Investigation Prior to the Renting of Premises

During the pre-contractual stage or before entering into an acquisition or leasing contract, the tenant should be alert to the precautions below:

* Inspect the property to check whether it is in a good state of repair. A structural survey may be required to advise on the repair outlays that the tenant is likely to face. The tenant should be clear about the party who is responsible for repairs: the landlord or the tenant;

* Seek for advice on whether the property is worth the asking rental;

* Ensure the location of the boundary stones corresponds with the plan of the property as disclosed on the land title;

* Ensure whether squatters or third parties are in occupation;*

*Ensure whether essential services (electricity, water, drainage) are connected;

* Seek for clarification whether any planning permission is required for any improvement or alterations;

* Seek for clarification whether the existing or intended use of the property complies with local regulations or building laws;

* Make certain whether the property is affected by any compulsory acquisition proposal or any road widening or road building proposal by the government;

* If the building has been previously occupied, identify carefully which fixtures and fittings will be removed when the previous occupier leaves;

* Discuss with the landlord and gain the landlord’s approval for the renovation works that are required for the operation of the business before carrying them out;

Other the above mentioned points, a tenant should also pay attention to the provisions in a tenancy or lease agreement. Generally, a tenancy or lease agreement should define clearly the parties in the agreement, the demised premises, the usage of the premises, the term (commencement date and termination date), options to renew the lease, obligation of landlord and tenant respectively in maintaining the premises, rental amount and payment mode, rental adjustment rate if the tenant requests to extend the lease, assignment to sublet, condemnation insurance, as well as default and remedies.

If a tenant is renting a retail store, he should pay extra attention to the set out easement and identify clearly the square footage, common area and store location. However, if the premise is within the retail building, the tenant should discuss further with the landowner on the appurtenant right, the restriction of use, and the usage of directory boards and signs.

For the letting of office space, the tenant should also highlight the use of parking space, operating hours, permitted access and services provided by the management. In renting apartment space, the tenant should seek clarification from the landowner on the building regulations or house rules that govern the rules set by the management. The tenant should also find out whether the apartment is limited to one family and identify clearly the parking and storage space. For tenant with pets, it is also necessary to clarify with the landlord whether pets are permitted.