Case Introduction

       Hong and Li signed a lease agreement on May 24, 2017, which stipulated that Li would lease a house rented by Hong for a period from June 1, 2017 to May 31, 2022. The agreed rent standard was 6000 yuan per month. After each lease year, the rent for the new lease year would increase by 200 yuan per month, and so on until the contract expired. At the same time, the contract stipulates a deposit of 6000 yuan for the first month's rent, and stipulates that the deposit can be deducted from the rent, penalty, and other expenses that should be borne by Li after the contract expires or is terminated, and the remaining amount will be returned in full. After the expiration of the contract period, both parties will communicate through WeChat to renew the lease for one year, with a rent standard of 6600 yuan. The lease will be renewed for another month, with a lease term until June 30, 2023.

        At the end of June 2023, Li proposed to terminate the contract and refund the deposit to Hong, who agreed to terminate the contract. On June 25th, Li moved out of the rented house, but when Hong collected the house, he found that some of Li's belongings were still left inside and had not been moved out. Therefore, Hong did not agree to refund the deposit. In this situation, Li refused to return the key to the house. On June 30th, Hong changed the lock of the house and installed surveillance cameras. Later, Hong contacted Li to clear the contents of the house, but Li did not reply.

Hong believes that after the lease term, Li left behind items in the house and did not clear them in a timely manner, causing the house to be unusable and causing losses to himself. He sued the court and demanded that Li pay a rent of 34000 yuan (calculated at a monthly rate of 8000 yuan, based on market prices) for the period from July 1, 2023 to November 7, 2023, and also demanded that Li return the remaining keys and clean up the remaining items in the house.

         Defendant Li stated that he moved out of the leased property on June 25, 2023 and verbally informed Hong that he had vacated the property and also returned some of the keys to the intermediary. Therefore, the lease relationship between the two parties was terminated on June 25, 2023. Regarding the issue of returning the keys to the house, Li stated that he handed over the commonly used wooden door keys to the intermediary on June 25, 2023. The anti-theft door was not used normally, so he forgot to return it. The bedroom door has not been locked, so the remaining keys have not been returned. Li also stated that due to the good relationship between the two parties at the time, he knew that Hong needed to rent out the house again. Therefore, when he moved out, he informed Hong that the remaining items in the house should be handled by Hong himself. Li believes that since Hong replaced the house key with a monitoring device on June 25th, he has never entered the house, let alone used it. Therefore, he does not intend to pay Hong a usage fee for this period.

Court Trial

       After trial, the Dongcheng Court held that regarding the time of contract termination, Li moved out of the involved house on June 25, 2023, and according to Hong's request, he had already handed over the wooden door key to the real estate agency. Therefore, Hong had actual control of the involved house on June 25, 2023, and the lease contract was terminated on that day.

        Regarding Hong's claim for rent from June 26, 2023 to November 7, 2023. The court holds that upon the expiration of the lease term, the lessee shall return the leased property. The returned leased property shall be in its condition after use according to the agreement or according to the nature of the leased property. Considering that there are some items in the house involved that Li has not cleared, Hong has requested Li to clear the items, but Li has not submitted evidence to prove that he has informed Hong to abandon the items in the house. Li should pay for the occupancy and use of the house. At the same time, as the lessor, Hong has the obligation to collect the house in a timely manner and avoid further losses. He shall not claim the occupancy and use fee of the house indefinitely on the grounds that there are items belonging to the lessee in the house. Therefore, the court ruled at its discretion that Li should pay Hong a possession and usage fee of 1100 yuan for the period from June 26, 2023 to June 30, 2023, and rejected Hong's other litigation claims. Considering that Li's previous deposit was not refunded by Hong, Hong should refund the remaining deposit to Li after deducting 1100 yuan of possession and usage fee.

       After the first instance verdict, Hong appealed against the verdict and upheld the original verdict in the second instance. The case has now come into effect.

Judicial interpretation

        Judge Huang Bizhen analyzed that according to Article 591 of the Civil Code, if one party breaches the contract, the other party should take appropriate measures to prevent the expansion of losses; If appropriate measures are not taken, resulting in the expansion of losses, compensation shall not be requested for the expanded losses. The reasonable expenses incurred by the parties to prevent further losses shall be borne by the defaulting party. In this case, after the lessee Li actually moved out of the house and the contract was terminated, although Li still had some items left behind, Hong failed to collect the house in a timely manner to avoid further losses, and should also bear the adverse consequences arising from this.

        Huang Bizhen suggests that when signing a lease agreement, the lessor and lessee should try to consider the delivery of the property and the handling of leftover items. It should be explicitly stipulated in the contract that the lessor can handle the leftover items on their own to avoid disputes.

Huang Bizhen reminds the landlord that if there is no clear agreement between the two parties, according to the above legal provisions, the defaulting party's behavior leads to damage, and the landlord should take measures to reduce the damage. When disposing of the lessee's property, the lessee can be notified in a timely manner and given a reasonable period of time to clear the items.

      Huang Bizhen also reminds that as tenants, upon the expiration of the lease term, they should promptly fulfill relevant obligations, such as vacating the house, clearing items, etc., to ensure that it does not affect the normal use of the house or re lease it, and to avoid causing losses to the lessor due to improper performance of obligations.

This article is taken from the Dongcheng District Court in Beijing, and we would like to express our gratitude.