ENG-1991 — Page 231

HOUSING

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The clearance has been undertaken in four phases with the last phase due to be cleared in June 1992. The buildings will then be demolished and the 2.7-hectare site developed into an Urban Council Park.

Rent Control in the Private Sector

Statutory controls on rents and security of tenure in Hong Kong date back to 1921. The present legislation governing these matters is the Landlord and Tenant (Consolidation) Ordinance.

At present, statutory controls apply only to domestic premises in the private sector unless otherwise exempted. Tenants are afforded rent increase control and security of tenure. 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 negotiations by which the parties may reach an agreement whereby the tenant surrenders 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, and 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 designated days

each week to deal with referred cases and answer enquiries on landlord and tenant matters.

The legislation is under constant review to improve its workings and to achieve the objective, recommended in 1981 by a Committee of Review and endorsed by the government, that as soon as circumstances permit, rent control should be phased out. To this end the government decided in 1991 to phase out controls on rents, by steps and without adverse social consequences, by the end of 1994. However, security of tenure will still be preserved.

Pre-war Premises

Legislation controlling rents of pre-war premises and providing security of tenure was instituted by proclamation immediately after World War II and in 1947 was embodied in the Landlord and Tenant Ordinance since re-enacted as Part I of the Landlord and Tenant (Consolidation) Ordinance.

Part I previously applied to both domestic and business premises, but, as from July 1, 1984, it applies only to domestic premises. New or substantially-reconstructed buildings are excluded from Part I controls.

Rent increases under Part I are controlled by reference to the standard rents of the premises (i.e. the rent payable in respect of the unfurnished premises on or most recently before December 25, 1941). The rent lawfully chargeable under the ordinance is the permitted rent. Since November 1990, the permitted rent has been 48 times the standard rent. 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-