Real Estate Matters | 25 property questions we were asked this year – part III

Juliet Risdon

15. Question: I’m only here for three months, can I rent an apartment?

Yes, it is possible, but it’s not easy.

There is usually great difficulty attached to renting an apartment for less than six months. Most owners consider it too much trouble, and many agents refuse to handle such short leases.

However, it is possible to rent for shorter periods.

One option is using a ‘Corporate Rental program’ where the rental agreement is signed under the company name, and the agreement provides the tenant with more flexibility than a traditional long-term lease.

Another option is using a ‘studio’ in a hotel, which of course has the advantages of not having to pay deposits, having use of facilities such as a swimming pool, gym etc available, and not having to pay for utilities.

‘Air BnB’ is also used in Macau, although the service is illegal and does carry with it an element of risk, including the possibility of legal repercussions, security issues regarding access to the apartment and safety concerns especially in older buildings.

14. Question: What happens if I don’t pay the rent?

Not paying rent is a bad idea in Macau.

Once a rent is overdue for nine days or more, the landlord is entitled to charge a late fee premium of 50% of the rental amount.

If a rent remains overdue for 30 days or more, the landlord can now charge a late fee premium of 100% of the rental amount. In other words, once a rent is 30 days late, you would now owe double the normal rental amount.

This is why it is so important to pay rent at the end of a tenancy agreement.

The two-month security deposit cannot be used in lieu of rent, and if you don’t pay rent for the last two months, the debt owed will be equal to four months rent.

13. Question: What’s the difference between gross and net area?

The net area is the area inside the walls of the apartment that can be used by the occupants.

The gross area is the net area plus a proportional amount of the common areas of the building such as the lobby, lift space and recreational club.

The net area in modern buildings with recreation facilities is usually around 70% of the gross area. This is sometimes referred to as the ‘efficiency’ or the ‘ratio’ of the building.

12. Question: What happens when the leasehold runs out on my property?

Leasehold property in Macau is under Portuguese law, and the leasehold is until 2049 (two years after Hong Kong).

Leases ending earlier than 2049 are renewed on a 10-year basis, and will continue to do so until 2049.

At that point, the government will announce new lease terms and of course the price of the lease.

The leasing of land is usually a government’s main sources of income, but it is also a measure of their credibility.

A government that tries to rebuke land ownership rights and property titles would effectively destroy any confidence in the country, and is therefore extremely unlikely.

It is more likely that the government will, at that time, issue new leases that expire in 2099, by which time I will be approximately 130 years old and less able to move if I have to…

11. Question: How much notice do I have to give on my rental apartment?

As a tenant, you have a few choices.

When the tenancy agreement is coming to an end, you can let the owner know you will not extend at any point leading up to the end of the lease.

If it is prior to the end of the agreement, you can give notice in accordance with the contract. For example, it may say that the agreement can be terminated with two months notice.

If the agreement does not have a termination clause, you can give the owner three months notice.

When a lease is broken, the owner has the right to retain part or all of the security deposit dependent on the notice period and the wording in the tenancy agreement.

Juliet Risdon is a Director of JML Property and a property investor.

Having been established in 1994, JML Property offers investment property & homes. It specializes in managing properties for owners and investors, and providing attractive and comfortable homes for tenants.

www.JMLProperty.com

[email protected]

*All figures expressed in HKD unless otherwise stated