Property owners are not allowed to raise rents without first reaching an agreement with tenants during the contract period and the per capita leasing space should at least equal the minimum standard set by local governments, according to a recent regulation released by the Ministry of Housing and Urban-Rural Development.
The latest effort by the industry watchdog is designed to further regulate the country's residential leasing market and is scheduled to come into effect in February. It also prohibits property owners from dividing apartments into lots of small rooms, which they then rent out separately to make more money. Under the new regulation, rooms in apartments can only be leased based on the original floor plan, China News Service reported yesterday.
Property industry watchdogs will be required to improve residential leasing registration databases. They are also required to publicly release rental levels regularly for various property types in different areas.
"The new regulation was mainly drafted to put a halt to group-renting and protect tenants," said Shao Minghao, a research head with Shanghai Hanyu Property Consulting Co, a major real estate chain in the city. "However, it's hard to say what the real impact will be since we don't know how the government will monitor it. At the moment, less than 30 percent of property owners register rental contracts with the industry watchdog."
Song Huiyong, research director at Shanghai Centaline Property Consultants Ltd, operator of the city's largest real estate chain, agreed.
"According to my knowledge, only 50 to 60 percent of the city's residential leasing deals are signed through real estate agencies like us. Of these deals, only a small number of property owners register their contracts," Song said.
