When renting an apartment in Shanghai, it’s as important to make sure your I’s are dotted and T’s crossed as it is to get a lease in your native language. After all, how do you dot an I in Chinese? What’s more important is to make sure that your deposit is not overly expensive, because just like anywhere you might live, you may never see it again.
Think how easy it would be for you to rent out your house to someone visiting on a work visa from Sweden. They stay, they leave, they’re out of the country and you’ve still got their deposit. To just keep their deposit and never say anything about it is a tempting notion, especially since they’re out of the country and long gone.
In 2003, Shining Properties rented an apartment to one of our staff members and charged him two months rent for his deposit, which was especially high considering he only lived there a month. He didn’t have his contract prior to moving in, so they got to charge whatever they wanted (and threatened police would remove him and his children within three hours if the lease terms were not agreed to), but since it was only a deposit, what’s the risk? Just leave the place like you found it and you’ll get your money back, right? Not so simple, it turns out.
He was not allowed to have his money back before flying out, but was assured it would be direct deposited into his American bank account (that’s right, they insisted on having all the bank account & routing information) within 48-hours. We’re talking about thousands of dollars owed to a guy who had no understanding of the legal system and no means of recovering due funds, so it came as little surprise that the money was never returned and all subsequent calls and emails on the matter went unreturned.
Even in hip cities like Seattle, landlords are prone to abuses of damage and security deposits. Two good examples are Marvin Gardens Apartments, a company that will return your entire deposit as long as you don’t set fire to the unit, and Westlake Associates, a company that won’t return your deposit if you steam clean the carpets and take a hundred pictures on move-out.
Unlike Westlake Associates, your worst experience in China is that you’ll lose your deposit; they won’t send you to collections for hundreds over and above it after you’re long gone.
The moral of the story is that, even though you SHOULD get your deposit back, you just never can be sure if you will, so don’t give them any more than you have to. A good guideline is that you should pay your first and last (since these are just rent, after all) and between a half-month’s and a full-month’s rent for your security deposit, depending on what utilities are included in your rent. If it covers water, sewer, electric, gas and telephone, obviously it should be on the higher side.
Don’t be overly aggressive on this matter, but protect yourself. This is not to suggest that China wants to steal your money, it’s just not the case. It’s more of a commentary on human behavior. Given an easy opportunity to make away with huge sums of money with the only victim being a rich foreigner you’ll never see again, it’s an easy corruption to envision.