Whether it’s for a short term stay or have landed a job in Macau, one of the most important things to get is a place to stay. However, finding an apartment is one thing, there’s also the length of your lease, what kind of documents you need and the list goes on and on. These are all questions that are best answered by real estate agents and here are the top 10 queries!
Can I sign a short term lease for an apartment?
Yes, as long as you are legally permitted to stay in Macau for the duration of the lease. Finding short term apartments can be a challenge in Macau, though. Most landlords will insist on a minimum of one month lease, and some will require a minimum of three months. For those who don’t have a Macau work permit, you can sign a tenancy agreement as long as you’re legally permitted to reside in Macau. When you sign a tenancy agreement the landlord will require that you provide proof of permission to stay in Macau and for how long. The tenancy agreement you sign should be no longer than the period that you can legally stay here.
For example, as a Hong Kong ID holder, you may stay in Macau for up to one year. As this is renewable for further periods of one year by returning to Hong Kong for at least 24 hours, before the end of each one year period, you would be able to sign a standard three-year lease.
How much notice should my landlord give me to terminate or extend my lease or adjust my rent?
The law is very clear on the required notice to be served by the landlord to his tenant prior to the expiry of the agreed lease term:
|Lease Duration – As agreed (in writing) in the tenancy agreement*||Notice Period (Statutory)|
|6 year or over 6 years||180 days|
|1 year or over 1 year and less than 6 years||90 days|
|3 month or over 3 months and less than 1 year||30 days|
|Less than 3 months||1/3 of the duration of the lease|
Accordingly, in a three-year lease, with a clause requiring that both tenant and landlord need to agree to renew or terminate a minimum of 30 days before the end of the lease the statutory notice period prevails.
So, if a landlord fails to serve the 90 days’ notice to either terminate or renew, the tenant can continue their lease for a further 12 months with the same terms as their current lease. However many landlords may not be aware of this statutory rule or may forget to serve notice and will be expecting to go by the tenancy agreement’s stated 30 days. If he or she contacts you (by say, 40 days before the end of the lease), and you insist that they should have contacted you with 90 days’ notice, in the eyes of the law, you are entitled to stay on, but you risk damaging any relationship you have with your landlord–who may then start being difficult or slow in sorting out maintenance issues as they arise.
If I sign a lease that is less than three years, can I still stay on for up to three years and with the same terms?
Yes, you can stay on for the full three years. A new law was introduced in February 2018 stipulating that the minimum term of a residential lease is three years. So if, for example, you signed a two-year lease and a) there is no mention of any change of terms (such as increase in rent) for a third-year option, and b) the landlord doesn’t contact you 90 days or more before the expiry of the two years to discuss extension or revised rent, then you can stay on for the third year with the same terms and rent.
Can I break my lease early?
If you suddenly need to leave Macau and need to break your lease after two or three months, it is possible. But there is a lot of confusion between the law and market practice in Macau. In practice, most tenancy agreements include a termination clause requiring the tenant to give one or two months’ notice after having lived in the apartment for a continuous period of no less than 12 months. Some landlords agree that the tenant’s notice can be included within the 12 months, others insist that notice may only be given once the 12 months is completed, so often the duration of stay is 12 months plus the notice period. The two months security deposit is then returned to the tenant.
Under the law, however, if the full term of the lease is not completed by the tenant, the landlord is entitled (once pre-notice has been served) to keep at least one-month rent and up to two months as compensation, but not more than two months. On the matter of notice required by the tenant, the law states that 90 days’ notice is required for early termination at any time. So what takes precedence? The tenancy agreement will take precedence if it states that a shorter term of pre-notice may be given by the tenant. If this is not stated, then the law takes precedence.
As a tenant, what maintenance am I expected to carry out and pay for during my lease and what should the landlord pay for?
As a rule of thumb, the landlord is liable to pay for structural repairs to the property, damage caused by external forces such as typhoons, and repairs of equipment such as air-conditioning and kitchen appliances if they are mechanically defective and provided with the tenancy. The tenant is expected to keep the property clean and the equipment in good order.
This seems simple enough but can get into a grey area–such as in the case we had recently; the refrigerator compressor in a tenanted apartment burned out and caused electric shortages in other parts of the property. Upon inspection, the back of the refrigerator was totally clogged with dust and grease, blocking the ventilation and causing the burnout. So is this tenant or landlord’s responsibility?
The tenant is responsible for replacing consumables–such as light bulbs. Tenants are also responsible for regular cleaning and servicing of air-conditionings. Freon cooling agent for the air-conditioning is considered a consumable so adding this is necessary since it’s considered a tenant’s responsibility although many tenants would vehemently disagree! What about replacing a broken toilet seat, broken shower head, broken sofa leg, who is responsible? The jury is out–some landlords will agree to pay for the replacement or repairs, others will not. To help manage expectations and avoid disagreements between parties later, tenants and landlords are strongly recommended to iron out areas of maintenance responsibility ahead of the start of any lease.
What is considered “fair wear and tear”?
When I was leaving my last apartment, there were a few scratches on the laminate wood flooring and two water ring marks on the marble countertop in one of the bathrooms. In my lease, it states that I could get back all my deposit, less any breakages or damages, “fair wear and tear excepted”.
The landlord refused to return my security deposit, saying that he would keep it to pay for the repairs. I obtained a quotation to have the work done but the landlord insisted on using his own contractor and the quotation for the work was greatly over-inflated, much more than my own quote, thereby substantially eating into my deposit. The landlord also withheld HKD $5,000 to cover cleaning, again a ridiculously over-inflated cost. What are my rights as a tenant in this regard?
Unfortunately, there is no fixed test for what may fall under the exception of “fair wear and tear” in lease agreements–it depends on the court’s interpretation of the facts and circumstances of each case. However, from a practical perspective, in order to avoid possible disputes between the landlord and the tenant, it is essential that an inspection of the leased premises is performed, so as to ensure that both parties are fully aware of the condition of the leased premises. It is also advisable to take photographs of any area, which may later come into dispute, as these pictures may be the clinching proof in settling a dispute at a later date. The landlord and tenant should agree on the primary use for which the leased premises is required, as well as the most likely wear and tear, which may be anticipated, before concluding the lease. The lease should stipulate which party will be responsible for which specific maintenance or repair items. Similarly, an out-going inspection will provide both the landlord and the tenant with complete assurance that the condition of the leased premises is of an acceptable standard.
Protecting my position in getting my security deposit back. Can I withhold payment for my last 2 months’ rent?
I heard from neighbors that my landlord is well known for refusing to return the security deposit, making up all sorts of excuses why he should not. I pay my own rent, not my company, so I really want to protect my position and ensure that I get my deposit back. How can I do this? The apartment is in immaculate condition, I keep it very clean and well maintained. Can I withhold payment of the last two months’ rent–perhaps even putting it with a third party, like a lawyer–and then when I leave the property, the landlord and I can come to an arrangement on the security deposit?
The short answer is no, you cannot withhold your rent. Under Section 996, Civil Code, the landlord has the right to claim compensation if his tenant doesn’t pay the rent on time.
|Days for late payment||Claim from landlord|
|Late more than 8 days and less than 30 days||Equivalent to 50% of rental amount|
|Late payment more than 30 days||Equivalent to 100% of rental amount|
Although not common market practice, sometimes tenants will withhold their last months’ rent to use their security deposit. The reality is that if the landlord objects, the tenant will be in a difficult position, without any legal protection and subject to paying the penalties detailed in the table above.
What about the Stamp Duty that the landlord pays in advance to the tax department, based on the rent he will receive for the full term of the signed lease? My lease states that if I terminate my lease early, I need to reimburse this to the landlord on a pro-rata basis. I realize that this is in most cases less than a couple of thousand dollars, but in any case, can the landlord deduct this from my security deposit?
Under the law, (Section 27, Stamp Duty Ordinance), the Stamp Duty is payable by the landlord. However, if you agree contractually to reimburse the landlord for this cost in case of earlier termination, then it becomes a contractual penalty and the tenant is to bound to pay it.
Can I register my business using my apartment address?
Can I use an apartment as my office? In a word, yes, as long as your company’s activities are not subject to licensing and inspection. So, for example, if your business is a real estate agency the Housing Department requires that it is registered in a bona fide office building, not in residential premises.
Likewise, we understand that in order to apply for blue cards to employ non-resident workers, your company must be registered in a commercial property that is solely used by you–that is, you can’t use your accountant, lawyer, or friend’s office to register as your place of business. Apart from these two situations, most landlords are quite relaxed with the use of their leased apartment unit as a registered address for a company or as a “home office” that is being used during the daytime.
What about using an industrial building as an office?
Yes, it is legally possible, and there would be no challenge to the landlord’s ownership rights. However, if a tenant deviates from the use from warehouse to an office, the obstacles may come from other co-owners–due to increased use of lifts and more security needed.
Therefore, the rule of thumb would be to check the existence of any other offices, in operation at the same building. If those exist, then the risk of any challenge by the other co-owners would be very low.
Early termination of an office lease and payment of rent for the remainder of the lease term?
If I have an office lease–say a three-year term–and I serve the required 90 days’ notice to terminate early, am I required by law to continue paying rent until the end of the lease period? I note that this is commonly stated in commercial tenancy agreements.
It should be noted that, for office or commercial leases, there is no statutory rule providing the tenant with an irrevocable right to terminate earlier (as Section 1044, Civil Code, does for residential leases). Therefore, and unless the agreement provides a right of earlier termination for the tenant, the tenant would always be required to perform the agreement (pay the rent) until the expiry date of the tenancy agreement.
**Suzanne Watkinson would like to acknowledge and thank Dr. Carlos 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 by emailing [email protected]
*All views expressed are the author’s alone