ENG-1993 — Page 236

HOUSING

1963. 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, or 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 less than 75 per cent of the prevailing market rent, the permitted increase will be the amount necessary to bring the new rent up to that percentage of the prevailing market rent. The minimum percentage will be increased in stages to 80 per cent, 85 per cent and 90 per cent in the month of July in 1994, 1995 and 1996, respectively, to allow rent controls to be phased out by the end of 1996. Both the landlord and tenant may apply to the Commissioner for a review of his certificate and may also 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 control rents. Under the legislation, 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.

Parts II and IV of the ordinance provide for the payment of statutory compensation to tenants dispossessed by the rebuilding of premises. Since July 1993, the basis of compensation has been revised to a multiple of 1.7 times the current rateable value of the concerned property.

199