HOUSING
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(standard rent). New or substantially reconstructed buildings are excluded from Part I controls.
Increases in rents have been permitted annually in recent years, the latest being in July 1986 when the legislation was amended to provide for permitted rents to be 30 times (previously 27 times) the standard rent (i.e. the rent payable in respect of the unfurnished premises on or most recently before December 25, 1941). However, in no case is the permitted rent to exceed the prevailing market rent. The Commissioner of Rating and Valuation is empowered to certify the standard rent and the prevailing market rent.
There is provision in the legislation for the exclusion from control of premises for the purpose of redevelopment, and generally possession is subject to the payment of compensa- tion to the protected tenants. Jurisdiction under Part I is exercised by the Lands Tribunal while technical functions are performed by the Commissioner of Rating and Valuation.
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Post-War Premises
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Comprehensive rent control legislation affecting post-war domestic premises has been in force in one form or another since 1963 – apart from the period between 1966 and 1970 - and is now embodied as Part II of the Landlord and Tenant (Consolidation) Ordinance.
Part II, which provides security of tenure and controls rent increases, now covers the majority of tenancies and sub-tenancies in post-war domestic premises completed or substantially rebuilt after August 16, 1945. It does not, however, apply to tenancies in buildings first certified for occupation after June 18, 1981, nor to new lettings created on or after June 10, 1983, nor to tenancies of premises having a rateable value of or above $30,000 as at June 10, 1983.
Under Part II, landlords and tenants are free to agree on an increase in rent, but such agreements must be endorsed by the Commissioner of Rating and Valuation. Increases, except by agreement, are permitted only once every two years. Where an increase is not agreed, the landlord may apply to the commissioner for his certificate of what increase may be made to the current rent. From December 19, 1986 the permitted increase is arrived at by taking the lesser of (i) the difference between the prevailing market rent and the current rent, or (ii) 30 per cent of the current rent. However, if the increase so determined, when added to the current rent, results in a rent being less than 60 per cent of the prevailing market rent, the permitted increase will be an amount necessary to bring the current rent up to 60 per cent of the prevailing market rent. Both landlord and tenant are at liberty to apply to the commissioner for a review of his certificate and further to appeal to the Lands Tribunal against the commissioner's review.
For domestic tenancies outside these controls, Part IV of the Landlord and Tenant (Consolidation) Ordinance provides a measure of security of tenure for a sitting tenant who wishes to renew his tenancy and who is prepared to pay the prevailing market rent on renewal. However, Part IV does not impose control on rents. Under these provisions, a new tenancy must be granted unless the landlord can satisfy the Lands Tribunal that he requires the premises for his own occupation or that he intends to rebuild the premises, or on one of the other grounds specified in the legislation. The parties are free to agree on the rent and terms for the new tenancy, but failing agreement, they can apply to the Lands Tribunal for a determination.
The scheme under Part IV is intended as a permanent framework regulating the relationships of landlords and tenants for nearly all domestic tenancies not otherwise subject to the Part I or II controls. Moreover, there are provisions enabling tenancies to be transferred, under certain statutory conditions, from the ambit of Part II to Part IV.