China Rental Laws: Pro-landlord, Neutral or Pro-tenant?

China landlord and tenant laws are judged by the Global Property Guide to be Pro-Landlord between landlord and tenant. While the laws aim for neutrality, landlords usually hold the upper hand—especially in terms of bargaining power and practical enforcement. That said, the government has been gradually introducing more tenant-friendly policies to address growing urban rental pressure.

Rents: Can landlord and tenant freely agree rents in China?

The amount of rent can be freely agreed on between the landlord and the tenant.

In August 2021, China introduced new national rent control measures, limiting annual rent increases to a maximum of 5% across all urban areas. These urban regions account for more than two-thirds of the country’s population and encompass the majority of China’s approximately 250 million renters.

Deposits

Security deposit is usually about two to three months' rent. A down payment or advance payment for one month's rent is also usually required. In some cases, deposit is only one month's rent but the tenant has to pay 3 months' rent in advance.

Within 20 working days after the end of the tenancy, the guaranty money is returned without interest and after deducting costs for repairs and unpaid utilities. If the deposit is not sufficient, the tenant is usually required to remit the amount within the 15 days.

What rights do landlords and tenants have in China, especially as to duration of contract, and eviction?

There is no legally mandated minimum lease term, while the maximum allowable duration is 20 years. Upon expiration, the lease may be renewed by mutual consent; however, any renewed term must also not exceed 20 years from the date of renewal. For leases lasting more than 6 months, a written contract is required. If the parties fail to formalize the lease in writing, it will be treated as having an indefinite duration.

In situations where no specific lease term is agreed upon and it cannot be determined from supplementary agreements, other contract terms, or standard business practices, the lease will be considered to have an indefinite term.

Rent payment terms can be freely negotiated between the parties; however, it is quite common for rent to be paid in advance on a monthly or quarterly basis.

How effective is the Chinese legal system?

Most contracts ask for a friendly settlement for disputes regarding landlord and tenant relation. Households have to obtain permits to lease out their properties, and all tenancies and sub-tenancies must be registered with the respective local agency such as the Beijing Municipal Public Security Bureau.

Legislation

Lease agreements in China are primarily governed by the following legal instruments:

• The Civil Code of the People’s Republic of China, which came into effect on January 1, 2021 (the "PRC Civil Code");
• The Law on the Administration of Urban Real Estate of the People’s Republic of China, last revised in 2009 (the "PRC Urban Real Estate Law");
• The Supreme People’s Court’s Interpretation on Several Issues Concerning the Application of Law in the Trial of Disputes over Urban Housing Lease Contracts, most recently amended in 2020 (the "Lease Contract Interpretation").