97
we require to understand what sign a three-way agreement
our rights are under the law”. with another bank.
According to Lee, the According to lawyer
transaction is problematic be- João Miguel Barros, exam- Home truths
cause it occurs “before there ples like Ms Lee’s are quite
are titles deed”, meaning that normal in the current set up.
finding a home either to rent or buy can
the buyer has to rely on the de- Barros says that while
be a life-changing decision. If you decide
veloper to enforce the agree- the developer has an agree-
to rent, what are your rights?
ment. In this particular deal, ment, the buyer is not forced
Ms Lee was pushed to negoti- to choose that bank: “Let’s
ate with a particular bank. not forget that there is still
A
home is a home. Whether it is leased or bought, it is
probably the mosty important component of a happy
life. So, when leasing a place to stay, one is looking for
“Fortunately, in this case free will,’’ he says, adding,
the perfect house, rental amount and leasing contract. Soon
I feel they carried out the “The rest is a question of enough, you find out that it is difficult – if not, impossible – to
transaction in a competitive how the market operates.
get the three at the same time.
fashion, their deal was com- When these agreements ex-
After some time searching, the tenant usually gives up
petitive and realistic. But in ist, the buyer can always try
and accepts the conditions stipulated by the landlord. Is the
tenant at the mercy of the landlord? or is the law on his side?
other situations, there could other credit institutions.’’
We tried to find out.
be cases where the consumer
Lawyer João benazra Faria says many leasing contracts
must accept the terms that the Two big issues contain what legally are considered null clauses, clauses that
banks are willing to offer,’’
violate imperative rules of the civil code. one of the most
said Ms Lee. Of course, she is Barros identifies two
common concerns the moment from which the contract can
free to terminate the negotia- significant “strutural issues’’
be terminated by the landlord.
According to article 1038º of the civil code, from the
tion, but this is not necessar- in the real estate business: il-
tenant’s point of view, he or she can stay in the leased house
ily a good choice because it licit counseling by real estate
for three years. This at least, is the interpretation of some
means losing money. agents and the sale of unbuilt legal advisors who helped draft this article, after the decision
units even before a construc- of the Appeal’s court, issued on June 16 2005.
A different environment tion work permit is issued.
“According to article 1038º, the tenant can terminate
“Both are on the list of
the contract at any moment, even before its legal end, if he
Thankfully, due to the main concerns of Macau law-
gives 90 days notice to the landlord. If he does not respect
this notice, the contract is renewed automatically for another
good conditions offered by yers, and neither has been delt
year,’’ the lawyer explained.
the agreed bank, Ms Lee does with effectively by the compe-
However, the landlord, according to the same article, “can
not feel she has lost out. How- tent authorities,’’ says Barros. only terminate the contract two years after its beginning”,
ever, she is now negotiating a He says the first problem
which means that the contract renews automatically for
second deal and the overall enhances the practice of “pre-
another year and only on the third year of contract can he give
scenario is much worse. ventive advocacy” and adds
the due notice saying he wants to terminate it.
That was the interpretation of the Appeal’s court and
“The environment in there are certain functions
Faria agrees with it. So, in practice, even if your contract says
which I was transacting at that that should only be carried
that it can be terminated in one year, “the landlord can only
time - earlier this year - was out by lawyers, in particular terminate it in three years time’’, he says.
different, everything was go- the writing of contracts.
The means to evict
ing up. Property prices were As for the second issue,
going up and everybody was Barros believes there is a
Take a one-year leasing contract at the end of which the
happy. But now the situation loophole in the legal system
landlord wants to evict the tenant. can he do it? “He cannot,’’
says Faria. Nevertheless, sometimes the tenants are afraid:
is dire, the banks are more which the government must
“They do not know their legal rights and submit to the
cautious, they will not lend to close by introducing some
landlords’ decision,’’ he adds.
the extent that they have in the kind of protection mecha- And if the landlord decides to raise the rent? “He can
past,’’ she says. nism for home buyers.
only do this in exceptional situations – for example, if both
Nevertheless, risk is an Throughout his profes-
parties agree in the contract or if the landlord has paid for
integral part of business and sional life in Macau Bar-
extraordinary conservation works,’’ says Faria.
However, as the lawyer puts it, these situations occur
the current market situation ros has seen numerous legal
because of the speculative market that still exists in macau.
has to be dealt with. “tricks” used to avoid re-
“These short contracts – that are celebrated, for instance, just
However, her concern sponsibility should anything for one year – exist because the landlords want to raise the
at the moment is being
m rental after that time,’’ the lawyer explains.
o
go wrong.
forced to take out a
.
c
For instance, he says:
What kind of protection does the tenant have if the
loan without having
landlord wants to terminate the contract before the three legal
oto “Sometimes they sign re-
h
the ability to ap-
p
years or if he wants to raise the rent? Usually, these issues do
k
serve contracts on a house,
c
not even go to court, because a letter written from the lawyer
proach a number
to
they stipulate a deposit and
stating the tenant’s legal rights is enough to settle the issue.
of banks to see
s
u
a
have a clause that excludes However,most cases connected to leasing contracts that
what they can
c
a responsibility.’’ These, in ef-
come to Faria’s office come from landlords and concern the
offer because the
.
m
non-payment of rent by tenants. once again, a legal letter is
w
fect, are a Promissory Con-
developer will not
w usually enough to solve the dispute.
w
tract of Purchase and Sale.
december 2008
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