Real Estate Matters | Surviving the check-out process

Sam Lee

If you sit down and think about it, renting a home from somebody is kind of a funny concept. We might rent a tuxedo for a night, a car while we travel, or borrow a book from the library. We are familiar with the concept of renting or borrowing things that we generally need occasionally and for only a short time. We personally own most other things that we need or use on a day-to-day basis – except housing. Despite being categorised as one of the big 3 material necessities for human life along with food and clothing, due to high property prices or personal circumstances not everyone owns their own home.

By renting a home from somebody else who owns a property, a contractual relationship is formed between the tenant and the landlord for the duration of the tenancy. Although most tenant-landlord relationships are kept on a friendly basis through having a clear contract that outlines the exact boundaries and duties of both parties, due to differences in expectations some tenant-landlord relationships can become emotional and even personal.

The check-out period at the very end of the tenancy is likely the most prone to disagreements. After the tenancy period is over, the landlord or a representative conducts a final check-up on the property to see if there are any issues with the property before returning the security deposit to the tenant. Disagreements often happen at two levels. Firstly, they can happen over whether something is fair “wear and tear” through normal usage, or damage directly caused by the tenants. This can be prevented to a large degree by taking a detailed photo or video inventory of the unit before move-in. The second level of disagreement arises when both parties agree that there was damage to the unit or its contents, but can’t decide how much should be compensated by the tenant. This is because both the tenant and the landlord are likely to have a very subjective and emotional estimate of the cost of the item that was damaged. The way to approach this is to make it as unemotional and methodical as possible. First, find out how much the value of the item was when it was first purchased, which the landlord should know. Then it is a matter of agreeing on how long the practical ‘life’ of the item is. For example, a normal sofa can be expected to last about 7 years before needing replacement. Finally, calculate the current value of the item by using a simple depreciation formula. For example, if the sofa cost HKD5,000 brand new and has a life expectancy of 7 years, then it depreciates by HKD714 per year. If the sofa was 3 years old when it was damaged by the tenant, he can expect to compensate HKD2,858 to the owner.

Like most human relationships, resolving personal conflicts is done through empathy and putting yourself in the other party’s shoes. But of course, this is much easier said than done.

Sam Lee is a marketing manager and property consultant at JML Property.  JML was established in 1994 and offers Investment Property & Homes. It specializes in managing properties for owners and investors, and providing attractive and comfortable homes for tenants.

www.JMLProperty.com

info@JMLProperty.com