ENG-1992 — Page 218

HOUSING

Part I previously applied to both domestic and business premises, but as 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 (the rent payable in respect of the unfurnished premises on or most recently before December 25, 1941). The rent chargeable under the ordinance is the permitted rent which in 1992, is 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.

The legislation provides for the exclusion from control of premises for the purpose of redevelopment, and generally possession is subject to the payment of compensation 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

Comprehensive legislation to control rent increases in post-war domestic premises has been in force in one form or another since 1963 – apart from the period between 1966 and 1970 – and this is now contained in Part II of the Landlord and Tenant (Consolidation) Ordinance.

Part II controls rent increases and provides security of tenure to tenancies and sub- tenancies in post-war domestic premises completed or substantially rebuilt after August 16, 1945 and before June 19, 1981. It does not however apply to new lettings created on or after June 10, 1983, nor to tenancies of premises having a rateable value of or above $30,000 as at June 10, 1983.

Under Part II, landlords and tenants are free to agree on an increase in rent, but such agreements must be endorsed by the Commissioner of Rating and Valuation. Increases, except by agreement, are permitted only once every two years. Where an increase is not agreed, the landlord may apply to the commissioner to certify the increase which may be made to the current rent. The permitted increase is arrived at by taking the lesser of (i) the difference between the prevailing market rent and the current rent, or (ii) 30 per cent of the current rent. However, if the increase so determined, when added to the current rent, results in a rent of less than 70 per cent of the prevailing market rent, the permitted increase will be the amount necessary to bring the current rent up to that percentage of the prevailing market rent. Both the landlord and tenant may apply to the commissioner for a review of his certificate and further to appeal to the Lands Tribunal against the commissioner's review.

For nearly all domestic tenancies not subject to Part I or II controls, Part IV of the ordinance provides security of tenure for a sitting tenant who is prepared to pay the prevailing market rent on renewal of his tenancy. However, Part IV does not impose control on rents. Under these provisions, a further tenancy must be granted to the existing tenant unless the landlord can satisfy the Lands Tribunal that he requires the premises for his own occupation, or that he intends to rebuild the premises, or on one of the other grounds specified in the legislation. The parties are free to agree on the rent and terms for the new tenancy but, failing agreement, they can apply to the Lands Tribunal for a determination. Provisions also exist enabling tenancies to be transferred, under certain statutory conditions, from the ambit of Part II to Part IV.

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