Thu, Aug 02, 2018 - Page 8 News List

Rental law should be a win for all

By Lai Ching-yu 賴靜瑜

The Rental Housing Market Development and Regulation Act (租賃住宅市場發展及管理條例) came into effect on June 27.

With this new law in place, the government is to use a range of tax concessions, including reductions or exemptions from the land value, housing and income taxes levied on income from rent, to encourage residential property owners to place their rentable properties under the management of professional business operators or lease them to such operators, who can then sublease them to tenants.

The government is also to pay subsidies for insurance and repairs to landlords whose properties are used for social housing, as well as subsidize the rent of disadvantaged people who live in social housing.

In rental housing contracts or leases, landlords who offer premises for rent are called lessors, while tenants who pay rent to live in them are called lessees.

In Taiwan, there are often news reports about landlords getting into arguments over problems to do with repairs, early termination of leases or unpaid rent.

This atmosphere increases the tendency for people to be insecure and uncertain about contractual counterparts who they do not know well, so rental relations are generally lukewarm and can easily become hostile.

When people call my notary office to have their leases notarized, it is usually, in the case of landlords, because they are afraid that tenants will owe them rent and not pay up; that they will stay in the premises after the lease expires and refuse to leave, which can devalue the property; that they will damage the furniture; and so on.

As for tenants, they often worry that their landlords will not return their security deposit when the lease expires.

It is better if, when the two parties sign a lease, they can first agree on the points that they must each abide by and append terms concerning compensation for damage. It is also advisable for them to first get the lease notarized so that if and when a dispute arises, the terms of the lease can be enforced through a court of law, including the rent, payment of any penalties for breach of contract and the tenant’s duty to return the property when the lease expires.

By notarizing the lease, they can effectively avoid or reduce any future litigation costs.

However, notarizing leases is not only done to have a last line of defense when there is a breakdown in contractual relations. It is also hoped that, when the lease is first drawn up, both parties will devote enough time to discussing the finer details to prevent their relations from eventually breaking down, resulting in unfortunate disputes.

Many disputes arise because the details of the lease are drawn up carelessly, without thorough understanding.

For example, this could involve which items of equipment are appended to the property and who is responsible for their repair.

In the past, most leases only agreed to a default arrangement under which the landlord is responsible for repairing “natural wear and tear.”

However, the two parties to the lease often have different ideas about what constitutes “natural wear and tear” and what is “human damage,” giving rise to endless arguments.

It would be better if, when handing over the property and signing the lease, both parties discuss each item of equipment, whether it should be repaired, when disposable supplies should be replenished and who is responsible for their purchase.

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