General Overview-Lease a property in CHENGDU

Net Rental – This refers to the net rental amount the landlords desire.

Rental Top Up Elements –

1. Rental Fapiao – this is usually required if the lease is signed by the Company. It computes asfollows:
   1. Monthly Rent RMB5000 and below = 4% tax rate
   2. Monthly Rent RMB5000 to RMB20000 = 8% tax rate
   3. Monthly Rent RMB20000 and above = 10% tax rate
2. Management Fee – These fees are usually to be included in the top-up rent. There are very few landlords will take this fee as part of their Net Rent. This fee covers the services such as security guards, cleaning and maintenance of common areas and amenities within the compound. The amount varies according to the age, the size and also the quality of services provided.
3. Internet/Telephone Fee – depending on the compounds set up. Some compounds are limited to 4GB, however, some compounds have upgraded to 100GB. Estimate RMB100 to RMB300 per month.
4. Cable TV – cable TV refers as local channels only. This is usually insufficient to the foreigners. Estimate RMB30 per month.
5. Satellite TV – there are varies package to choose from. Estimate RMB200 to RMB400 per month
6. Club membership – estimate cost for club membership is RMB400 to RMB800 per month
7. House keeping – once a week house keeping arrangement is estimated to be at RMB400 toRMB500 per month
8. Parking Lot – this can be separately rented from the management office. Estimate RMB300 to RMB500 per month (depending on the compound)
9. Non-standard items – there may be additional items to be provided by the landlord for example air purifier units, vacuum cleaners, additional TV etc…
10. Commission – 1 month net rent to the Realtors involved in the transaction.

11. Security Deposit – Usually one month for 12 months’ lease and two months’ for 24 months’ lease. However, some landlords may request for 2 months’ deposit especially if the property which is fully renovated and well furnished. This will be paid by the Company if it is signed by the Company.

    Rental Payment Period – quarterly payment practice in Chengdu

    Out-Of-Pocket Expenses – Utilities such as water, electricity and gas. Most landlords do not want to include utility as part of rent. If Company provides this benefit to the Assignee, the Assignee will need to reimburse from his Company separately. In addition, any items that are listed under “top-up rent” which do not cover by the Company will fall as out-of-pocket expenses by the Assignee accordingly.

    Typical Duration of the Lease – 12 months lease, it will be usually be fixed lease. If 24 months lease, first 12 months will be fixed, 13th months onwards will be flexible.

    Standard Kitchen Appliances – Washer, Dryer and Refrigerator. However, Dishwasher and Oven may not be available as standard items depending on the structure of the kitchen cabinets.

    Standard Electrical Appliances – TV, DVD players are standard items if the property comes fully furnished.

    Non-Standard Electrical Appliances – Vacuum Cleaner, Microwave Oven, Toasters, Cooker, Dehumidifier and Humidifier etc… If these items are required, please specify it to the Realtor. IMPORTANT NOTE: The landlord has no obligation to provide addition furniture or appliances once contract is signed and/or when lease commences.

    TYPE OF PROPERTIES

    Properties in China are mainly privately owned properties. There are variety of properties, i.e. apartment (serviced or non-serviced), townhouses, semi-detached and detached villas. Rent varies by the community, quality of the properties, management services and location.

    Private Properties – Developer-owned properties:

    This is always the most preferred properties as the properties are well-kept by the developer. After-sales service is just a phone call away. Developer-owned units tend to be 10% to 15% higher in rent. Properties are fully furnished, there are choice of furniture to select from. Some properties compounds do provide housekeeping service. Bedlinens, towels, kitchen utensils etc… are not included standard items.

    Private Properties – Private ownership:

    This stands 70% of properties in the leasing market. These are properties owned by private individual. The decoration of the properties varies from each other. The property is usually not in tip-top condition at the point of viewing as most owners will only clean up/renovate the properties when a tenant is identified. Most properties are assigned to a managing company to manage the after sales needs. Repair attentions are anticipated. Properties can be fully furnished with various arrangement i.e. takeover existing furniture in the property, request an allowance to purchase new furniture OR to lease furniture from a furniture leasing company. Bedlinens, towels, kitchen utensils etc… are not included standard items.

    Serviced Apartment:

    A good option for single or couple profile of assignees. It is hassle free properties. Fully furnished apartment inclusive of housekeeping service. However, such apartment is generally smaller in size, it may not be suitable for assignee with children and pets. In addition, if assignee does not like to stay in hotel-like apartment, this will not be a good option.

    Property Conditions:

    Some properties are owned and managed by one single developer whilst most of other properties are
    As there are distinctive four seasons in China, weather can be extremely dry during winter and wet during summer. Most of the time, especially for houses with basement, situation with mould on walls is common. Other common problems like water leaking due to the poor workmanship of the properties are usual complaints. Repairs attentions are anticipated during the initial stage of the lease. After Sales support is very important from the realtor and relocation provider.

    New Compound vs Old Compound:

    There are no distinct definitions on new and old compounds in China. Conditions of the compound largely depend on the management company who manage the entire development, providing up to the international level of requirement is one of the crucial considerations. That includes security management, compound management as well as event management within the community.

    Commuting Times:

    Traffic situation in China is unpredictable. With a usual 30 to 40 mins driving distance, it can take over an hour during an extremely bad traffic day. Generally, rush hour is 7:30am to 9:30am in the morning and 4:30pm to 7:30pm at the evening. Traffic gets heavier on Friday.

    Measurements:

    You will notice that the unit of measurement in China is generally square meter. For conversion to square footage it is sqm x 10.763.

    Internet Speed:

    The speed of internet varies compound-to-compound. If this is an important element, it is good to check with the Realtor the highest speed accessible in the selected compound. Please also note that the internet speed indication may differ from the actual use. This means if the compound can support 20MB, you may feel you are not getting a 20MB speed. This is not in the control of the Landlord, Realtor and the Compound Management Office.

    Prohibited Websites:

    Facebook and YouTube are not accessible in China. Google, GMAIL or YAHOO may sometimes experience slow response.

    Temporary Residence Permit (TRR):

    This document is mandatory by the Chinese government. This needs to be registered within 48 hours upon arrival. This document needs to be updated when there is a change in address, residence permit renewed, passport renewal etc..First time registration shall be arranged by the Realtor, this will be done on the day of check in. Please present all original passports to the realtor and they will send to the Police Station for this registration. Original passports shall be returned on the same day. Subsequent update, assignee can manage with the Compound Management Office directly.