Early Termination of Rental Lease: Are Compensation Claims Mandatory?

Should a landlord seek to reclaim a rented property prior to the agreed-upon lease term, the tenant retains the right to pursue compensation for any breach of contract that results in demonstrable harm or financial loss.

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When Can Landlords Reclaim Rental Properties?

According to Article 132, Clause 2 of the 2014 Housing Law, landlords are entitled to unilaterally terminate rental agreements and reclaim their properties under the following circumstances:

– The rental property is state-owned or social housing, and it has been leased without proper authorization, to ineligible tenants, or under inappropriate conditions.

– Tenants fail to pay rent for three consecutive months or more without a valid reason.

– Tenants use the rental property for purposes other than those agreed upon in the lease.

– Tenants unauthorizedly damage, extend, renovate, or demolish the rental property.

– Tenants sublet or lend the property without the landlord’s consent.

– Tenants repeatedly disrupt order or sanitation, affecting neighbors, and fail to rectify the issue after three official warnings from the landlord or local authorities.

– Tenants renovate the property with the landlord’s consent but fail to agree on a new rental price post-renovation. In such cases, landlords may terminate the lease but must compensate tenants accordingly.

Landlords must provide at least 30 days’ notice before terminating a lease prematurely, unless the lease agreement specifies a different notice period.

However, if no formal lease agreement exists, or if the rental period is unspecified or indeterminate, Article 474, Clause 2 of the 2015 Civil Code allows landlords to terminate the rental at any time, provided they notify tenants in advance.

Are landlords required to compensate tenants when reclaiming properties early? (illustrative image)

Are Landlords Required to Compensate Tenants When Reclaiming Properties Early?

While landlords may reclaim properties early under specific conditions, they are liable for compensation if their actions cause damage, as stipulated in Article 132, Clause 4 of the 2014 Housing Law.

If landlords unlawfully reclaim properties early, they must compensate tenants for actual damages incurred. The compensation amount, form, and method are subject to mutual agreement, as outlined in Article 585 of the 2015 Civil Code, considering factors such as lost benefits from property use and actual damages suffered by tenants.

In cases where mutual agreement is unattainable, tenants may file a lawsuit against landlords to seek compensation. The litigation process involves:

– Preparing documentation: A claim for compensation, evidence supporting the claim (e.g., lease agreements, settlement contracts).

– Jurisdiction: According to Article 35, Clause 1, and Article 39, Clause 1(a) of the Civil Procedure Code, district-level People’s Courts handle rental dispute cases.

– Procedure: After filing, the court assigns a judge to review the case, gather evidence, mediate, and schedule hearings. Litigants must pay court fees and provide evidence supporting their claims.

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