The Hong Kong Landlord and Tenancy (Consolidation) Amendment Ordinance 2003 (the Ordinance) was passed on June 30 2004 and came into effect on July 9 2004. It aims to remove security-of-tenure provisions for residential tenancies and to remove the minimum notice period requirement in relation to non-residential tenancies.
Previously, residential tenants who sought to renew their tenancies were entitled to a renewal if they were willing to pay the prevailing market rent. The landlord could only refuse a renewal based on certain statutory grounds (for example, the tenant's failure to pay rent, cause of unnecessary inconvenience and annoyance, or if the premises are needed for self-occupation or redevelopment).
The tenant was required to serve a notice of renewal on the landlord no more than four months and no less than three months before the intended commencement date of the new tenancy. If the landlord did not want to renew the tenancy, they had to serve a notice on the tenant no more than four months but no less than three months before the intended date of termination. If the landlord did not do anything to seek termination, the tenancy automatically continued until the landlord initiated any action.
As a result, it was difficult for landlords to repossess their properties when tenancies expired.
With effect from July 9 2004, tenants of residential premises no longer enjoy the security-of-tenure provisions previously in force. The changes allow landlords more freedom when leasing their residential properties, without fear of being tied down to a tenancy even when it has expired.
Transitional provisions provide that, after the commencement date, landlords of all existing tenancies will be required to serve on the tenant (either on or after the tenancy's contractual end date) a notice of termination no less than 12 months before the intended termination date. During this notice period, the tenancy will continue to run on all existing terms until the date specified in the notice. The 12-month notice requirement will be overridden by any notice period agreed by the parties after the commencement of the Ordinance. Tenants will also have the option of terminating the tenancy by serving a termination notice no less than one month before the day on which it is to take effect.
Tenancies entered into after the Ordinance comes into operation will not be subject to this transitional arrangement. After a tenancy has expired, a landlord who needs to repossess their property for self-occupation can apply to the Lands Tribunal for immediate repossession, regardless of whether they have served a transitional notice or not. However, the landlord cannot let or assign the premises within two years after repossession.
Previously, tenants of non-residential premises did not enjoy security of tenure. However, the landlord was required to serve six months' notice on the tenant to terminate the lease, notwithstanding that the contractual term of the lease had expired. The new Ordinance provides that landlords of commercial premises for terms of not more than three years will no longer need to give the six months' written notice to quit.