ENG-1979 — Page 146

HOUSING AND LAND

101

Increases in rents are permitted periodically, the latest being in June, 1979, when the legislation was amended to provide for permitted rents to be four times the standard rent in the case of domestic premises and eight times for business premises. In either case, the permitted rent is not to exceed the fair market rent. There are provisions for the Com- missioner of Rating and Valuation to certify the user of premises and their fair market rent. A Tenancy Tribunal is appointed to fix or determine the amount of rent payable in respect of pre-war premises and to deal with other tenancy matters.

Where a landlord incurs expenditure of $5,000 or more on additions or improvements he may, subject to the approval of a Tenancy Tribunal, increase the rent by 20 per cent a year of the amount expended. Rent increases are also permitted where the landlord bears the rates and the rates liability is increased.

There is provision in the legislation for the exclusion from control of premises and so, year by year, the stock of pre-war buildings is gradually diminishing. The usual purpose of exclusion is redevelopment and generally possession is subject to the payment of com- pensation to the protected tenants. The Rating and Valuation Department provides a mediating and advisory service to deal with many of the practical problems arising from these controls and, in particular, where exclusion proceedings are commenced or where buildings are declared dangerous by the Building Authority, to ensure that tenants and sub-tenants understand their rights. As a further step to improve its service to members of the public, the department launched a Rent Officer Scheme in 1978. Under the scheme, rent officers attend certain selected City District Offices on set days each week to deal with referred cases and to answer inquiries on landlord and tenant matters relating to both pre-war and post-war premises.

Rent Control of Post-war Premises

Comprehensive legislation affecting post-war domestic premises in the private sector has been continuously in force in one form or another since 1962, apart from the period between 1966 and 1970, and it has been embodied as Part II of the Landlord and Tenant (Consolida- tion) Ordinance. This legislation provided security of tenure and controlled increases in rents for the majority of tenants and sub-tenants in post-war domestic premises in the private sector. Increases in rent for protected tenants were limited to a maximum of 21 per cent every two years. This provision did not, however, apply to tenancies in buildings certified for occupation after December 14, 1973, nor to tenancies entered into after December 31, 1975, for a term of three years or more. Tenancies held in the names of public bodies, corporations, foreign or Commonwealth governments, partnerships or firms were also excluded.

In 1979, rents in the uncontrolled sector of the domestic property market moved upwards. The movement was more rapid in respect of high-class domestic accommodation owing to a below average supply in 1978 and an increased demand. There were reports that tenants were experiencing difficulties in negotiating renewals of tenancies and in finding alternative accommodation at reasonable rents. A working group comprising representatives from various government departments was formed to identify sites for constructing high-class housing and to speed up the programme of making additional sites available for develop- ment. Other measures, including suggestions to extend rent controls to those premises excluded from legislation and an extension of the government's Home Ownership Scheme, were also examined.

On December 18, 1979, the government announced that legislation was to be introduced into the Legislative Council early in 1980 which would bring all domestic rented accom-