November 29, 2020

Survival Tips For Yangon’s Bewildering Real Estate Market

It’s a wonderful way to get to know the city, being chauffeured through Yangon while being charmed by a Real Estate Agent showing you properties from the fabulous, the gated to the downright disgusting. Yet don’t imagine for a moment that leasing a property in Yangon is simple, in fact, it’s simply confusing.

“For people from Asian countries, there are similarities in the real estate system, but for people from the US and Europe, it’s completely a different, and bewildering system”, said Khine Khine Htun, (Kaye) Myanmar Relo Solutions.

Finding an Apartment:
Tip: When searching for a property, Real Estate Agents are there to provide a service – so ask questions and clarify concerns.

There are two ways agents work. Some are the owner’s representative throughout the term of the lease; advising on any maintenance issues and organizing your Form C’s.

Alternatively, once the lease’s signed that’s the end and you may not see the agent again.

Tip: Confirm how you will contact the owner if there is a problem with building maintenance and forms.

Tip: Ask the agent if they are the landlord’s go-between.

Tip: Choose carefully: “People are often taken back by the quality of the housing; some places are pretty dreadful here compared to where they are from. I usually try to convince people to avoid rooftop flats … This is mostly because a lot of the apartments leak and/or are poorly insulated”, said Stuart Deed, Myanmar Real Estate.

Stuart Deed, Myanmar Real Estate
Stuart Deed, Myanmar Real Estate

Found your apartment?
“Foreigners are often required or expected to sign a 12-month lease but the legal basis on which this is derived is vague”, said Peter Waldie, International Lawyer, ‘Unlocking the Economic Potential of Residential Real Heritage ’ (Yangon).

However, demand is low, supply high. “Leases are fairly negotiable in Yangon. Don’t be afraid to ask for what you want or need,” said Deed.

Tip: Negotiate over price and the term of the lease. Before you sign, ask for furniture and maintenance fees to be included in the costs.

“All rent must be paid upfront. This is the biggest surprise for expats,” said Kaye.

When signing the lease you’ll be expected to have on the table, often in cash, the entire rent, agent’s fee and the security deposit.

Agent’s commission: In Myanmar, tenants generally pay a commission to the agent, of one month’s rent for a one-year lease, or two weeks for a six-month lease.

Security Deposit: A month’s bond is standard, which should be returned two weeks after leaving the property.

Do your due diligence: “I would say as much as 60-80% of titles would be uncertain in urban areas of Myanmar,” said Waldie.

With a history of political turmoil, Myanmar properties have been confiscated and/or abandoned as people fled the country. “My advice is to make sure the person you are paying rent to has the right to the apartment,” said Waldie.

As rent is paid in advance, there are opportunities for scammers to pretend to own property and disappear.

Tip: Ask the owner for proof of ownership, such as a land title deed. There are cases of scams involving fake property deeds – this is the risk we take.

It is possible to check land title documents at the Yangon City Development Committee (YCDC) or land office where the property is situated.

BEFORE YOU SIGN:
Checklist: Blackouts are common. Some apartments have back-up generators.

Tip: Ask if the back-up generator works and will it immediately switch on in a blackout.
The voltage is sometimes too high but more commonly too low; both of which can trip the voltage boxes on air-conditioners.

Tip: “Check also that the voltage is steady. Basically, the further away a unit is from the transformer the more variable the electricity supply will be,” said Deed.

Tip: Ask how the water system works and turn on taps to see what comes out and take the top of the toilet cistern off to see what’s inside.

Furniture and equipment:
From the day you move into the apartment you may be responsible for all equipment including fixing air conditioners and water heaters.

Tip: Ask the owner to show any warranties for equipment and negotiate to limit your responsibility to fix any equipment. Ensure you are not responsible for damage to furnishings that would be considered ‘fair wear and tear’.

Tip: “We ask the landlord to write into the lease that maintenance problems less than $50 are covered by the tenant and the landlord is responsible for everything else,” said Kaye.

Tip: From the day you move in, photograph everything! Furniture, damage to walls, tiles, marks on anything.

Khine Khine Htun, (Kaye) Myanmar Relo Solutions

Structural damage
Concerns have been raised over if a tenant is responsible for structural damage to an apartment.

Tip: “My advice is to check whether the lease states you are responsible for structural damage”, said Waldie. If this is the case ask for the clause to be removed, particularly in older buildings.”

Is there a standard lease?
There is no ‘standard’ residential lease.

Tip: See a lawyer or rewrite the lease if you’re concerned.

Stamp duty:
LEGISLATION: Tenants are obligated to pay stamp duty.

Most people are blissfully unaware of the requirement. In most cases, “stamp duty isn’t an issue for tenants unless you end up in court,” said Kaye.

Tip: Go with the owner to pay stamp duty after signing your lease.

Worst case scenario: Don’t rely on courts.
“The Court system is overwhelmed and under-resourced so there is little ability for tenants to resolve disputes legally”, said Waldie. “Beware that while leases say ‘you have a right to quiet enjoyment of the property’ the landlord could turn up any time with the police and terminate the lease”.

Oh the joys!

First published Myanmore

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