Rent Control

Statutory controls date from 1921 and the tenants of most domestic
premises are afforded security of tenure under the Landlord and Tenant
(Consolidation) Ordinance. Rent levels are also controlled in tenancies in
pre-war domestic premises and in post-war domestic premises completed
before June 19, 1981 (but not new lettings created on or after June 10,
1983, nor tenancies of premises with a rateable value of $30,000 or more
as at June 10, 1983). Other domestic tenancies receive security of tenure,
provided the tenant is prepared to pay the prevailing market rent.

The legislation originally provided for controlled rents to be increased
progressively up to market levels so that rent control could be removed by
the end of 1996. However, the Legislative Council passed a resolution in
December 1996 to extend rent control for two years, lower the permitted
rent levels from 90 per cent of the prevailing market rent to 80 per cent,
and lower the maximum rent increase from 30 per cent to 20 per cent.
Rent control is due to be phased out after December 31, 1998. The
provision for security of tenure will, however, continue to apply after the
expiry of rent control. Unless a tenant voluntarily vacates the premises, a
landlord must apply on specified grounds and obtain an order from the
Lands Tribunal before he can recover possession. Penalties are prescribed
for harassment of a protected tenant with intent to induce him to leave.
Provisions exist to facilitate an agreed surrender by the tenant of his
protected tenancy in exchange for a consideration.

The Rating and Valuation Department administers the Ordinance and
publishes explanatory pamphlets to help people understand their position in
relation to the legislation. It provides an advisory and mediatory service to
handle the many practical problems arising from rent controls. Its Rent
Officers also answer enquiries on landlord and tenant matters in district
offices.

As part of an overall review of the ordinance, it is intended to raise
penalties against harassment and unlawful eviction to ensure sufficient
deterrent.

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