[Direct answer]In the Beijing area, the handling of breaches of lease contracts usually proceeds in four steps. The first step is to establish the facts of the breach: confirm the objective manifestations of the breach, such as the specific period and amount of rent arrears, the fact of unauthorized subleasing or changing the use of the property, the time point of unauthorized early termination, and the specific circumstances of property damage, and preserve the corresponding communication records, reminder letters, and on-site evidence. The second step is to check the contract provisions: lease contracts typically stipulate the rent payment cycle, deposit handling, termination conditions, breach liability, and compensation items. These provisions are the main basis for asserting rights; if the provisions are unclear, supplementary judgments need to be made in accordance with the provisions of Articles 703 to 734 of the Civil Code of the People's Republic of China (effective January 1, 2021) regarding lease contracts. The third step is to issue a formal notice: request the other party to fulfill its obligations, correct the breach within a specified period, and clarify the consequences of failure to do so. At the same time, retain the delivery certificate, which serves as both a reminder and evidence for subsequent termination or litigation. The fourth step is to choose a remedy path: if the other party corrects the breach within the specified period, continue to perform the contract; if the other party refuses to correct the breach and meets the statutory or contractual termination conditions, exercise the right of termination and demand compensation; if no agreement can be reached, the matter can be submitted to the court or arbitration institution for resolution. It should be noted that the exercise of the right of termination should be carried out after the other party meets the contractual termination conditions or statutory termination circumstances, and the notice should reach the other party. Otherwise, the timing of termination may be inappropriate and constitute a breach of contract.Business and contract disputes in enterprisesThe services in this column can assist in handling rental disputes.

1. Problem background and typical scenarios

Common situations of lease breach include: the lessee defaulting on rent for a long time; transferring or subletting the property without authorization; altering the use of the property without authorization; terminating the lease prematurely without authorization; the lessor repossessing the property without authorization; the lease being unable to be performed due to the property being expropriated; and disputes over the return of the deposit.Real estate transactions and construction projectsThe ownership and contract processing ideas in the column can be used for reference.

II. Key points of contention

Focus One: Judging the achievement of the conditions for termination. Focus Two: The method of calculating the damages for breach of contract. Focus Three: The rules for handling the deposit. Focus Four: Determining the validity of unauthorized subleasing. Focus Five: Handling the situation of expropriation. Focus Six: The procedures for notification and service delivery.Divorce litigation and family disputesThe protection strategies for residential rights discussed in the column can be used as a reference for further study. Focus Seven: The reasonable scope of compensation for losses, including how to calculate the depreciation of renovation investments and the residual value that can be utilized.

III. Professional analysis by Henglue Lawyers

Take a dispute involving a lease reservation contract handled by Attorney Zhu Guiying of our firm as an example: The lessor and the lessee signed a lease confirmation letter stipulating the lease term and rent. The lessor invested in customized decoration according to the agreement. After the decoration was completed and tested and passed, the lessee delayed signing the contract and ultimately decided not to lease the property. The lawyer's strategy in this case was to first confirm whether the reservation contract was established, and then argue that the other party failed to perform its obligations without a legitimate reason after the contract was established and constituted a malicious breach of contract. The court ultimately awarded compensation for the decoration costs. This approach has direct value in protecting rights against lease breaches: the calculation of breach damages should not be limited to the difference in rent already received, but should also include the reasonable investments made by the lessor to fulfill the contract. As long as these investments are causally related to the lease relationship and supported by evidence, they can generally be supported by the court.Creditor's rights and debts, and enforcementThe recovery path in the column can be used as a reference for further study. This case was handled by Beijing Henglu Law Firm.Xiong BinrongAttorney (Practice Certificate No.: 11101202211410897, subject to the certificate issued by the judicial administrative organ) acting as an agent.

IV. Practical Suggestions and Legal Basis

Action recommendations: First, sort out the contract terms and the actual performance; Second, fix the evidence of the breach of contract; Third, issue a written reminder and specify the deadline; Fourth, calculate the losses and prepare the supporting documents; Fifth, evaluate the timing of exercising the right of rescission; Sixth, pay attention to leaving records of the handover and return of the property. Legal basis: Articles 703, 707, 722, 723, 731 and 733 of the Civil Code of the People's Republic of China (effective from January 1, 2021); the specific application shall be subject to the currently effective laws, regulations and judicial rulings. The action recommendations also include: The notice of rescission shall be issued after the expiration of the reminder period, and the written confirmation of the handover of the property shall be carried out simultaneously.

5. Henglu Law Firm's Reminder

Firstly, the right of rescission must be exercised after the conditions are met. Improper timing may constitute a breach of contract. Secondly, the notice of urgency must have a delivery certificate, and oral notifications have weaker evidentiary value. Thirdly, claims for losses require supporting evidence, including investment certificates and expense receipts. Fourthly, the handling of deposits should be clearly stipulated in the contract, which is the most disputed issue in practice. Fifthly, the handover process should be documented to avoid subsequent disputes. Sixthly, in cases involving expropriation or force majeure, the handling rules differ from those for general breaches of contract and require separate assessment.Special services and other casesThe column can also provide explanations on program connectivity.

VI. Frequently Asked Questions

Q1: If the lessee defaults on the rent, how long can the contract be terminated?

It depends on the contractual provisions. If the contract stipulates that the lessee can be relieved of the obligation to pay the rent if the overdue payment reaches a certain number of days, the lessee shall perform the obligation according to the contract and simultaneously comply with the notice procedure; if there is no such stipulation or the stipulation is unclear, the law stipulates that the lessee shall pay the rent according to the contract. If the lessee still fails to pay the rent within a reasonable period after being reminded by the lessor, the lessor may terminate the contract. In practice, it is recommended that when giving a reminder, the specific amount, the performance period, and the consequences of failure to perform within the time limit should be clearly stated, and the lessee should timely notify the lessor in writing to terminate the contract after the expiration date, and pay attention to keeping the delivery certificate. It should be noted that the contract will be terminated once the notice of termination reaches the other party, and the return of the house and the settlement of fees should be handled simultaneously.

Q2: If the landlord takes over the property without authorization, what legal action can I take against them?

You can assert breach of contract liability, which specifically includes requiring the landlord to continue to perform the lease contract, compensate for relocation fees, temporary accommodation fees, and operational losses. If the landlord repossesses the house without a valid reason during the lease period, it constitutes a breach of contract; if the house has serious defects that endanger safety or affect normal living, the landlord also has the obligation to repair them promptly, and failure to do so also constitutes a breach of contract. In practice, attention should be paid to fixing the facts and time points of unauthorized repossession, preserving the receipts of relocation and temporary expenses, and keeping the communication records with the landlord.

Q3: If the lessee sublets the property without authorization, can I terminate the contract?

Yes. If the lessee agrees to sublet the lease, the lessee shall report the subletting situation to the lessor; if the contract clearly stipulates that subletting is not allowed without consent and the lessee sublets without authorization, the lessor may terminate the contract. At the same time, after the lessee sublets, the lessee shall still fulfill the contractual obligations to the lessor, that is, the lessee is still responsible for the problems caused by the sublessee. It is recommended to specify the approval procedures and breach of contract consequences for subletting in the contract, and to verify the actual use situation in daily performance and keep evidence of subletting.Business and contract disputes in enterprisesThe column can also provide explanations on the design of the terms and conditions.

Q4: The deposit has not been refunded yet. What should I do?

First, check the contract's provisions regarding the return of the security deposit: whether there are stipulations on the return time and deduction circumstances, and whether it is allowed to use the security deposit to offset the rent. In practice, common disputes arise when landlords deduct part of the security deposit on the grounds of property damage. It is recommended to first require the landlord to list in writing the items and amounts deducted and provide supporting evidence; if there are disputes over the deduction, they can be resolved through negotiation, mediation, or litigation. It should be noted that landlords generally have the obligation to properly maintain the property and restore it to its original state upon return. Normal wear and tear from normal use should not be fully deducted from the security deposit; at the same time, it is necessary to keep the security deposit receipts, the property handover records, and photos of the property condition at the time of handover.

Q5: If the landlord refuses to issue a receipt, what risks do I face?

The risks are significant. The absence of a receipt can lead to three problems: First, it is difficult to prove the fact of payment, and the payment may be claimed as unpaid or of uncertain nature; Second, there is a lack of basis for the deduction and return of the deposit, which is prone to disputes; Third, in the event of a dispute, the nature and amount of the payment need to be inferred indirectly through other evidence, resulting in higher negotiation costs. It is recommended to actively request a receipt when making payments or to transfer the payment via bank transfer and annotate the nature of the payment and the lease contract number; if the landlord is unwilling to issue a receipt, other methods can be used to leave a record, such as sending a written confirmation message or keeping the payment receipts and corresponding contract terms.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence, to avoid missing the statutory time limits. →Corporate commercial legal services·Attorney Xiong Binrong·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If a dispute arises, please consult a practicing lawyer in time.