In general apartment leases in Hong Kong last for 2 years with an initial 12 month fixed period and a break-clause which is applicable for the final 12 months of the lease. The break-clause is most often dual (both landlord and tenant can exercise the clause to break the lease after the fixed period) and the period of notice is most often 2 months although this can occasionally vary. In terms of finances, a holding deposit of 1 month's rent is payable upon signing an offer letter/provisional tenancy agreement. Upon signing the tenancy agreement, the holding deposit will become the first month's rent and the tenant will be required to pay 2 or 3 months rent as a security deposit, an agency consultation fee (typically 50% of one month's rent) and stamp duty (0.5% of the average annual rental + HKD 5.00 for a duplicate). I have provided a step-by-step process for leasing below:
1. Client communicates requirements to consultant.
2. Consultant provides a list of properties and a viewing is carried out.
3. A property of interest is identified and a verbal/formal offer is made.
4. Negotiations between Landlord and Tenant are held if necessary to make modifications to any terms.
5. A formal offer letter is signed and the tenant then pays the holding deposit of 1 month’s rent.
6. A tenancy agreement is drafted and signed upon agreement of the terms by both parties. At this stage the security deposit (2 or 3 months rent) is paid by the tenant to the landlord along with the agency consultation fee and stamp duty.
7. The Handover of the flat is conducted upon the commencement of the lease or at the start of the pre-agreed early possession date.
It can often be difficult to secure an apartment more than 4 weeks away from your preferred commencement date and I have found that 4 weeks is normally plenty of time to search for and secure your new home so I always recommend that you contact your Consultant no more than 4 weeks before you would like to move.