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SAVVI DOES NOT OWN, LEASE, MANAGE OR REPRESENT BUILDINGS FOR OURSELVES OR FOR ANY THIRD PARTY OWNERS.
ACCESS OFF-MARKET RENTALS THROUGH OUR PROPRIETARY TENANTS NETWORK.
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"We regularly work with SAVVI to discuss staff relocation ideas and options for teams moving in, around and out of Hong Kong. Savvi provides a turnkey solution and a single point of contact.
— Big Four, HR Manager
"There has always been quite a bit of demand for our development, but we were looking for a quality tenant for a short term lease as planned to make the apartment for sale. Savvi introduced us to excellent prospects as well as potential buyers."
— Island Crest, Landlord
"My firm provided numerous contacts to agencies, though i found it extreamly helpful to have SAVVI as a single point of call without missing a beat. Their corporate experience made the process smooth, to the point, and informative."
— Hedge Fund, Portfolio Manager
The general term in Hong Kong is for 2 years (subject to negotiations), after the first 12 months, a written notice may be served to the landlord to early terminate the lease (typically 2 or 3 months in advance). We strongly recommend including this termination provision / break-clause in the tenancy agreement.
Options negotiable, typically a further 1-2 year term.
Rent is payable monthly in advance. Rents are quoted in Hong Kong dollars (HK$) per square foot, per month and are calculated with reference to the leased area as defined by the landlord.
An incentive offered by the landlord to the tenant as an allowance for the fitting-out of the premises. The length of the rent free period depends on the size of the premises and the prevailing market conditions. During tight market conditions, free rent offered may range from one to three months. During weak market conditions, some landlords offer four free months or more, depending on the tenant, the length of the lease term, the size of the space leased and the rental rate.
A monthly charge payable to the landlord or management company for the upkeep and security of the building and its common areas. Payable monthly in advance and based on the leased area. Management charges generally include air conditioning, building security, lift maintenance and common area cleaning (Subject to revision by management company). The fee is quoted on per square foot per month and is non-negotiable and may be revised from time to time.
This is normally equivalent to two to three months rent which the landlord will hold without interest throughout the lease term. This deposit is refundable and will be returned to the tenant at the expiration of the Tenancy Agreement provided that all the terms of the lease have been compiled with and all utility bills are fully settled.
Government rates and rent are payable quarterly in advance and are calculated at 5% and 3% of the rateable value of the property respectively. Government rent and rates are usually borne by the landlord, but some landlords may look to pass this cost on to the tenant.
This is shared equally between the Landlord and Tenant and is paid to the Government of the Hong Kong Special Administrative Region for the stamping of the Lease Agreement after it is signed. The duty on a lease must be paid within 30 days of its execution, failing which the contractual parties are liable to a penalty for lateness. If the stamping is more than two months late, the penalty is ten times the amount of duty, though the collector has power to remit some or the entire penalty.Your agent, landlord, solicitor or yourself will need to present the signed tenancy agreement for stamping. The duty incurred will be shared equally between you and your landlord. A separate cheque should be made payable for the duty to 'The Government of HKSAR.
At the commencement of 2014 the following Stamp Duty rates apply and are payable upon execution of the lease:
Electricity and telephone charges are separately metered and paid directly by the tenant to the utility company. The electricity charge is usually based on a meter, and is typically HKD 1.00–1.20 per square foot per month for an office tenant. Water rates are charged to the landlord and passed onto the tenant.
The tenant pays for electricity, water, and gas used in the premises, usually directly to the utility company. The electricity charge is usually based on a meter, and is typically HKD 1.00–1.20 per square foot per month for an office tenant. Tenants usually pay for water based on a meter, although some pay a fixed license fee or pay for water in the management fee.
The tenant may consider sufficient insurance coverage to protect themselves against third party liabilities.
Car parking may be included with the residence. The average rate ranges from HKD 3,000–6,800 per month in addition to residential rent. Parking spaces can be fixed (assigned) or floating (non-assigned), covered or outdoor, 24 hours, seven days a week.
For tenancy agreements entered before 9th July 2004, a landlord was in most cases bound to renew a tenancy for a domestic property with an existing tenant under the law. However, the law has changed. Tenancy agreements entered after such date no longer offers any statutory right of renewal in favor of a tenant. A tenant could only ‘renew’ his tenancy either through negotiation or contractually exercising an ‘option to renew’ under a tenancy agreement (if so provided). Where an option to renew is provided, it is typically determined by OMR.
An ‘option to renew’ clause in the contract usually requires the tenant to give a written notice to the landlord not later than a date specified in the contract. The clause may also contain reference to the terms of the new tenancy document, such as on the same terms as the existing tenancy or a slight increase in payable rent over the renewed term of tenancy.
Sub-letting rights are prohibited under most agreements and where they are permissible, are subject to approval by the landlord. Similarly, assignment of the lease and early termination are usually non-negotiable. Subject to approval by Landlord, replacing a tenant can be done by Assignment. The outgoing tenant will need permission and co-operation of the landlord and should expect to pay the landlord's share of the agency fee, legal costs and stamp duty payable.
The new or replacement tenant has a lease granted by the landlord.
The general term in Hong Kong is for 2 years (subject to negotiations), after the first 12 months, a written notice may be served to the landlord to early terminate the lease (typically 2 or 3 months in advance). A termination provision / break-clause is common in residential leases.
When a landlord intends to sell a property that is let to a tenant, the landlord should make it clear to the estate agent, the solicitors and the potential purchaser that the property will be sold subject to a tenancy (instead of delivering up “vacant possession”).
The landlord shall also state clearly in the sale and purchase agreement (or preliminary agreement) about the apportionment of rent (including unpaid rent as receivable from the tenant) before completion of the sale. The landlord should also notify the tenant about the intended sale and properly, the identity/contact method of the purchaser and the payment method (e.g. bank account of the purchaser) and deal with the deposit paid by the tenant.
The tenant is required to hand the premises back to the landlord at the expiration of the term, in a state consistent with the due performance of the Tenant's obligations under the Tenancy Agreement. The Tenant's obligations typically are handover in good clean and tenantable condition and repair (fair wear and tear excepted).
Generally, a tenant is under no obligation to ‘improve’ the property into a better state than what was given to him at the commencement of the tenancy. It is also expected that the property may suffer from fair wear and tear as result of aging and normal use in which the landlord may have to reasonably accept at the time of handover.
For renovations carried out by the tenant within the property, it is a more complicated matter as to whether the landlord would be willing to accept delivery up of the property with such state given that renovations are often a matter of personal preference.
In practice, to avoid unnecessary disputes, it is often desirable for both parties to sign on a written acknowledgement about the state of handover of the property after inspection.
Capital contributions for fit-outs are generally not open for negotiation.
A large proportion of the overall residential market in Hong Kong are held by way of a “strata-title” where individuals own residential units in a building. The rights and responsibilities of property owners and overall property stewardship are outlined within the Deed of Mutual Covenant.
The communal areas of the property (including the exterior of the building) are usually managed by an external management company. The process of acquiring space in a strata-title property is no different to any other residential property.
Typically held by private investors, institutions or larger organisations, often owning clusters of buildings including a mixture of retail and commercial. Commonly, developers have been involved in the development of the property or scheme and take responsibility for building management in-house. The owners will frequently employ the services of a third party specialist to take care of the day-to-day running of the property.
As well as considering the size of accommodation, the number of bedroom/bathrooms and size of the general living area, another consideration is whether or not to rent a furnished or unfurnished apartment.
Most accommodation in Hong Kong are offered unfurnished. Furniture and domestic appliances can be provided with an increment of rent.
Please note that this increment will not be taken into consideration. The rent will be assessed on an unfurnished basis and your housing assistance will be calculated and based on the assessed rent.
The standard and quality of finishes in many properties varies tremendously from dated colour schemes, flimsy and cheaply made units, poor plumbing/drainage to plug sockets not working.
Improvements at the Landlord expense such as redecoration, provision of domestic appliances, floor polishing, alteration to fitting etc. are points for negotiation and must be raised at the time when the offer is made.
It is also advisable to ask your letting agent as to whether the property you intend to rent is well managed. Shoddy building standards can result in problems for the tenants. Ensure that the management of the property is good and that your Landlord is amenable to meeting relevant costs that might be incurred during the tenancy.
Possession of the premises is normally provided in “bare shell” condition. Costs associated with fitting out the space will be borne by the tenant.
Tenants normally pay for all tenant improvements, except what is included with the landlord’s standard handover condition.
A tenant is generally free to use its own architect and engineers, and must use the landlord’s contractor for air-con and plumbing. The tenant must fit-out the premises according to plans and specifications as approved in writing by the landlord.
Fit-out costs are typically quoted and assessed on the net square footage of the space and can range from HKD 600–1500 per square foot, including construction, furniture, wiring, design fees, etc.
Ranges shown below include design and engineering fees but exclude furniture and audio/visual:
The lease agreement generally requires tenants to restore the property to its original handover condition, before the expiration of the tenancy at their own cost.
Each party will bear their own legal costs in the negotiation and execution of the lease and any further documentation required. Typically, the landlord’s solicitors prepare the lease agreement using fairly standard terms and conditions.
A standard tenancy agreement is common, and landlords are generally reluctant to accept major changes. Major landlords usually have their own standard tenancy agreements, which include some landlord-specific terms.
If the tenant enters into a commitment with a new landlord, that landlord will pay the agent a fee; which is normally half of one months new rent.
Sale and Purchase:
Tenants generally should engage a designer to measure the floor area of the leased premises. Floor areas are quoted based on gross area and saleable area (i.e. net area) and rents, service charges and various charges are based on these measurements. Tenants should understand the difference between them in order to compare the true cost on actual useable space of the premises.
According to traditional Chinese custom, the advice of a feng shui expert is sought when moving to a new house or office or retail shop. The expert advises on the suitability of the new location for the individual or business. Feng shui experts also advise tenants as to how to improve the living or working environment.