HOUSING
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The ordinance provides that, unless a tenant voluntarily vacates the premises, a landlord must apply on certain specified grounds and obtain an order from the Lands Tribunal before he can recover possession. Heavy penalties are prescribed for harassment of a protected tenant with intent to induce him to leave. However, provisions exist to facilitate an agreed surrender by the tenant of his protected tenancy in exchange for a consideration.
The Rating and Valuation Department publishes explanatory pamphlets to help people understand their position in relation to the legislation. It provides an advisory and mediatory service to deal with the many practical problems arising from rent controls. It also operates a scheme under which rent officers attend District Offices on certain days each week to deal with referred cases and answer enquiries on landlord and tenant matters.
The legislation is kept under review to improve its operation and to achieve the objective, recommended in 1981 by the Committee of Review, Landlord and Tenant (Consolidation) Ordinance and endorsed by the government, that as soon as circumstances permit, rent controls should be phased out. To this end, the ordinance was amended in July 1993, principally to allow controlled rents under Parts I and II to increase progressively up to market levels, so that rent controls can be removed by the end of 1996. However, security of tenure under Part IV will continue to apply.
Pre-war Premises
Legislation controlling rents and providing security of tenure for pre-war premises was introduced immediately after World War Two. In 1947, it was embodied in the Landlord and Tenant Ordinance and has since been re-enacted as Part I of the Landlord and Tenant (Consolidation) Ordinance.
Part I previously applied to both domestic and business premises, but from July 1, 1984, it has applied only to domestic premises. Substantially reconstructed buildings are, however, excluded from Part I controls.
Rent increases under Part I are controlled by reference to the standard rent of the premises (that is, the rent payable, on an unfurnished basis, on or most recently before December 25, 1941). The rent lawfully chargeable under the ordinance is the permitted rent, which cannot exceed the prevailing market rent of the premises.
In order to implement the policy of phasing out rent controls, the legislation was amended in July 1993 to allow permitted rents to be increased to 55 times the standard rent of the premises. The multiplier will be increased to 65 in July 1994, to 75 in July 1995 and to 85 in July 1996. In addition, the legislation provides that the new rent shall not be less than a specified percentage of the prevailing market rent. The minimum percentage has initially been set at 60 per cent but will be adjusted upwards to 70 per cent in July 1994, to 80 per cent in July 1995, and to 90 per cent in July 1996. The Commissioner of Rating and Valuation is empowered to certify the standard rent and the prevailing market rent.
The legislation provides for premises to be excluded from control if they are to be redeveloped, and generally, possession is subject to compensation being paid 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.
Post-war Premises
Apart from the period between 1966 and 1970, comprehensive legislation to control rent increases in post-war domestic premises has been in force in one form or another since