Hong Kong law is pro-landlord

June 20, 2006

Hong Kong condominium unitsRecent changes in the law such as the removal of the security of tenure and the ability to forfeit a contract after 15 days of delay in rental payment (or persistent delays in payment) have changed the balance of power in favor of the landlord.

Rent: Can landlord and tenant freely agree rents in Hong Kong?

Rents are freely negotiated in the private sector, which comprises about half of the rental market. Only a small proportion of the public rental market is actually rent subsidized. Subsidies provided by the Hong Kong Housing Authority (HKHA) and Hong Kong Housing Society (HKHS) are based strictly on the tenants' ability to pay. Young, working tenants are not subsidized at all, while elderly and disabled people can apply up to 50% rent reduction.

Deposits

Security deposits are equivalent to two, occasionally three, months' rental. Once the Tenancy Agreement is signed, the deposit is held by the landlord without interest and refunded to the tenant upon expiration of lease. The cost of any damage or reinstatement work necessary to the apartment, other than fair wear and tear, will be deducted from the deposit before repayment.

What rights do landlords and tenants have in Hong Kong, especially as to duration of contract, and eviction?

There are two types of rental arrangements in Hong Kong, a Lease (for tenancies greater than 3 years) and a Tenancy Agreement (for tenancies not exceeding 3 years). There are no significant differences between the two except for the length of tenancy.

The Landlord and Tenant (Consolidation) Ordinance 2004 removed security of tenure, i.e. domestic tenants no longer have the statutory rights to renew their tenancy at prevailing market rates.

For tenancies created after July 9, 2004, termination of contracts is done in accordance to the terms of the tenancy or as agreed between the parties. Unless both parties agree, there is no way to end a fixed term tenancy before the expiration of the lease agreement.

A periodic tenancy, however, will be terminated by a notice to quit in accordance with the common law, typically one rental period (e.g. 1 month's notice for a month-to-month tenancy).

The landlord can prematurely terminate a domestic tenancy for the following reasons:

  1. non-payment of rent within 15 days of the due date;
  2. use of the premises for immoral or illegal purposes;
  3. unnecessary annoyance, inconvenience or disturbance including persistent delay in payment of rent; and
  4. structural alteration to the premises without the landlord's consent

Hong Kong luxury interior designsIf a tenant refuses to vacate the property after the tenancy agreement expires, the landlord should apply for possession from the Lands Tribunal (if the outstanding rent is below HK$1,000,000 (US$129,025)) or other Courts before the tenant can be made to leave. The other courts are:

  • the District Court if the outstanding rent does not exceed HK$1,000,000 and the rateable value of the property does not exceed HK$240,000 (US$30,966); or
  • the Court of First Instance of the High Court for outstanding rent of any amount (however, they will not entertain cases falling under the jurisdiction of the Lands Tribunal and the District Court).

If the landlord is successful in obtaining a judgment against the tenant, he will be able to apply to the tribunal/appropriate court for a Writ of Possession. Upon the issue of the Writ of Possession, the court bailiff will recover the possession of the property on the landlord's behalf. It is a criminal offense to harass and illegally evict tenants and sub-tenants. Tenancy contracts usually contain a clause that prohibits the tenant from subletting the property to another party. Any subletting by the tenant will be a breach and the landlord can institute legal action for compensation.

EVICTION FOR NON-PAYMENT OF RENT

Duration until completion of service of process 7
Duration of trial 35
Duration of enforcement 150
Total Days to Evict Tenant 192
Courts: The Lex Mundi Project

How effective is the legal system in Hong Kong?

The Lands Tribunal is the major body responsible for handling tenancy disputes. The tribunal is characterized by informality. The presiding officer plays a more intervening role and is more ready to discuss the issues with the parties. If a tenant fails to pay rent and the landlord intends to recover the outstanding rent but not to regain possession of the properties, then the landlord may make his claim for rent arrears at one of the followings.


Legislation

Hong Kong Repulse Bay BeachThe laws on tenancy in Hong Kong are largely governed by the Landlord and Tenant (Consolidation) Ordinance 2004 and implemented by The Rating and Valuation Department, supplemented by Common Law (i.e. the case law that has been built up over many years).

Stamp Duty

A person who leases out or sells property is subject to Stamp Duty. The rates of Stamp Duty for selling properties are different from the rates for leasing out properties. Stamp Duty for leasing out properties varies depending on the term of the lease agreement. Stamp Duty is borne both by the tenant and landlord.

Comments

Peter | May 08, 2010

I have signed a 2 years contract with the landlord which carries a fixed rent for 24 months.
At around the 12th month, the landlord wishes a raise and said that they have the right to ask me to leave by the end of the 13th month if I am not willing to accept the raise.
I have found out that the contract I have signed,on the last clause, which is a hand written one, states that BOTH tenants and landlords have the right to terminate the contract after the 13th month, and I do not realize that while I sign the contract.
1. is this clause lawful_I feel like being cheated by the estate agent cause she told me I have the right to do so only, and this is the usual way to protect the tenant.
2. Why not just sign a one year contract or 13 months contract, instead of a 2 years contract and let the landlord throw me away after 13 months.
The contract was a general contract signed inside an estate agent firm and I really don't realised that clause. What can I do, should I accept the raise or can I object their raise with a reason.

Sally | May 19, 2010

I recently left an appartment and my landlord is holding my bond. When the removalist shifted my safe they left some marks in the floorboards. The landlords own contractor quoted me $880 to fix the scratches. The landlord now tells me that he's not happy with the job and says that the whole apartment needs to be resanded to fix the scratches. The cost will be $5,300 and he says that he'll be duducting this from my bond. What recourse do I have now? I think it's ridiculous to have to pay for the entire floor when just a few boards were scratched, but he won't let me get a second opinion from another contractor. Thanks.

Bob | July 08, 2010

I have never had a tenant as difficult as the one I recently rented my flat to. The person is always complaining and asking for things to be fixed which I have done.

This person is now late by a couple of days with the first rental payment, and keeps saying it will be paid but it is'nt. I've a feeling that this person will continue this way and want to ask what you think I should start to do to cover myself and prepare for a potential legal case?

Scott | July 14, 2010

we have been in our apartment for over 8 years. For the past 6 years we havent actually had a contract, we have paid our rent on time and done any repairs ourselves . We have just received notification that our landlord wants the place back for his own use. How long does he have to give us to leave the apartment without a contract stipulating a time. As we had no plans to move we obviously would like to negotiate as long as possible!

Sylvain | July 21, 2010

Hi,
I have few questions related with an appartment I rent with my wife at the moment.
We had a tenancy agreement from March 2009 to March 2010 for an appartment in MidLevels West.
From March 21st, 2010 we are still leaving in the appartment without signed tenancy agreement.
We exchanged few emails with the landlord where I have agreed in a new tenancy agreement(the draft of this agreement includs a notice saying that we are "blocked" during 10 months and then after we have 2 months notice to leave the appartment) but as she is leaving in London she didn't arrange yet for this new agreement to be signed.
Recently (one month ago) a building very close to us started to be demolished. They are drilling one by one each floor of that building and after having called the Building Dept of the HK gov we learned that they will build a new 30 floors tower instead (and immediatly after demolition)...
As you can imagine drills are already making a lot of noises - and we are really afraid of the pilling that will be required for the new tower. My wife is not working - so she stays at home quite often and we would like to leave the appartment ASAP...
My questions are:
- Do I have to fullfill the "draft" of tenancy agreement which is not signed but agreed by email ?
- If not what are the rules applied ? How can I leave the appartment quickly and recovering my 2 months deposit ?
- What are the risk of stopping the transfer (to pay) of the rent to the landlord account ?
Thanks in advance for your help !

Mari | August 07, 2010

Our flat is being rent since march 2010. And few days ago there was apparently a pipe burst in the bathroom and flooded the whole flat which is obviously need renovating.it needs of changing all of the floors. We are desperately want to have the problem fix as soon as possible and we already have people ready to do the job which will take two weeks..So we told our tenant to get a temporary accomodation or live around it..They would prepare to get temporary accomodation but in our expense which we absolutely disagree..We already offered them 1month rent free once the flat is fix but not good enough for them .I think were being generous already..Is it legal to just give their deposit back and tell them to move out completely so we can have our flat fix and move on..

Kay | August 30, 2010

scott, do you have any updates?

i have gotten several calls from new landlord to vacate the apartment for self occupation. every week a call for the same reminder. unilaterally gave me till mid sep. i dont want to leave yet as haven't find anything suitable as new home. consulted with the land valuation tenancy consultant at 21508229 they told me to wait for the court order, the owners refusal of accepting rent will be used for filing court order. which is very common in hong kong as there is over 50% of habitants are landlords.

Second years lease agreement said any party can give one month notice to terminate contract.

Anyone with similar experience and managed to stay at least a few more month till the right apt is available... btw, i am on my second yr's lease to expire next year in march 2011.

georgen | December 28, 2011

Recently I signed a contract for renting a room. The landlord did not give me a copy of of the one year contract for 1st and last month rebt & a deposit. I paid half in cash and the rest in check. He only gave me the door key (main entry of the unit) but no room key. He told me I can replace the existing by myself. There are three questions want advices:
1. Will it be legal to move-in if I don't have a copy of the rental agreement?
2. Will he sues me or tell police to get me out if I do not have a copy of the legal rental agreement?
3. What is the best method to resolve this case? Can I get my money back and don't move-in OR use lawyer to resolve it?

vincent | June 29, 2013

Is a Lease contract still legally binding if each page is not initialed and only the signature areas are signed?

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