Commercial Lease / Tenancy Agreement

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What is it?

A Commercial Lease or a Tenancy Agreement is specific to renters using a property for business or other commercial purposes rather than for residential use.

In Hong Kong, a Tenancy Agreement is any agreement to rent a property for a duration not exceeding three years. A Commercial Lease is any agreement to rent property for a period of more than three years.

Both documents must be taken to the Stamp Office of the Inland Revenue Department for stamping within 30 days of execution. A Commercial Lease must also be registered with the Land Registry.

Why do you need it?

Once you have found the office space suited to your needs, you can draft a Commercial Lease or Tenancy Agreement to protect your legal rights. Stating clearly the terms and conditions for the tenancy agreement can reduce the chances of future disputes between the landlord and you.

Once the landlord accepts your offer letter and holding deposit, it is time to sign the Tenancy Agreement or Commercial Lease. The Tenancy Agreement or Commercial Lease is a legally binding contract and records the rights and obligations of both the tenant and landlord. The two parties therefore know their liabilities and their limits in regard to the tenancy.

Key clauses to watch for:

When drafting a Commercial Lease / Tenancy Agreement, it is important to focus on a number of key clauses, in particular:

  • Details of the tenant or landlord;
  • Duration of the lease/tenancy and whether it will automatically renew;
  • How much rent the tenant(s) will pay;
  • Rent schedule and payment due dates;
  • Who's responsible for which utilities;
  • Information about the security deposit;
  • Guest or pet policies;
  • Penalties for late rent;
  • Conditions for early termination; and
  • Property damage clause.

This document is also known as:

Lease Agreement Form, Rental Agreement, Rental Contract

Commercial Lease / Tenancy Agreement Document

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