During every summer holiday and around the start of the school term, a large number of mainland Chinese and overseas students come to Hong Kong to prepare for further study, further heating up the rental market and creating strong demand for rental properties. If landlords plan to let their properties to such students, what should they pay attention to?
First, before deciding to let the property, landlords should first verify the tenants’ identities. As students generally do not yet have a stable source of income, landlords should have a clear understanding of their backgrounds, for example by reviewing identification documents, student cards, admission letters and other information, to verify that they are coming to Hong Kong to study. If necessary, landlords may also further obtain their Hong Kong contact details, parents’ information and source of payment.
In addition, many mainland Chinese students may not be very familiar with Hong Kong’s rental procedures and the details of tenancy agreements, such as the difference between a “live lease” and a “dead lease”, and the liabilities to be borne in the event of a breach of contract. Therefore, when drafting a tenancy agreement, landlords must clearly set out all terms and contents, and should preferably explain them to the tenants one by one before signing, to ensure that they fully understand the tenancy arrangement and reduce disputes arising from differing understandings in the future.
Generally speaking, the most common problems with students renting properties include terminating the tenancy midway, multiple people sharing a flat, and even changing occupants without notifying the landlord. Therefore, in addition to stating basic information such as the tenancy period, rent payment date, deposit and rental amount, the tenancy agreement should also clearly specify the actual number of occupants in the unit, whether overnight guests are permitted, whether early termination is allowed, and whether subletting or sharing the tenancy is allowed, as well as other important terms, in order to more comprehensively protect all parties’ interests.
If the unit is confirmed to be rented by mainland Chinese students on a shared-tenancy basis, the tenancy agreement must clearly state the responsibilities of each tenant. Even if one of the tenants terminates the tenancy in the future, the remaining tenants must continue to fulfil the terms of the tenancy agreement and are responsible for paying the full rent; it does not mean that once one person terminates the tenancy, the other tenants may also terminate the tenancy agreement together.
As for rental and deposit arrangements, since students generally do not have a fixed income, the rental risk borne by landlords is relatively higher. Landlords may therefore consider requiring tenants to prepay one year, or even two years, of rent together with the deposit, commonly known as paying it all in one lump sum, in order to strengthen the protection of their own interests.
On the other hand, rental deposits are currently generally set at two months’ rent. However, some landlords, in light of the circumstances of student tenants and concerns that they may default on rent or may not take good care of the unit’s fixtures and equipment, may also require an additional one month’s deposit to further reduce risk.
It is worth noting that, in some cases of students renting properties, parents may sign the tenancy agreement on their behalf. If this is the case, a “child authorisation” arrangement should be adopted, and the tenancy agreement should clearly state the name of the child who will actually occupy the unit. Copies of both parties’ identification documents should also be retained, so that there is documentary support in the future and unnecessary disputes can be reduced.
In addition, if the unit is let together with furniture and electrical appliances, landlords should also set out a detailed inventory before handover, and take photographs or videos to record the unit’s current condition, including the condition of the walls, flooring and various items of equipment, before obtaining confirmation from both parties. This can also serve as a basis in the event of future disputes over damage, loss or maintenance responsibilities.
