Standardization to provide more legal safeguards for landlords, tenants

China has adopted a special legal document to standardize the housing rental sector, a major step to protect renters' rights and boost the sector's healthy development.

The housing rental regulations, passed at an executive meeting of the State Council in June, said the condition of houses or apartments for rent must meet the requirements of existing law and compulsory standards, and must not jeopardize people's safety and health.

In an effort to address the risks of poor and unsafe rental properties, the regulations, due to take effect on Sept 15, make it clear that spaces such as kitchens, bathrooms, balconies and garages must not be rented out for people to live in.

The maximum number of people living in a room and the minimum average area for each tenant should meet the standards set by the local government, the regulations said.

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Landlords are required to show tenants information proving their identities and rights to the places for rent, including their identification documents and property ownership certificates.

They are prohibited from entering their rented houses or apartments without the approval of their tenants, except in circumstances allowed by law.

If landlords charge tenants a security deposit, both sides should put down in the contract the amount charged, when the deposit will be returned and the occasions on which it will be deducted or withheld, the regulations said.

Landlords should inform tenants if they decide to terminate contracts, and set aside a reasonable amount of time for tenants to move, the regulations said, forbidding them from forcing tenants to terminate leases or to move through violence, threats or other means.

Tenants, on the other hand, are asked to show their identification documents to landlords and use the housing in a safe and reasonable way.

They must not alter the load-bearing structure of the rented home or damage its fire protection facilities, the regulations said, adding that they must not alter other facilities in the housing without the approval of landlords.

The regulations are necessary for promoting the high-quality development of the country's housing rental market, said officials at the Ministry of Justice and the Ministry of Housing and Urban-Rural Development.

The market is facing a number of problems, including a lack of protection for the rights of both landlords and tenants, the officials said in a statement.

"To address these problems, we need to not only further implement the relevant civil law system ... but also formulate special administrative regulations to manage and guide the market more effectively," they said.

The adoption of the regulations comes at a crucial time when China is promoting the high-quality development of its real estate market, Chang Peng'ao, a professor of Peking University's Law School, said in an article published by the Ministry of Justice.

The regulations target the persistent issues in the housing rental sector, Chang said, adding that while balancing the interests of both sides, the regulations moderately favored tenants over landlords.

The regulations also laid out specific requirements for rental companies and intermediary agencies.

Rental companies should release accurate and full information about the housing they are letting out, including their address, size and the amount of rent charged, the document said.

They must ensure the information for the same housing remains the same when it is released through different channels.

The regulations ban them from releasing false or misleading information, or concealing or refusing to provide key information about the property that is to be leased.

Intermediary agencies are required to follow a series of steps to protect the rights of landlords and tenants.

Before advertising a property for lease, they should verify and record the identity of principals and their property ownership information, conduct on-site examination of the property, and sign brokerage service contracts with the principals, the regulations said.

The agencies are prohibited from receiving or paying rents or deposits. Nor are they allowed to sign leases on behalf of either party without their approval.

The regulations said the agencies should price their services clearly, and must not charge more than the price list says.

Governments are also assigned tasks to ensure market order.

State Council departments in charge of housing, urban-rural development and market regulation are asked to work together to develop and publicize templates of housing rental contracts and brokerage service agreements.

City governments should establish a system to monitor local rents, and publicize on a regular basis the level of rents in different regions and for different types of housing within their jurisdiction, the regulations said.

In recent years, China has sped up work to establish a housing system that supports both housing rentals and purchases.

Such a housing system means a more diversified housing supply and the people's greater inclination for renting a home, said Ye Yindan, a researcher at the Bank of China Research Institute.

Due to multiple reasons, many people in China prefer buying to renting a home, leading to heavier financial burdens on their families, Ye said.

As the country's latest efforts to address the issue, the regulations will provide powerful assistance for establishing a housing system that supports both rentals and purchases, she said.

Measures stipulated in the regulations will help cultivate more stable lease relations, thus turning rentals from a "makeshift" into a viable option for people seeking to address their long-term housing needs, she said.

Chai Qiang, president of China Institute of Real Estate Appraisers and Agents, noted the important role the housing rental sector plays in the development of the real estate market.

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Housing rentals serve as a "shock absorber" for the market, because they are generated by genuine housing needs, instead of irrational trade behaviors, Chai said in an online article.

Zhao Qingxiang, secretary-general of the Beijing Real Estate Agency Association, called the adoption of the regulations "an important milestone in the country's housing system reform".

The housing rental sector not only bears on the direct interests of the people, but also affects a city's talent attraction and its development momentum, Zhao said, adding that couriers and household employees rely heavily on rentals to address housing needs.

A robust housing rental sector will help better utilize the housing inventory, expand domestic demand and create new drivers for economic growth, Ye, the researcher, said.

Contact the writer at wangqingyun@chinadaily.com.cn