These Important Notes are listed for students' easy reference of the prevailing market practice and issues to be taken care of before signing a Tenancy Agreement.
Terms/clauses in the Tenancy Agreement serves as a blue-print of a Contract yet all terms/clauses therein are negotiable. Any amendment of the terms/clauses should be based on mutual agreement, and remember to have the revised part clearly written and initialed by both parties in the margin.
CAUTION: Do NOT sign a contract/document without reading and understanding it. Also do NOT rely on the landlord or property agent's oral assurances. Make full record on the Tenancy Agreement for any amendments to safeguard your benefits and to avoid any dispute that may arise at a later stage.
For furnished accommodation, request the landlord to produce a full Inventory List for your double-checking (or photo-taking for record) before making it an appendix of the Agreement.
Rental price is subject to negotiation. As an easy reference, the average rent in Hung Hom area ranges from about HK$ 2,000 per month for a small single room to HK$13,000 per month for a flat , depending on the size, provisions , decoration and quality of the unit, environment and age of the premises/estate and ease to public transportation and so on .
Normally down payment for lease is 2-month deposit plus 1-month prepayment of rental at 1-year fixed lease and 1-year renewable afterwards. It is subject to negotiation and mutual agreement.
Again the payments other than rent, such as rates, management fee and utilities are also subject to negotiation. The responsibility of the landlord or tenant over this should be spelt out explicitly in the Tenancy Agreement.
For a lease reached at the assistance/recommendation of a property agent, a commission equivalent to 50% of a monthly rental fee is normally required (unless otherwise agreed at the time of his/her recommendation).
Age restriction for signing a Tenancy Agreement: It is recommended that all tenants to sign on the contract, instead of signing by one representative. By law, only those beyond 18 years of age are qualified to sign a Tenancy Agreement. Those below 18 are regarded as minor and they could invite an adult guardian to enter into the contract on their behalf.
As for the authenticity of a landlord, if the room/flat is recommended by an Estate Agent , he/she is bound by law to search at Lands Department on the authenticity of the landlord. Under some special circumstances, an estate a gent or a 3 rd party could negotiate/commit an Agreement on behalf of the landlord if he/she could present the authorization letter of the landlord signed at the witness of a solicitor. Note that all Estate Agents should produce his/her license registered under Estate Agents Authority upon your request.
For direct negotiation between potential tenant and landlord without Estate Agent's involvement, the tenant is advised to conduct Search of Land Records at The Land Registry by paying a search fee of HK$70 to check the legality of the property and basic information of the landlord, like-wise the landlord could show the proof , viz. a copy of the Land Office document within 3 days' of validity, registering the premises in the landlord's name (if the landlord owns the premises) or a copy of the lease under which the landlord holds the land (if the landlord is himself the tenant of a head-landlord: that lease should of course be for a longer period than the lease offered to the potential tenant).
If the `landlord' or `agent' proved to be a fraud with no right to let out the premises, the potential tenant who has signed the agreement and made payments in advance would sue them for breach of contract, the risk is that the culprits might have vanished after collection of deposits, prepayments of the rent .
Landlord will have the leases stamped to indicate that Stamp Duty has been paid to protect his interest, as an unstamped lease is not admissible as evidence in court in case of dispute.
Terms in Tenancy Agreement should be in compliance with Landlord and Tenant (Consolidation) Ordinance and any clause declaring that Ordinance does not apply to the Contract is void. One piece of advice is not to let clauses amended without your agreement, e.g. the insertion of a new clause that an extortionate amount of damages will be demanded for breaking the Agreement.
Subletting
If a student signs the lease, rather than all students willing to become joint tenants, he gains the benefit of convenience that if one or more of the students decides to leave, they are free to do so without notifying the landlord , yet the liability is that the student who signs the lease is bound solely responsible for any breaches of Agreement, even if he ceases to live in the premises before the lease expires.
As it is a standard clause to forbid subletting in the Tenancy Agreement, the intention of the tenant's sharing/subletting should be clearly and honestly explained to the landlord to obtain his/her consent so as to have the clause removed and properly endorsed.
Subletting without landlord's consent will nullify the Agreement and the landlord could sue the tenant for breach of contract via Small Claim Tribunal or other legal means and bar his/her access into the premises.
Breach of contract
Any major breach of the tenants' obligations to the Agreement will entitle the landlord to forfeit the lease and start proceedings for possession. The common breaches giving rise to forfeiture are non-payment of rent, subletting and using the premises for illegitimate purposes. For example, i f the tenant has signed for a 12-month term and depart after paying a rent of 10-month only. The landlord is entitled to the outstanding rent and can sue for damages by law, though he/she might deduct the debt from the deposit (if the amount offset one another) rather than starting a court action for arrears of rent.
The refund of deposit in case of breach of Contract is also subject to different interpretation and depends on what stage has been reached and on what the deposit is meant to cover. If the lease has been signed by the tenant he is legally obliged to pay rent, which presumably would be a larger sum than the security deposit. If he is still negotiating with the landlord, no agreement has been reached and he can change his mind about taking the premises. In those circumstances he would be foolish to have paid any deposit. However, if he has, he will be entitled to its return if the deposit covers non-payment of rent, damage to furniture and fittings and other matters associated with the tenant's occupation. The deposit may be expressed to constitute a guarantee by the potential tenant that he will enter into the lease. In this case, since the tenant has broken the guarantee, he cannot recover the payment.
For change of landlords, if the landlord sells the property to another landlord, the tenants can still stay under the terms of the previous agreement as the new landlord merely replaces the old one and he/she is bound by the terms of the lease previously agreed upon.
It is up to the parties concerned to re-negotiate all the terms upon the expiry of the Tenancy Agreement. If the tenant decides to stay but the landlord refuses to renew the tenancy, the tenant can apply to the Lands Tribunal for a new tenancy. The Tribunal will grant the new tenancy unless it is satisfied that the landlord should recover possession on some statutory grounds including self-use and redevelopment. The rent for the new tenancy, if not agreed, will be prevailing market rent to be determined by the Tribunal. The procedure for applying to the Lands Tribunal is available on Rating and Valuation Department.
To avoid dispute, it is always advisable to settle the rent through bank by a cheque and retain the cheque counterfoil and bank statement showing the cheque has been drawn. For cash payment, the landlord should provide receipts right upon receiving the cash.
The liability of a tenant towards repair and maintenance of the accommodation is subject to the terms of the lease. Normally the tenant's responsibility usually increases with the length of the tenancy and it is not uncommon for him to be liable for internal (but not external) repairs. Usually the lease also stipulates that he must allow the landlord to enter and inspect the state of repair. If the agreement says nothing about repair and maintenance, the tenant has the liability of making use of the premises in a "tenant-like manner" , viz. liable for minor works such as mending fuses, stopping drains and cleaning windows.
