1. Before signing the formal tenancy agreement or lease, a tenant may sometimes be asked by a landlord to sign a document called “agreement for lease” or “provisional tenancy agreement”. What are the consequences of signing this document?
By signing an agreement for lease /provisional tenancy agreement, the intending landlord agrees to give, and the intending tenant agrees to take, a lease in the future. The agreement for lease/provisional tenancy agreement is a contract. It must, therefore, satisfy the requirements of a contract. An agreement for lease/provisional tenancy agreement is legally binding upon the parties to the agreement. If such an agreement is signed and one party subsequently refuses to sign the formal lease or tenancy agreement, the other party can apply to the court for an order of specific performance. That is, to apply for a court order to compel the defaulting party to fulfil the obligations as stipulated on the agreement.
For other things that you need to know before signing a Tenancy Agreement or a Lease, please visit Properties Arrangements > Landlord and tenant > Things that you need to know before signing a Tenancy Agreement or a Lease .
2. Some tenancy documents must be registered with the Land Registry but some do not. Why?
The major purpose of registering documents at the Lands Registry is to notify the public of all documents affecting lands in Hong Kong and to set up a priority system regarding documents affecting a particular property. Once a document is registered, the public is deemed to have notice of its existence and its content. The date of registration also affects the priority of a party’s rights in a particular property.
A tenancy document, being an instrument affecting land, is of course registrable at the Lands Registry. However, the Land Registration Ordinance provides that the principles of notice and priority do not apply to “bona fide leases at rack rent for any term not exceeding three years”. A document that creates a tenancy for a term of more than three years (i.e. a Lease) should therefore be registered, otherwise it is prone to be defeated by successors in title of the landlord and will lose its priority against other registered documents that affect the same property.
In contrast, a document that creates a tenancy for a term of three years or less (i.e. a Tenancy Agreement) does not gain or lose anything by registration. However, if a Tenancy Agreement contains an option to renew the existing tenancy, it should be registered even though the term of the tenancy does not exceed three years.
If you want to know how the parties handle the document after signing a Tenancy Agreement (or a Lease), please visit Properties Arrangements > Landlord and tenant > How should the parties handle the signed Tenancy Agreement/Lease? .
3. If my tenant conducts criminal activities in my property, what problems will I face?
If the landlord knows that the tenant is using the property for criminal activities, e.g. as a gambling place or a vice establishment, and does nothing about it, the landlord could face criminal charges. The consequences will not be limited to monetary loss and damages, but may include a criminal record and imprisonment. Hence, a landlord who finds a tenant using the property for criminal activities should at once report the case to the police.
A property that is used for other non-authorised purposes may also create trouble for its owner. To know more about this, please visit Properties Arrangements > Landlord and tenant > Regulations on using or occupying a leased property > Q2 .
4. In general, is the landlord or the tenant responsible for maintaining and repairing the property?
When dealing with the issue of repair and maintenance, the landlord and the tenant must predominantly rely on the tenancy document to ascertain their respective duties. It is quite normal that the terms of the tenancy document impose many obligations on the tenant, but the tenant’s obligations for repair and maintenance are limited by the phrase “fair wear and tear excepted”. This excuses the tenant from damage arising from the passing of time and the ordinary and reasonable use of the property. A well-drafted tenancy document should also contain a clause which specifies that the landlord’s obligations for structural repairs and maintenance will arise only upon notice of the structural defects. This is reasonable because the landlords, not being in occupation of the properties, cannot be expected to remedy defects of which they are not aware.
For more about repair/maintenance obligations, please visit Properties Arrangements > Landlord and tenant > Repair/maintenance obligations .
5. If the tenant refuses to pay the rent for the final two months of the tenancy, and suggests the landlord to forfeit the deposit (which is equivalent to two months of rent) as a payment of the outstanding rent, should the landlord accept this?
A tenancy document usually specifies that the tenant must pay a deposit to secure the performance and observance of the tenant’s covenants under the tenancy document, such as to pay rent, to keep the property in good condition, to execute repair and to comply with the relevant laws. The agreement to pay rent is only one of many covenants that are made by the tenant. If, upon regaining possession of the property, the landlord finds that pipes are blocked, walls are painted in weird colours, windows are broken, the refrigerator is gone, trash is left all over the property, etc., and that the tenant cannot be located anymore, the deposit will not be able to cover the aggregate of the unpaid rent and the expenses incurred to refurbish the property. It is therefore unwise to accept the tenant’s proposal to substitute the rent with the deposit.
If you want to read more case illustrations regarding landlord and tenant, please visit Properties Arrangements > Landlord and tenant > Case illustration .
6. What are the major government departments that are responsible for governing tenancy matters in Hong Kong? To which department(s) should a party go to if a tenancy dispute/problem arises?
The Rating and Valuation Department is responsible for administering the Landlord and Tenant (Consolidation) Ordinance ( Cap.7 of the Laws of Hong Kong). It also provides services regarding tenancy matters. The Department answers public queries on tenancy matters through a telephone hotline at 21508229.
The Lands Tribunal is the major body responsible for handling tenancy disputes. Unlike the Court, a 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 the dispute is purely about a monetary claim of $50,000 or less, then the claimant can make the claims at the Small Claims Tribunal. If the amount of the claim is higher or the relevant legal issue is more complex, then the parties can also bring the case to the District Court or the Court of First Instance of the High Court.
If you want to know how to recover the outstanding rent and get back the property, please visit Properties Arrangements > Landlord and tenant > How to recover the outstanding rent and get back the property? .