FAQ - Frequently Asked Question
Q. Who is responsible for stamping the lease agreement?
A. Stamping is actually a civic responsibility, as according to the Stamp Duty Ordinance, all leases must be stamped within 30 days of the date of signing. If the tenancy agreement has expired and is not stamped, you will also need to pay a penalty for applying for a replacement.
Q. Can the deposit be used to offset the rent?
A. No. Legally, the deposit is intended to protect the owner, ensuring that the owner can take back the unit in its entirety when the lease term expires. In case any problems are found, the owner can use the deposit to pay for the repairs. Generally, if the tenant pays the rent on time, maintains the property in good condition, and abides by the relevant laws. After the tenant moves out of the unit, the landlord should pay the deposit back to the tenant within the time limit after inspection. In addition, if the tenant pays the rent with a deposit, it is actually a breach of the tenancy agreement, and the landlord has the right to go to the Lands Tribunal to apply for repossession of the property through legal channels.
Q. Do I need to pay compensation if I leave the lease early during the Fix Term Tenancy period?
A. In usual circumstances, both the landlord and the tenant cannot terminate the tenancy before its expiration unless either of them has breached the vital terms of the agreement which entitles the other party to forfeit or terminate the tenancy.
Early termination may be possible with the existence of a valid break clause which may be exercisable by either party by giving prior notice at a certain time during the term of the tenancy.
Q. What are the benefits of tenancy for fixed term of one year with option to renew for another year?
A. It is more flexible. For example, when the property market changes and the rent rises and falls, if the owner or tenant is not satisfied, they can exercise the right to withdraw the lease and terminate the lease in advance. And it is not a unilateral protection for the landlord or tenant. For example, if a tenant or landlord is in trouble, one of them can ask for a withdrawal after the death contract period. Early termination of the tenancy only requires a notice period, and does not need to pay the entire death contract rent.
Q. Any penalty for Late Stamping?
A. Where an instrument chargeable with stamp duty is not stamped before or within the time for stamping, such instrument may be stamped by the Collector, with a penalty, upon payment of the stamp duty.
Q. Do I need to sign a new contract to renew the lease?
A. Upon the expiry of a tenancy, the original Tenancy Agreement becomes obsolete. The terms and conditions specified in that agreement do not bind the parties any more. If the “tenant” continues to stay at the property and the “landlord” makes no objection, the relationship between them will evolve into a tenancy at sufferance: that is to say, the “landlord” suffers the presence of the “tenant” at the property.
Q. How long does it take for the recovery of possession service?
A. The correct and legal process of repossession is mainly divided into three steps. The time will be determined by each case, but each process requires a certain amount of time. To sum up the entire closing process, it takes about three months at the fastest.
Q. When the rent change, if the landlord or tenant is not satisfied, what can they do to stop the lease?
A. If the lease has a termination clause, such as giving 1 month's notice to terminate the lease, the landlord or tenant can terminate the lease first and then negotiate a new rent. If the negotiation between the two parties is unsuccessful, the landlord or tenant needs to surrender/take back the property according to the release clause.
If there is no termination clause in the lease agreement, the landlord and the tenant must agree to terminate the lease agreement before negotiating and entering into a new lease agreement. If the negotiation between the two parties is unsuccessful, the landlord and tenant must continue to execute the original lease agreement.
Ｑ. During the application for the repossession, the tenant had moved out. Can the landlord enter the property, change the lock and suspend the legal process?
A. The landlord must never enter the unit or change the door lock without authorization! If the landlord enters the property without court approval, the tenant may claim that the landlord has unlawfully disposed of or misappropriated valuables left on the property after a few months.The landlord may face criminal prosecution. Under the Landlord and Tenant (Consolidation) Ordinance, any person who unlawfully deprives a tenant of the occupation of the premises commits an offence and is liable to fine and imprisonment.
Ｑ. What legal risks are involved when landlords cut off utilities to force tenants to pay rent?
Ａ. If landlords use methods such as cutting off water or electricity, or changing locks to force tenants to pay rent, they may potentially be charged with the offense of "causing tenants to abandon occupation of premises." According to the "Landlord and Tenant (Consolidation) Ordinance," it is illegal for anyone to unlawfully deprive tenants or sub-tenants of their occupation of premises, with a maximum penalty of HKD 1 million fine and 3 years of imprisonment.
Ｑ. Is it necessary to fill out CR109 after renting out a property?
Ａ. According to the legislation, without the endorsed CR109 form from the Rating and Valuation Department, neither the landlord nor the tenant has the right to take legal action to recover the rent.
Ｑ. What is the definition of "natural wear and tear"?
Ａ. It refers to the non-human-induced damage to the internal structure, furniture, and appliances of a unit, such as normal aging, rust, weathering, and dampness. If there is damage to the furniture or appliances in the rented unit, and the tenant insists that the damage falls under natural wear and tear, the landlord can hire a professional technician to inspect the cause of the damage.
Ｑ. When the lease term is one month, is the average number of rental days calculated as 30 days or 31 days?
Ａ. There is no fixed criterion for calculating the average number of rental days. You can consider the following methods:
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Divide all months by 30 days.
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Divide based on the actual number of days in the relevant lease period (e.g., 28/4 - 27/5 = 30 days, 28/5 - 27/6 = 31 days).
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Divide based on the proportion of the entire lease period (e.g., lease period = 365 days, 28/4 - 27/5 = total rental amount / 365 x 30 days).
Q.
What is the validity period of a property valuation report?
A.
Property valuation reports generally do not have a specific expiration date. Each property valuation report will have a designated valuation date, and the valuation within the report is based on the market conditions on that date.
Q.
What is the validity period of a property valuation report?
A.
Property valuation reports generally do not have a specific expiration date. Each property valuation report will have a designated valuation date, and the valuation within the report is based on the market conditions on that date.
