XN000022-1984-05-04 — Page 3

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FRIDAY, MAY 4, 1984

+ABOUT 2 000 TENANCIES WILL BE AFFECTED, OF WHICH ABOUT 73

IT IS NOT PER CENT ARE HELD IN THE NAME OF CORPORATIONS. EXPECTED THAT THEY WILL SUFFER ANY UNDUE HARDSHIP BECAUSE RENTS FOR THIS SECTOR HAVE BEEN DECLINING AND THEIR AVERAGE LEVEL OF CONTROLLED RENT IS ALREADY CLOSE TO THE PREVAILING MARKET LEVEL. FURTHERMORE, NO HARDENING OF RENTS SEEMS LIKELY FOR THIS SECTOR IN THE COMING YEAR, AND THERE ARE MANY VACANT LARGE FLATS AND A GOOD SUPPLY FORECAST FOR BOTH THIS AND NEXT YEAR, + MR LIAO SAID.

+A NEW PROVISION IN THE BILL IS THE PROPOSAL TO REMOVE FRESH LETTINGS OF FULLY FURNISHED PREMISES FROM BOTH TENANCY AND RENT CONTROLS. IT IS THOUGHT THAT THIS WOULD BE AN INCENTIVE TO THOSE LANDLORDS WHO WISH TO PROVIDE SUCH ACCOMMODATION, ON A SHORT-TERM BASIS, TO MEET THE DEMANDS OF ORGANISATIONS BRINGING IN OVERSEAS STAFF FOR SPECIFIC PROJECTS. SUCH TENANCIES WOULD BE FOR NOT MORE THAN ONE YEAR AT A TIME AND, IN ORDER TO AVOID ABUSE. THE AGREEMENTS WOULD REQUIRE ENDORSEMENT BY THE COMMISSIONER OF RATING AND VALUATION. HE MUST BE SATISFIED THAT THE TENANT UNDERSTANDS THE EFFECT OF THE EXCLUSION, THE PREMISES ARE FULLY FURNISHED AND THAT THE LANDLORD ACCEPTS RESPONSIBILITY FOR MAINTAINING AND REPAIRING THE PREMISES, FURNISHINGS AND FITTINGS,+ MR LIAO SAID.

ON THE PROPOSALS TO REVISE THE MECHANISM FOR PERMITTING RENT INCREASES, MR LIAO EXPLAINED THAT; AT PRESNET, WHEN A LANDLORD APPLIES FOR A RENT INCREASE, THE AMOUNT OF INCREASE IS THE LESSER OF EITHER THE DIFFERENCE, DIVIDED BY THE FACTOR 2, BETWEEN THE PREVAILING MARKET RENT AND THE CURRENT CONTROLLED RENT OR 30 PER CENT OF THE CURRENT RENT. HOWEVER, IF THE CONTROLLED RENT IS EXCEPTIONALLY LOW, ANOTHER PROVISION, INTRODUCED IN 1983, IS TO ALLOW THE PERMITTED INCREASE TO BE AN AMOUNT NECESSARY TO BRING THE CURRENT RENT TO AT LEAST 30 PER CENT OF THE PREVAILING MARKET RENT.

ONE OF THE PROPOSALS IS TO REMOVE THE DIVIDING FACTOR. THIS IS DESIGNED TO SIMPLIFY THE MECHANISM AND TO REMOVE THE EFFECT OF THE FACTOR FOREVER REPRESSING CONTROLLED RENTS BELOW MARKET LEVELS WHICH HINDERS THE RESTORATION OF A FREE DOMESTIC MARKET. AS THE PROCESS OF DECONTROL IS WELL ADVANCED, THE AVERAGE OF CONTROLLED RENTS BEING 64 PER CENT OF PREVAILING MARKET RENT, IT IS OPPORTUNE TO ABOLISH THE DIVIDING FACTOR SO THAT DECONTROL IS NOT IMPEDED.

+REMOVING THE DIVIDING FACTOR WILL AFFECT ABOUT 23 500 TENANCIES (17 PER CENT OF TOTAL CONTROLLED TENANCIES) WHOSE CONTROLLED RENTS ARE ALREADY RELATIVELY CLOSE TO THE PREVAILING MARKET LEVEL. IN SUCH CASES, THE INCREASE IN RENT, WHILE BRINGING RENTS UP TO THE PREVAILING MARKET LEVEL, WILL STILL BE LESS THAN 30 PER CENT OF THE CURRENT RENT,+ MR LIAO SAID.

/ANOTHER PROPOSAL