Real Estate Matters | Common misconceptions about renting a property in Macau – Part 6
Juliet Risdon
This list of common misconceptions may look innocent enough, but the difference in expectation is usually the source of major rental conflicts, and one that could be easily avoided with a little more clarity up front.
When you consider the rental process usually involves at least two different languages (sometimes three), its not surprising that misunderstandings are commonplace.
In the final installment of this series we examine some of the most common misconceptions… including some misconceptions on security deposits.
Finding good home furnishings will be easy
Some of the more popular furniture stores in Macau such as ‘Area’ in Ocean Gardens, Taipa and WH Furniture in old Taipa and Macau have recently closed their doors.
There are several furniture stores around Macau that you can visit, including such stores as ‘City Square’ or ‘Zara Home’ that sell not only furniture but soft furnishings and decorations as well.
New shops come and go all of the time, so please contact us if you are looking for furniture and we will happily share with you the current list of stores that we use.
Its not a big problem if I don’t pay the rent on time.
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 percent 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 percent 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 2-month security deposit cannot be used in lieu of rent, and if you don’t pay rent for the last 2 months, the debt owed will be equal to 4 months rent.
I can’t afford to buy a property here
This point of view is easy to understand and relate to.
However, the first thing to remember is of course that the bank will loan you a lot of the money that is required to buy a property.
If you are a Macau resident, it is possible get up to 70-80 percent of the property price funded by the bank. That still leaves 30 percent of the price to come up with though, and even on an apartment costing $4.0m, you will have to find $1.2m in cash for the initial deposit.
Non-residents funding for a property can also extend up to 70% depending on the property.
There are lots of ways that you can get your families and friends to help you out with the purchase. For example, it’s possible for more than one person to co-sign for a property, so you could consider buying a property with a partner.
The security deposit must be refunded in full if I give notice to terminate the agreement before the end date.
Currently, Macau tenancy law states that, in the absence of another agreement between the tenant and the owner, the tenant may give three months notice to terminate an agreement.
If the two parties agree a shorter period in writing, and of course many rental contracts do allow tenants to give two months notice instead of three, then the shorter period will stand.
The common misconception is that the tenant is then entitled to receive back the security deposit in full.
In fact, the termination of the agreement means that the tenants release themselves from the obligation that they had originally made to continue to rent the apartment for a definite period of time i.e. two years.
As compensation for the tenant breaking the original agreement, the landlord is entitled retain a maximum amount equal to one month’s rent.
The security deposit must be refunded in full the day I leave the apartment
A good rule of thumb is that with the exception of normal wear and tear, an apartment should be left the way it was when you moved in if you want to receive the full deposit back.
Returning the apartment without giving it a thorough clean could be enough for the owner to withhold a portion of your security deposit.
However, under any circumstances the apartment must be thoroughly checked through and this includes the final payment of utility bills, hidden stains and burns and testing the working order of white goods, all of which take time.
It is usual for the return of the security deposit to take up to two weeks, we suggest that the maximum time allowed is stated clearly on 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.
info@JMLProperty.com
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