Before embarking on your search for the ideal tenant, it is important to note your duties as a landlord under common law, namely that you (i) pay property tax and any other fees agreed upon in the tenancy agreement, (ii) ensure that the property is in a good condition and (iii) not affect your tenant’s reasonable enjoyment of the property by respecting their privacy. With these requirements met, you should also be aware of your tenant’s implied duties under the law. This will help you in setting the right criteria for finding a suitable tenant in Hong Kong.
Hong Kong’s property law is skewed in favour of landlords. Unless stated otherwise in the tenancy agreement, grounds for forfeiture of a domestic tenancy include: use of your property for illegal purposes, structural alterations of your property without your prior agreement and failure to pay rent within 15 days of the due date. Tenants are also expected to maintain your property’s interior, return the property upon the expiry of the tenancy and permit you access to your property provided that you notify them beforehand. With these rights in mind, you can determine your search criteria alongside the following checklist.
Common aspects to think about when finding the right tenant include:
- Their current living situation.
- Their current occupation and monthly income.
- Whether they can provide references from former landlords and employers to substantiate the point above.
- Their credit score and if they have declared bankruptcy in the past.
- If they intend to live by themselves or with any co-signors, dependents or roommates.
- Whether their co-signors or roommates are also contributing to rent.
- If they have pets or if they smoke.
Points 1 to 6 are intended to establish that your tenant has a reliable source of income. Whether a young professional, student, family and/or expat, if they submit a rental application (in the instance that you are leasing your property through a property agency), any potential financial red flags can be raised by carefully screening your prospective tenants.
In terms of Point 7, this is largely dictated by your personal preference. Though pets may have the potential to cause a small amount of damage to the interior of your property, smoking could rack up renovation or cleaning costs due to leftover pollutants and chemical residue coating the interiors of your property.
You will need to clearly express your expectations for a tenant up front, especially in the case where you are dealing with them directly without the services provided by a professional property agency.
Irrespective of your time frame for the lease, it pays to meet your potential tenants in person. If you perceive them to be difficult to work with, not open to suggestions and unprepared to meet your criteria or provide any references for their current living, working and credit credentials, you should avoid entering a tenancy agreement with them. Keep in mind this is also a two way process, your tenant should be able to voice their expectations of you as a landlord in terms of other associated property fees and the agreed upon terms should be codified within the tenancy agreement to minimize the possibility of any future disputes.