenants more protection.
In practice it means that even though a lease agreement between landlord and tenant is for say, 2 years, should the tenant wish to extend to a third year, they have the right to do so – and at the same terms – unless it was originally agreed in the lease agreement for new terms to come into effect for the third year.
- If the landlord fails to give the required 90 days’ non-renewal notice prior to the expiry of the 3 year lease agreement period to the tenant then the tenant will have the right to continue leasing the property for a fourth year, and at the same terms.
Certifying signatures by notary
- All lease agreements are to be in written form, and both the landlord and tenant signatures must be certified by a notary – either at a public notary or by the notary at a private law firm.
Two procedures to have the signatures notarized:
1/ Both landlord and tenant can attend in person at the notary.
2/ Neither party need present themselves in person; as long as they provide their agent with their original passport or other identification document that contains a specimen of their signature, this will be accepted.
- It should be noted that the notary will not certify the signatures unless the lease agreement has been stamped – i.e., that the landlord has paid the Tax Department the required stamp duty to cover the whole duration of the lease period as stated in the agreement.
- In practice this means that there is the added complication for landlords living overseas. After the stamp duty has been paid, the tenancy agreement will need to be couriered to the landlord who will then have to have their signature notarized by a notary in their country of residence, and return the notarized document to Macau. (All being well, the notary in the landlord’s country of origin is accepted by the Macau authorities!)
- An alternative approach is for the landlord to give authority to a person, such as his real estate agent, to rent their apartment on their behalf and to sign the tenancy agreement. The landlord’s signature on the letter of authority must be notarized. Then the authorized person must go in person to the notary to have their signature on the lease agreement notarized.
- For the landlord, having the lease agreement signatures notarized means that the document has stronger legal power and we are led to believe that this in turn will assist a faster eviction of an over-staying and/or non-paying tenant!
- What if the signatures on the lease agreements are not notarized? It means that the agreement is invalid if presented in court. However, we understand from a recent article by the Justice Department, DSAJ, that if one of the parties can provide relative proof such as a witness that the property is being leased or bank account statements showing payment of rent, then the un-notarized lease can still be proved valid in court.
- For a lease agreement extension, it is not necessary to notarize the signatures again.
- Often on lease agreements, a third party, such as the real estate agent, signs as a witness. It is not necessary to have the third party’s signature notarized.
Termination notices
When either the tenant or landlord wishes to give notice to terminate the lease agreement, this should be in written form. The signatures do not need to be notarized – they can be certified ‘by similarity’ (i.e. the same as those in the tenancy agreement).
Suzanne Watkinson would like to acknowledge and thank Dr. Carlos D. Simoes, Property Partner of DSL Lawyers, for his input on this article.
For any real estate-related inquiries, don’t hesitate to contact Suzanne Watkinson:
Ambiente Properties 2F Comercial Infante Building, 17a Rua do Dr. Pedro Jose Lobo, Macau, +853 6622 8541, www.ambiente.mo, [email protected]
