TENANCY
А
Our attention was recently called to a
injustice being perpetrated groan
on of tenants occupying new semi- group European type flats in the North Point district of Hong Kong. These tenants had only been in residence a matter of five or six months, after obtaining possession by the payment of from $4,000 to $5,000 key
and by agreeing to money
rentals averaging $300 a month, when they re- ceived notification from their landlords Asking for increases in rent of 15% to 20%.
pay
These notifications took the form of a demand to vacate the fats on one month's notice, with permission to continue the tenancy ΟΠ their agreement to pay the increased rent. In other words, in spite of the fact that the tenants had paid a very substantial amount of key money, the landlords were prepared to throw them out of their flats after six months occupation unless they obtained substan- tial increases in rent over and above the amount that had mutually been agreed проп.
It has been considered against the best interest of the Colony to introduce any legislation which would tend to restrict the right of landlords in. or to impose any limiting conditions 011, tenancies of new buildings. the idea being that. if builders are allowed com- plete freedom from such restrictions, it would counteract the element of un- certainty in Colony enterprises and the building in spite of encourage speculative element introduced by the political situation.
As a result of this freedom. the speculative builder, encouraged by the unprecedented influx of refugees into the Colony, has built during the past years hundreds
of and thousands dwellings in practically every part of the Colony. Since the demand for accommodation far exceeded the sup- ply, and has more than kept pace with the rate of new construction, the re- turns derived from such building operations have been exceedingly high.
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As a result of this influx and the demand thus created, builders of re- sidential and other properties were able to impose financial conditions which were ridiculous on the face of it. They were able to demand and to obtain key money, or construction money, whatever else it was called, which re- imbursed them for the cost of con- struction within, in some cases, from two to five years, and in addition were able to charge annual rents which were often equivalent to fifteen or twenty per cent of the cost of the building. Also, because of this pres sure of demand, they were able to obtain this key money by verbal agree- ments, without the necessity of giving receipts or acknowledgments of any kind. As a result. the tenant was placed entirely at the mercy of the
NEW
PROTECTION ON
BUILDINGS
landlord. The fact that there was મ complete absence of legislation cover- ing the tenancy of newly constructed buildings abetted and encouraged this state of affairs.
We can understand the motives be- hind the official attitude to steer clear of any attempt to regulate key money or construction money on new build- ings and this official attitude has been justified by the tremendous growth of the Colony within a very short time.
What we cannot understand is the official attitude which refuses to in- terfere with the machinations of the landlords after the tenancy has been accepted, and to give protection to the tenants who are the victims of the pre- sent system. It is fair enough to let the speculative builder make as much money as he legitimately can in order to encourage his building operation. but any attempt on his part to exploit the situation by means of dishonour- able demands after agreements have been reached. even though verbal ones, must be discouraged. Surely to good- uess the tenant who has paid through the nose to obtain accommodation should be afforded some
protection
against unscrupulous elements who. not satisfied with the tremendous profit made as a result of their activities, seek to take advantage of the helplessness of their victims and the lack of pro- tective legislation to capitalize still further the ignorance, the gullibility and the defencelessness of their ten- ants by enforcing the demands for increased rentals under the threat of eviction.
That the authorities are fully aware of the state of affairs described above is proven by the fact that in a Supple- ment of the Government Gazette of 22nd December. 1950, a Bill intituled "An
Ordinance to remedy certain abuses resulting from the exclusion of new buildings and certain reconstruct- ed buildings from the operation of the Landlord and Tenant Ordinance 1947” was published for general information.
The objects and reasons for this Bill, as published, are:
1.
Attention has been directed to cases where tenants of new buildings have paid a premium for a tenancy on the understanding that they would not be evicted but
without any legally binding agreement securing them against eviction for a definite period. This situation has in a number of cases been exploited. by both the original
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landlord and those becoming landlords by subsequent purchase, to increase the rent originally agreed under 2 threat of eriction which has been carried out where the tenant has been unwilling to pay the increased rent. Hardship has resulted.
2. It is not considered that it would be justifiable or feasible that legisla- tion should in such circumstances afford protection with retrospective effect. But it is considered that a measure of protection is warranted to apply in case; where a tenant has paid "construction money" or other pre- mium for a tenancy of a new building and such tenancy is now subsisting. the protection being designed to secure that effect be given to original under- standing that a tenant would not for a substantial period he given notice to quit or have his rent raised by the landlord or those claiming under him.
3. The object of this Bill is to afford legislative protection, in the circumstances and to the extent in- dicated, in respect of new buildings but subject to the exceptions specified in clause 5 of the Bill, and by provision (clause 3) whereby an agreement for quiet enjoyment is implied in respect of new buildings (unless tenancy of premises has been expressed to be for a definite period of not less than one year) until the Governor in Council by order (under clause 4) declares that such implied agreement shall cease to apply.
4. It is stressed that the Bill does not seek to control the rent of new or extensively reconstructed buildings whether those already let or those not yet let. But in the former case the Bill will as regards premises to which clause 3 applies have the effect that the existing rent may not be augment- ed without a tenant's consent.
Such a tenant would however only be pro- tected so long as he performs the terms contained in or implied by his tenancy
agreement.
WHAT WE WANT TO KNOW IS WHAT HAS HAPPENED TO THIS BILL? WHY IS IT THAT, IN SPITE OF ITS URGENT NECES- SITY, NO FURTHER STEPS HAVE REEN ΤΑΚΕΝ ΤΟ PUT IT THROUGH ITS SUCCESSIVE READINGS AND PLACE ON OUR STATUTE BOOKS THE PROTEC- TION REQUIRED BY SUCH A LARGE PROPORTION OF OUR RESIDENTS?
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