CHINA Law and Practice Contributed by: Nancy Zhang, Xiaoying Tian, Qian Gu and Liangqian Ying, JunHe
6.18 Right to Assign a Leasehold Interest
exhortation, will result in the rescindment of the lease agreement. Where the lease agreement is so rescinded, the tenant shall reinstate and return the leased prem - ises, and the landlord is entitled to declare its claims to the court, in accordance with the bank - ruptcy proceedings, for the damages incurred thereunder. Where the administrator decides to continue the performance of the lease agree - ment, the landlord must comply. However, the landlord has the right to request the administra - tor to provide security. The lease agreement will then be deemed rescinded if the administrator fails to provide security. 6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations A refundable security deposit is commonly seen in leases to secure the tenant’s performance of the lease. Security deposit is generally in the form of cash or bank guarantee. 6.17 Right to Occupy After Termination or Expiry of a Lease After the expiry or termination of a lease, the ten - ant generally has no right to continue occupying the leased premises. However, if the tenant con - tinues to use the premises after the expiry of the lease without any objection from the landlord, the original lease shall be deemed as remaining in force but without a fixed term. Under such cir - cumstances, either party can terminate the lease at any time, provided that the landlord gives the tenant reasonable prior notice of such termina - tion. In addition, if the landlord intends to lease the premises after the expiry of the lease, the tenant shall have a right of first refusal under the same terms and conditions.
A tenant may sublease part or all of the leased premises to a third party with the prior consent of the landlord. The sublease term should not be longer than the residual lease term of the original lease agreement. The tenant is liable for any damages caused by such third parties to the leased premises. 6.19 Right to Terminate a Lease The following circumstances are often seen in a lease as causes for termination by the tenant: • damage to the leased premises preventing the tenant from using the leased premises; • insolvency of the landlord; and/or • frequent interrupted supply of water, electric - ity, air conditioning or elevators. The PRC laws also give the tenant the right to terminate the lease in the event of: • the leased premises endangering the safety or health of the tenant; • the occurrence of any of the following circum - stances for reasons not attributable to the tenant, thus rendering the tenant unable to use the leased premises: (a) the leased premises being attached by judicial or administrative organs; (b) title claim to the leased premises; or (c) violation of the mandatory provisions of laws and administrative regulations in respect of the requirements on the use of the leased premises. The following circumstances are often seen in a lease as causes for termination by the landlord: • failure by the tenant to pay the rent, manage - ment fee, deposit or other amounts due, and
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