I want to lease out a residential property

Before signing the tenancy agreement, the landlord may ask for information about the tenant’s background, such as the tenant’s employment or income proof, intended use of the rental property, number of occupants and other relevant information.

After the landlord and tenant have agreed on the rental terms, both parties will usually sign a provisional tenancy agreement, followed by a formal tenancy agreement after the tenant pays the initial deposit to the landlord. The formal tenancy agreement could be handled and arranged by the solicitors, the appointed estate agents, or the parties themselves. If the formal agreement is prepared by the estate agent, then he has the responsibility to clearly explain the terms and contents of the agreement to the clients.

There is no standard format for a tenancy agreement under the law and its content is usually negotiated by the contracting parties (landlord and tenant). Once it is signed by both parties, it becomes legally binding. Landlords and tenants should carefully set out all the terms of the tenancy agreement and include verbal agreements in the agreement to avoid any disputes in the future. The terms should include:

• Particulars of both parties
  The tenancy agreement must list the correct personal information of both parties so as to ascertain their identities and to provide contact details. The information required includes their name or company name; Identity Card number or Business Registration number; correspondence addresses and phone numbers, etc.
• Details of the rental property
  Information about the property for lease should include the following in the tenancy agreement: detailed address based on the information registered at the Land Registry; the sublet portion if it is a sublet unit; the allotted number and location of the parking space if the property is leased together with a parking space; the areas of a roof or garden if it is included; whether the tenant has the right to use clubhouse facilities if there are any and, if so, the conditions of use; and the floor plans (if any) of the property may also be attached to the tenancy agreement.
• Lease term
  The tenancy agreement should clearly state the following terms regarding the lease term, including the rental period and the date when the tenancy commences and ends. The term of a tenancy is usually two years. However, one should note if there is a “break clause” in the agreement, which allows either party to terminate the tenancy after a certain period of written notice (usually one or two months) or payment in lieu has been given, provided that by then the tenant has at least rented the property for a certain number of months (usually 12 to 14 months depending on the negotiation of both parties).
  
  Moreover, if so agreed by both parties, the tenancy agreement should state the tenant has the option to renew tenancy after expiry, the period during which the tenant must exercise this , the duration of the renewal tenancy and how rental will be adjusted.
• Rent
  The tenancy agreement should state clearly the rental amount by month, by quarter or by year; whether the rent is inclusive of rates, Government rent, management fees, and/or parking space rental; duration of rent-free period (if applicable) and who is responsible for paying the expenses (e.g. management fees, rates and utilities) in that period; the time for payment of rent (e.g. a specified day of the month and usually there is also an advance payment) and payment method (e.g. by cash or bank transfer). When the landlord receives a rental payment, he must issue a receipt to the tenant or else he will commit an offence. If the tenant fails to pay the rent by the due date, the landlord has the right to terminate the tenancy and apply to the court/Lands Tribunal for payment of rent arrears or to apply for repossession of the property.
• Taking photos of the unit's condition and requesting the agent to prepare a written list of the property’s inventory before signing the tenancy agreement
  Before renting out the unit, the landlord may take photos of the property for the estate agent’s promotion or for prospective tenants’ reference. Before entering into a tenancy agreement, estate agents should draft a list on what is to be included in the tenancy of the residential property concerned and prepare a written inventory thereof with the tenancy agreement. If the property includes furniture, electrical appliances, etc., an inventory should be made and it should be clearly specified which party is responsible for the maintenance and repair of such items. To avoid any disputes in the future, both parties may take pictures of the furniture and electronic appliances included in the tenancy of the property for record.

A tenancy agreement is usually signed in duplicate and kept by the landlord and tenant respectively when the stamp duty has been paid. In addition, both parties should also ask the estate agent to provide copies of all documents he had signed with the agent.