Tenancy Matters

In the absence of a relevant condition in the tenancy agreement, Part IV of LTCO provides that a landlord may forfeit a domestic tenancy for the following acts by the tenant:

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.

Any party to a tenancy may apply to the Commissioner for a certificate as to the primary user of the premises at a fee of HK$3,850. The certificate shall, for all purposes, be prima facie evidence of the facts set out in the certificate as to the primary user of the premises; and of the primary user of the premises on the day when they were inspected.

Under Part IV of LTCO, a person to any tenancy may apply to the Lands Tribunal to determine whether or not a tenancy is domestic and the Lands Tribunal may determine that question for the purposes of Part IV of LTCO.

A “subdivided unit” means premises that form part of a unit of a building. In general, the scope of regulation covers subdivided units of domestic, industrial and commercial buildings, and different types of subdivided units (including cubicles, bedspaces, space capsules, lofts, cage homes, rooftop houses and podium houses, etc.). However, it does not cover “squatters” or “New Territories Exempted Houses”.

A tenancy which fulfills all of the following conditions is a “regulated tenancy” under Part IVA of the Ordinance –

1. the tenancy commences on or after 22 January 2022;
2. the tenancy is a domestic tenancy;
3. the subject premises of the tenancy are a subdivided unit;
4. the tenant is a natural person;
5. the purpose of the tenancy is for the tenant’s own dwelling; and
6. the tenancy is not one specified in Schedule 6 to the Ordinance, i.e. the tenancy is not an excluded tenancy (see Q.8 below).

Under Part IVA of the Ordinance, “unit”, in relation to a building, means premises of the building falling within either or both of the following descriptions –

1. premises that are demarcated or shown as a separate unit (however described) in the building plan of the building;
2. premises that are referred to in the deed of mutual covenant of the building as a unit (however described), and the owner of which is entitled to its exclusive possession, as opposed to the owners or occupiers of other parts of the building.

(see Q30 and 31 below on access to building plan and deed of mutual covenant)

Tenancies specified in Schedule 6 to the Ordinance are excluded from the application of Part IVA of the Ordinance. Such tenancies include –

1. A tenancy of which the landlord is the employer and the tenant is the employee in possession of the premises in accordance with the terms and conditions of the tenant’s employment, being terms and conditions requiring the tenant to vacate the premises on ceasing to be so employed;
2. A tenancy –
   1. that is not a sub-tenancy;
   2. the subject premises of which are demarcated as a bedroom in a unit of a building in the latest building plan of the building, which is the latest building plan approved by the Building Authority under the Buildings Ordinance (Cap. 123) as at the date on which the occupation permit in relation to the building is issued; and
   3. the landlord of which is a natural person and residing in the unit at the commencement of the tenancy;
3. A tenancy of premises under the Hong Kong Housing Society’s “Letting Scheme for Subsidised Sale Developments with Premium Unpaid”.

So if the relevant tenancies of the premises being rented out satisfy (1), (2) or (3) of the above, they are excluded from regulation under Part IVA of the Ordinance.

If an oral tenancy fulfills all of the conditions for a “regulated tenancy” under Part IVA of the Ordinance (see Q6 above), the oral tenancy of the subdivided unit is also regulated under Part IVA of the Ordinance. The statutory requirements and mandatory terms are to be implied into the oral tenancy of the subdivided unit.

If the landlord and tenant of a subdivided unit have entered into a tenancy orally for a first term tenancy and the first term tenancy has commenced, the tenant may in writing demand the landlord to, within 30 days, serve on the tenant a written tenancy agreement reflecting the contents of the oral tenancy. If the landlord fails to do so, the tenant may elect either (a) to withhold the payment of rent until the landlord has done so; or (b) to terminate the tenancy by within, 7 days after the specified period of 30 days mentioned above, giving the landlord not less than 30 days’ prior notice in writing of the termination.

In general, the scope of regulation of Part IVA of the Ordinance covers subdivided units in residential, industrial and commercial buildings. If a tenancy of the subdivided unit fulfills all of the conditions for a “regulated tenancy” under Part IVA of the Ordinance (see Q6 above), including the tenancy commences on or after 22 January 2022; and the tenancy is a domestic tenancy, etc., the tenancy is a “regulated tenancy” and is regulated by the relevant legislation.

In case of a dispute, the landlord and tenant concerned may apply to the Lands Tribunal to determine whether or not the tenancy for the premises is a “regulated tenancy” for the purposes of Part IVA of the Ordinance. For information on the court’s application procedures and fees etc., please visit the webpage of the Judiciary or contact the Lands Tribunal (webpage: www.judiciary.hk/en/court_services_facilities/landsf.html; address: 38 Gascoigne Road, Jordan; and telephone number: 2771 3034).

As stated in Q5 above, “subdivided unit” under Part IVA of the Ordinance does not cover “New Territories Exempted Houses” because “subdivided unit” means premises that form part of a unit of a building; and that “building” means a building or structure constructed or adapted for use in accordance with a building plan. Under Part IVA of the Ordinance, “building plan” means a plan (a) approved by the Building Authority under the Buildings Ordinance (Cap.123); or (b) prepared by the Hong Kong Housing Authority in relation to a building to which the Buildings Ordinance does not apply under section 18(2) of the Housing Ordinance (Cap 283). As “New Territories Exempted Houses” are not covered under the approved building plan, the scope of regulation under Part IVA of the Ordinance does not cover “New Territories Exempted Houses”.

A Template for Tenancy Agreement for a Regulated Tenancy to which Part IVA of the Ordinance applies (“template”) has been prepared by the Government for general reference purpose and can be downloaded from the webpage of the Rating and Valuation Department (“RVD”) （www.rvd.gov.hk/en/our_services/tenancy_matters.html）. The landlord and tenant of a “regulated tenancy” may use and adapt the template with such modifications as appropriate (except mandatory terms) to suit their own circumstances. They are reminded to take note of the requirements applicable to a “regulated tenancy” as set out in Part IVA of the Ordinance and ensure that the requirements are complied with. If they have doubts about how the provisions in the template are to be applied or interpreted in their cases, they should consult their legal advisors or other professionals as appropriate.

According to Part IVA of the Ordinance, the mandatory terms are to be impliedly incorporated into every “regulated tenancy”. The mandatory terms bind the landlord and tenant of the tenancy. The landlord and tenant of a “regulated tenancy” may negotiate to include other requirements or provisions in the tenancy agreement. However, if such other requirements or provisions are in conflict or inconsistent with the mandatory terms, the mandatory terms shall prevail.

No. The template is for general reference only. The landlord and tenant of a “regulated tenancy” may use and adapt the template with modifications as appropriate, or enter into a tenancy agreement on their own terms, as long as there is no conflict or inconsistency with the mandatory terms of a “regulated tenancy”.

No. Even if a tenancy purports to be a tenancy for a term other than 2 years, the term of the tenancy is taken to be 2 years under Part IVA of the Ordinance. A tenant of a first term tenancy for a subdivided unit is entitled to be granted a second term tenancy of the regulated cycle, thus enjoying a total of 4 years (first term of 2 years plus second term of 2 years) of security of tenure.

If the landlord, without reasonable excuse, refuses or neglects to comply with this requirement, the landlord commits an offence and is liable on conviction to a fine at level 3 (HK$10,000), and in the case of a continuing offence, to a further fine of HK$200 for each day during which the offence continues.

Under Part IVA of the Ordinance, a tenant of a “regulated tenancy” may, by giving the landlord not less than 30 days’ prior notice in writing, terminate the tenancy. However, the date of termination must not be a date earlier than the last day of the first year of the term.

If there is no other provision in the tenancy agreement that the tenant may determine the tenancy during its term other than that provided in the Ordinance, the tenant is subject to the restriction that the date of termination of the tenancy cannot be earlier than the last day of the first year of the first term tenancy or the second term tenancy. Nonetheless, Part IVA of the Ordinance does not prohibit a tenant of a “regulated tenancy” from surrendering the tenancy to the landlord before the expiry of the term if both parties can reach a consensus. In the present case, you may negotiate with the landlord on early termination of the tenancy, but the landlord is not obligated to accept your request.

If a tenant foresees that he/she may need to terminate a “regulated tenancy” early under certain circumstances, he/she may wish to negotiate with the landlord to secure such a right for early termination in the tenancy before entering into the first term tenancy. Part IVA of the Ordinance does not limit any rights of the tenant (and the tenant only) to terminate the tenancy by notice under the tenancy.

A landlord of a first term tenancy for a subdivided unit must, within the offer period, make a second term offer in Form AR1 (to be available from October 2023) to the tenant for a second term tenancy of the regulated cycle for the subdivided unit, and serve the offer on the tenant. The landlord must state the proposed amount of rent for the second term tenancy in Form AR1 and sign the Form.

Offer period means the period of the second calendar month immediately before the calendar month in which the purported second term tenancy commences. For example, if a second term tenancy is to commence on any date of January 2024, the relevant offer period is the whole month of November 2023.

If the tenant accepts the second term offer, the tenant must sign the Form AR1 (to be available from October 2023) containing the offer as served by the landlord, and serve it on the landlord before the expiry of the first term tenancy. If the tenant fails to notify the landlord of the tenant’s acceptance of the second term offer before the expiry of the first term tenancy, the tenant is taken to have rejected the second term offer.

If the landlord of a first term tenancy for a subdivided unit fails to serve a second term offer on the tenant within the offer period of the second term tenancy of the regulated cycle for the subdivided unit, the landlord is taken to have made a second term offer to the tenant on the expiry of the offer period, and the tenant is taken to have accepted the second term offer; and to be granted the second term tenancy on the expiry of the first term tenancy.

In that case, the renewed rent for the second term tenancy is to be the amount of rent last payable by the tenant for the first term tenancy, or if the control percentage ascertained for the rent for the second term tenancy is a negative figure, the renewed rent for the second term tenancy is to be reduced by that percentage.

If it is now the offer period and the tenant has not yet received the landlord’s second term offer, the tenant may wish to check with the landlord if he/she has already sent out Form AR1 (to be available from October 2023) which has gone astray, etc.

No, it is not necessary to submit Form AR1 (to be available from October 2023) to RVD. The purpose of Form AR1 is for making and accepting an offer of the second term tenancy of a regulated cycle of tenancies for a subdivided unit between a landlord and a tenant in accordance with Part IVA of the Ordinance.

Under Part IVA of the Ordinance, the landlord must maintain and keep in repair the drains, pipes and electrical wiring serving the premises exclusively; and windows of the premises. In addition, the landlord must keep in proper working order the fixtures and fittings provided by the landlord in the premises. On receiving a notice from the tenant for repair of an item mentioned above, the landlord must carry out the repair as soon as practicable. If the landlord fails to fulfil any of his obligations, the tenant, may, by giving the landlord not less than 30 days’ prior notice in writing, terminate the tenancy. Alternatively, the tenant may first carry out the repairs where practicable, and claim the landlord for the repair costs. If needed, the tenant may take legal actions (e.g. the small claims tribunal deals with monetary claims not exceeding HK$75,000).

A “regulated tenancy” will come to an end upon expiry of a regulated cycle of 4 years. The landlord and tenant may, with mutual agreement, enter into a new tenancy with a new regulated cycle of 4 years at a rent agreed by both parties.

The landlord of a “regulated tenancy” must return the rental deposit to the tenant, free of interest, no later than—

1. if—
   1. the term is a first term followed by a second term—the expiry of the term; or
   2. the term is a second term, or a first term not followed by a second term—the expiry of 7 days after the tenant’s delivery of vacant possession of the subdivided unit to the landlord on—
      1. the expiry of the term; or
      2. an early termination of the tenancy; or
2. the expiry of 7 days after the settlement of any outstanding money payable by the tenant to the landlord under the tenancy,

whichever is the later.

The landlord may deduct from the rental deposit the amount of any arrears of rent, or costs, expenses, losses or damages sustained by the landlord as a result of any breach of the tenancy by the tenant.

Pursuant to section 120AAZT(2) of the Ordinance, the landlord of a “regulated tenancy” must, within 60 days after the term of the tenancy commences or is taken to commence under Part IVA of the Ordinance, submit a duly completed Form AR2 to the Commissioner of Rating and Valuation. Therefore, a landlord cannot submit Form AR2 to RVD before the term of the “regulated tenancy” commences.

A regulated cycle of “regulated tenancies” is to comprise 2 consecutive “regulated tenancies” (i.e. first term tenancy and second term tenancy) for the subdivided unit. Each “regulated tenancy” is for a term of 2 years. A tenant of a first term tenancy is entitled to be granted a second term tenancy, thus enjoying a total of 4 years (first term of 2 years plus second term of 2 years) of security of tenure. Unless under the provisions specified by Part IVA of the Ordinance, the landlord cannot terminate the tenancy before the expiry of the term. Even if the tenancy, has any conditions for forfeiture other than the specified provisions, they should be deemed invalid and shall be void.

According to Part IVA of the Ordinance, if the tenant is in breach of any of the provisions under Part 4 of Schedule 7 to the Ordinance, for instance failing to pay the rent to the landlord within 15 days after the due date, using the premises for immoral or illegal purpose, etc., the landlord may enforce the right of re-entry or forfeiture.

The landlord may also terminate the tenancy in accordance with the provisions under Part IVA of the Ordinance below:

1. Section 120AAZ(7) of the Ordinance
   If the landlord has served the tenancy agreement as demanded by the tenant, but the tenant fails to sign and return the tenancy agreement to the landlord and pay back any rent withheld to the landlord within 15 days after the tenancy agreement has been served on the tenant, the landlord may, by giving the tenant not less than 15 days’ prior notice in writing, terminate the tenancy.
2. Section 4 of Part 2 of Schedule 7 to the Ordinance
   If the landlord has eventually returned the counterpart of the stamped tenancy agreement to the tenant, but the tenant fails to pay back any rent withheld to the landlord within 15 days after the tenant’s receipt of the counterpart, the landlord may, by giving the tenant not less than 15 days’ prior notice in writing, terminate the tenancy.

If the subject tenancy of the subdivided unit is a “regulated tenancy” under Part IVA of the Ordinance, it is regulated under the relevant legislation. Where the landlord of a “regulated tenancy” requests the tenant to pay for the reimbursement of charges for any of the specified utilities and services (means water, electricity, gas and communication services; communication services include a telephone (other than mobile phone), the Internet, a cable TV, a satellite TV) as a separate payment from rent, the landlord must produce to the tenant copies of the bills covering the charges in which the landlord is the payer named, and provide an account in writing showing how the amounts under the bills are apportioned for the different parts (of which the relevant subdivided unit is a part) forming the premises to which the bills relate and the aggregate of the apportioned amounts does not exceed the billed amounts.

According to Part IVA of the Ordinance, the landlord commits an offence if the landlord requires the tenant of a “regulated tenancy” to pay for, or the landlord otherwise receives from the tenant the reimbursement of the charges for any of the specified utilities and services at a sum exceeding the apportioned amount for the subdivided unit as shown in the abovementioned account or the aggregate of the apportioned amounts exceeds the billed amounts. The landlord is liable on a first conviction to a fine at level 3 (currently HK$10,000), and on a second or subsequent conviction to a fine at level 4 (currently HK$25,000).

Provided that there is no conflict with the relevant legislation (see Q27 above), the landlord and tenant of a “regulated tenancy” may discuss and agree on an acceptable method of apportionment before entering into a tenancy.

If a landlord is suspected of having committed an offence under the provisions of Part IVA of the Ordinance, for instance charging any non-permitted money or reimbursement of charges for the specified utilities and services (including water and electricity), the complainant may report to the Rating and Valuation Department (“RVD”) via hotline, email or in person. After knowing the situation, RVD will investigate and take follow-up action in accordance with the Ordinance; conduct site inspection if necessary, and, depending on the circumstances of individual cases, consider whether legal action is warranted.

For viewing or obtaining a copy of the “building plan” approved by the Building Authority under the Buildings Ordinance (Cap. 123), you may –

1. access the Building Records Access and Viewing On-line System of the Buildings Department at www.bd.gov.hk/en/resources/online-tools/BRAVO-online-building-records/index.html; or
2. visit in person the Building Information Centre of the Buildings Department at 2/F, Buildings Department Headquarters, North Tower, West Kowloon Government Offices, 11 Hoi Ting Road, Yau Ma Tei, Kowloon (Tel.: 2626 1207).

As at end December 2021, the prescribed fee for inspection of plans, documents and photos is HK$36 per file type; and that for copying certified plans is HK$42 per sheet; and that for certified documents and photos is HK$8 per sheet.

For the “building plan” prepared by the Hong Kong Housing Authority in relation to a building to which the Buildings Ordinance does not apply under section 18(2) of the Housing Ordinance (Cap. 283), you may –

1. access the Housing Electronic Building Records Online System of the Independent Checking Unit at https://eservices.housingauthority.gov.hk/hebros/; or
2. book a visit to the Hong Kong Housing Authority's service counter at 8/F, Lung Cheung Office Block, 138 Lung Cheung Road, Wong Tai Sin, Kowloon by calling the hotline of the Independent Checking Unit on 3162 0621.

As at end December 2021, the prescribed fees for inspection of plan and documents are HK$36 to HK$37 per file type, and those for copying plans and documents are HK$1.1 to HK$45 per sheet, depending on the types of records.

For the deed of mutual covenant, you may request copying services at prescribed fees by –

1. using the Integrated Registration Information System Online Services of the Land Registry at www.landreg.gov.hk/en/services/services_b_2.htm; or
2. visiting the Land Registry’s offices at the following locations –
1. The Land Registry’s Customer Centre – 19/F, Queensway Government Offices, 66 Queensway, Hong Kong (Tel.: 3741 2423);
2. Tai Po Search Office – Tai Po Complex, 4/F, 8 Heung Sze Wui Street, Tai Po (Tel. 2653 5859);
3. Tsuen Wan Search Office – Tsuen Wan Multi-storey Carpark Building, 11/F, 174-208 Castle Peak Road, Tsuen Wan (Tel. 2416 3505); or
4. Yuen Long Search Office – Yuen Long Government Offices and Tai Kiu Market, 7/F, 2 Kiu Lok Square, Yuen Long (Tel. 2475 0341).

As at end December 2021, the prescribed fee for ordering a copy of the deed of mutual covenant is HK$100.

If a dispute arises as to whether a tenancy of any premises is a domestic tenancy; and the primary user of the premises is relevant to the dispute, the landlord or tenant of the premises may apply to the Commissioner for the issue of a primary user certificate for the premises in Form TR4 at no fee. A landlord or tenant of any premises may also apply to the Commissioner for the issue of a primary user certificate in Form TR4D at a fee even though no dispute arises as to whether the tenancy is a domestic tenancy. For application details, please refer to the notes of the relevant forms available at the Rating and Valuation Department’s webpage www.rvd.gov.hk/en/public_forms (Forms > Tenancy Matters).

If a statutory order is served requiring demolition of a subdivided unit which is under a “regulated tenancy”, the relevant person is obliged to comply with such order. Part IVA of the Ordinance is not meant to “legalise” subdivided units, and the tenancy control regime on subdivided units would not prejudice law enforcement actions taken by relevant authorities under existing legislations. Part IVA of the Ordinance does not prohibit a tenant of a “regulated tenancy” from surrendering the tenancy to the landlord before the expiry of the term if both parties can reach a consensus. Therefore, the landlord must discuss with the tenant and come up with a mutual agreement to terminate the tenancy concerned where possible.

If a tenant of a “regulated tenancy” dies during the term of the tenancy, the subsisting benefits and protection under the “regulated tenancy” to which the tenant is entitled under Part IVA of the Ordinance during the tenant’s life time are, after the tenant’s death, available to a family member of the tenant who is residing with the tenant in the subdivided unit at the time of the tenant’s death. Under Part IVA of the Ordinance, “family member”, in relation to a person, means –

1. the person’s spouse;
2. the person’s parent;
3. the person’s adult child;
4. the person’s grandparent; or
5. the person’s adult grandchild.

A child includes an illegitimate child, a stepchild and a child adopted in a way recognized by law, and parent, grandchild and grandparent are to be construed accordingly.

If the relevant tenancy is a “regulated tenancy” under Part IVA of the Ordinance (see Q6 above), the landlord must submit Form AR2. If the relevant tenancy is a domestic tenancy to which Part IV of the Ordinance applies (see Q2 above), the landlord must submit Form CR109. A landlord should pay attention that he/she has to submit Form AR2 or Form CR109 to RVD by the statutory time limit concerned (see Q16 and Q2 above).

The rent and the security of tenure of non-domestic tenancies are not subject to any statutory control under LTCO.

LTCO contains no provision to regulate the format of tenancy agreement. A landlord and a tenant may freely negotiate and agree on appropriate format to suit the two parties’ needs and circumstances. In the event of tenancy disputes over an agreement which cannot be settled between the landlord and the tenant, either party may resort to legal proceedings to deal with the matter.

For regulated tenancies under Part IVA of LTCO, a Template for Tenancy Agreement for a Regulated Tenancy to which Part IVA of the Ordinance applies (“template”), prepared by the Transport and Housing Bureau for general reference purpose, is available at the Rating and Valuation Department (“RVD”)’s webpage (www.rvd.gov.hk/en/our_services/tenancy_matters.html). The landlord and tenant of a regulated tenancy may use and adapt the template with such modifications as appropriate (mandatory terms excepted) to suit their own circumstances.

The Estate Agents Authority (“EAA”) and the Consumer Council have compiled a “Notes on Signing a Tenancy Agreement” to assist landlords and tenants in understanding the importance of a tenancy agreement, the terms that should be included in it, and their obligations and rights. Please visit the website of EAA (www.eaa.org.hk) for details.

Except that section 5 in Schedule 7 to LTCO stipulates a few mandatory terms on maintenance and repair as part of Landlord’s obligations under a regulated tenancy to which Part IVA of LTCO applies, LTCO contains no provision to regulate repair liabilities. A landlord and a tenant may freely negotiate and agree on appropriate terms (the mandatory terms that are applicable to a regulated tenancy excepted). In the event of tenancy disputes on maintenance and repair matters which cannot be settled between the landlord and the tenant, either party may resort to legal proceedings to deal with the matters.

If a landlord refuses to accept the rent, the tenant may send the rent by cheque through the post to the landlord. If the letter is unclaimed, the tenant should keep it as a proof for future legal proceedings.

When the tenant is in arrears of rent, the landlord can take one of the following actions :

1. apply for a special procedure known as “distress”, whereby the District Court makes an order directing the goods of the tenant to be seized by the bailiff. If the tenant still fails to pay the rent, the goods will be sold and the proceeds applied towards the outstanding rent. The application form and pro forma affidavit can be obtained from the District Court Registry. The landlord can complete the preliminary procedure by returning the completed forms to the District Court Registry. The District Court will inform the landlord when execution has been levied. However, if the landlord is claiming more than 12 months’ rent, he cannot use the distress procedure. He has to use the normal procedure for suing for breach of contract instead;
2. sue the tenant in the Small Claims Tribunal for rent arrears of not more than HK$75,000. If the amount exceeds HK$75,000, the landlord may sue the tenant in the District Court; or
3. apply to the Lands Tribunal for a possession order

A domestic tenant who persistently pays his rent late may be regarded as causing unnecessary inconvenience to the landlord. The landlord may apply to the Lands Tribunal for a possession order if the tenant continues with such acts despite written warnings.