aboutshanghai.com » Real Estate

Rental Deposits, Good as Gone?

Jerry Hu — Fri, 11 Apr 2008 11:00:12 +0000

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.

Talking About Privately Owned Rentals

Lisa Thompson — Sat, 09 Feb 2008 11:00:35 +0000

A significant difference between privately owned rentals vs. developer owned rentals are the same everywhere in Shanghai. Generally, the privately owned rentals tend to be furnished to the local landlord’s tastes, which rarely perfectly match the tenant’s tastes. You might see this as either an advantage or a disadvantage.

However, with some skill your agent should be able to negotiate a compromise which keeps both parties happy; for example, if you can find an apartment where the landlord hasn’t bought furniture you could negotiate that he provide a budget for you to buy furnishings for the apartment and thereby decorate it to your taste. Of course, your landlord would own the furnishings and you would need to leave them for the next tenants to utilize after your departure.

There are varying reasons as to why prices differ so greatly in apartments in Shanghai. Firstly, if it is a developer compound then you have to look at the quality, age and style of the building, its furniture and fit outs, facilities, popularity and current availability, its location, competing properties close by and its management. These factors all go into determining the asking price.

A private landlord may not want to lower the rental due to the following reasons:

Landlord has better offers in hand,

Landlord not in hurry to rent out property,

Landlord may believe property is of a certain value,

Landlord may not want to pay full commission,

The agent’s lack of experience in negotiations,

The agents need of a high commission.

A prospective tenant’s terms and conditions of leasing will also affect the final rental price. Here’s how you can assist in getting a lower rental:

Pay rent on a quarterly basis,

Don’t request extra items,

Don’t ask to remove items,

Pay rent in USD,

Sign a longer lease term than requested,

Take the property unfurnished (if not furnished),

Commence the contract as soon as possible,

Don’t get an official tax receipt (Fapiao) unless necessary.

Housing Costs Hindering Middle-Income Families

Ted Masterson — Wed, 30 Jan 2008 08:00:38 +0000

A recent report from the Chinese Academy of Social Sciences has shown that housing costs in Shanghai, Beijing, and Shenzhen have been soaring. A study from the National Development and Reform Commission showed that housing prices in 70 major cities rose by 5.3 percent last month. Beijing and Shenzhen had nearly double-digit increases.

China’s rapid economic development had created a gap between supply and demand, which has contributed greatly to the increase in housing costs, despite measures that have been put into place to regulate and stabilize the property market.

Please check out the full-resolution images for this article by clicking here.

The report also showed that in Beijing and Shanghai, the demand for property is greater than elsewhere in the country. More than one-third of the houses in Beijing are owned by non-Beijing residents, and about a quarter of the houses in Shanghai are owned by non-residents. Also, about 43% of high-end properties in Beijing were bought by non-residents.

A recent interest rate rise that was intended to stem inflation and excessive growth in credit has affected low-income families the worst, and since that rise, they have been spending an extra 8 percent of their monthly income on housing repayments. Middle-income families, defined as those earning between 60,000 and 500,000 yuan ($7,765-64,716) a year, have been spending an extra 4 percent.

WWII Refugees Seek Preservation of Historic Neighborhood

Ted Masterson — Wed, 23 Jan 2008 08:00:11 +0000

During WWII Shanghai was an open city under mixed Chinese and colonial governance and was one of the last cities to accept Jewish refugees during the war. Jehuda Menczel, 70, a chemistry professor, was among more than 30,000 Jewish refugees who fled Europe to seek asylum in Shanghai during WWII. He lived in the Tilanqiao area of Shanghai from 1939 to 1949 and is among 120 Holocaust survivors who have petitioned to the United Nations that they recognize Shanghai’s Tilanqiao neighborhood as an international heritage site, a designation that would preserve the area of Hongkou district where thousands once found salvation.

Menczel summed up his feelings, and those of his fellow survirvors when he stated, “I used to play in Shanghai, go to school here. I love this area, and I love the people here.”

Until Tilanqiao is formally granted UNESCO status, Shanghai has made the area into a monument and tourist attraction, preserving a 28-hectare area as a historical site that combines Jewish and Chinese culture.

According to Pan Guang, an expert in Jewish culture at the Shanghai Academy of Social Sciences, Tilanqiao is well qualified for the title of “World War Heritage Site” and “If successful, it would become China’s first war heritage site.” Pan also reports that a senior official from UNESCO visited Tilanqiao two months ago and strongly supported the idea.