CHAPTER 13 CONTRACTS FOR LEASE

Article 212 A lease contract refers to a contract whereby the lessor shall deliver the leased property to the lessee for the latter's use or obtaining proceeds through the use, and the lessee pays the rent.

Article 213 The contents of a lease contract shall contain such clauses as the name, quantity, purpose for use, term of the lease, rent as well as time limit and method for its payment, maintenance of the leased property.

Article 214 The term of a lease may not exceed 20 years; in case of a term exceeding 20 years, the exceeding part shall be invalid.

At the expiry of the term of the lease, the parties may extend the lease contract; however, the extended term of the lease agreed upon shall not exceed 20 years as of the date of extending the contract.

Article 215 Where the lease term is above 6 months, the lease contract shall be in written form. If the parties do not conclude it in written form, it shall be deemed an unfixed lease.

Article 216 The lessor shall deliver the leased property to the lessee and keep it being fit for the use according to the terms of the contract during the term of the lease.

Article 217 The lessee shall use the leased property in accordance with the methods agreed upon in the contract. Where there is no agreement in the contract on the methods for using the leased property or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, the leased property shall be used in a manner in light of its nature.

Article 218 Where the lessee uses the leased property in accordance with the methods agreed upon in the contract or the nature of the leased property and causes losses to the leased property, the lessee shall not bear the liability for damages.

Article 219 Where the lessee uses the leased property not in accordance with the methods agreed upon in the contract or the nature of the leased property and causes losses to the leased property, the lessor may rescind the contract and claim compensation for losses.

Article 220 The lessor shall perform the obligation of maintenance of the leased property, except as otherwise agreed upon by the parties.

Article 221 The lessee may request the lessor to maintain and repair the leased property within a reasonable time limit when the leased property needs maintenance and repair. Where the lessor fails to perform the obligation of maintaining and repairing the leased property, the lessee may maintain it by itself, and the expenses for the maintenance shall be borne by the lessor. Where the maintenance affects the use of the leased property, the rent shall be reduced or the lease term shall be extended correspondingly.

Article 222 The lessee shall keep the leased property in proper storage. In case that improper storage causes destruction of, damage to or lost of the leased property, the lessee shall bear the liability for damages.

Article 223 With the consent of the lessor, the lessee may improve or add other items to the leased property.

Where the lessee improves or adds other items to the leased property without the consent of the lessor, the lessor may request the lessee to restore it to the original conditions or compensate for the losses.

Article 224 With the consent of the lessor, the lessee may sublet the leased property to a third party. In case of subletting by the lessee, the lease contract between the lessee and lessor shall continue to be effective, and the lessee shall compensate for the losses if the third party causes losses to the leased property.

Where the lessee sublets the leased property without the consent of the lessor, the lessor may rescind the contract.

Article 225 The proceeds gained due to possession or use of the leased property shall belong to the lessee, except as otherwise agreed upon by the parties.

Article 226 The lessee shall pay the rent according to the time limit agreed upon in the contract. Where there is no agreement in the contract as to the time limit for payment or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, the rent shall be paid at the expiry of the lease term if the lease term is less than one year, or shall be paid at the expiry of every one full year if the lease term is more than one year, the rest of rent shall be paid at the expiry of the lease term if the remaining lease term is less than one year.

Article 227 Where the lessee fails to pay or delays the payment of the rent without justified reasons, the lessor may require it to pay the rent within a reasonable time limit. If the lessee fails to pay the rent according to the time limit, the lessor may rescind the contract.

Article 228 Where a third party claims rights and makes it impossible for the lessee to use or obtain proceeds from the leased property, the lessee may request a reduction of rent or not to pay the rent.

Where rights are claimed by a third party, the lessee shall notify the lessor promptly.

Article 229 In case of a change with regard to the ownership of the leased property, the effectiveness of the contract shall not be affected.

Article 230 If the lessor sells out a leased house, it shall, within a reasonable time limit before the sale, notify the lessee and the lessee shall have the right to priority to buy the leased house on equal conditions.

Article 231 If, due to causes which are not attributable to the lessee, part or all of the leased property is damaged, destroyed or lost, the lessee may request for a reduction of the rent or not to pay the rent. If the damage to or destruction or loss of part or all of the leased property makes it impossible to realize the purpose of the contract, the lessee may rescind the contract.

Article 232 Where there is no agreement between the parties in the contract as to the term of the lease or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, such lease shall be considered to be an unfixed lease. The parties may rescind the contract at any time, but the lessor shall, at the rescission of the contract, notify the lessee before a reasonable time limit.

Article 233 Where the leased property endangers the safety or health of the lessee, even if the lessee knows the leased property does not meet the quality requirements when concluding the contract, the lessee may rescind the contract at any time.

Article 234 Where the lessee is deceased during the term of a house lease, the persons who live together with the deceased may lease the house in accordance with the original lease contract.

Article 235 The lessee shall return the leased property at the expiry of the lease term. The property returned shall be in conformity with the conditions after use according to the terms of the contract or the nature of the leased property.

Article 236 Where the lessee continues to use the leased property after the expiry of the lease term, and the lessor does not raise objection, the original lease contract shall continue to be effective, but the lease term is not fixed.