Can A Landlord Back Out of A Signed Lease in Hong Kong?

Are you a landlord wondering how to lawfully reclaim your rental property, or a tenant curious about your rights during lease termination? Understanding the legal intricacies of lease termination is crucial for both parties to navigate this complex process smoothly. This guide delves into the specifics of Hong Kong's Landlord and Tenant (Consolidation) Ordinance, shedding light on the lawful termination of residential leases and the indispensable CR109 form.

Introduction the Landlord and Tenant (Consolidation) Ordinance

The Landlord and Tenant (Consolidation) Ordinance, particularly Part IV, is the cornerstone regulation governing residential leases in Hong Kong. This ordinance outlines the legal relationship between landlords and tenants, including the establishment, maintenance, and termination of leases. Adherence to this ordinance is crucial for both parties to avoid legal disputes when handling lease terminations.

Legal Methods of Terminating Residential Leases

Fixed-Term Leases

Fixed-term leases automatically terminate upon the expiration of the lease period. If either the landlord or the tenant wishes to terminate the lease early, mutual agreement is required, and the terms of early termination must be explicitly stated in the lease agreement.

Periodic Tenancies

• Yearly Tenancies: These can be terminated with at least six months' notice, effective at the end of the one-year term.
• Monthly and Weekly Tenancies: These require notice for one full period, ending at the close of the respective rental period.

The CR109 Form

The CR109 form is a notification that landlords must submit when entering into a new lease or renewing an existing lease agreement. This form is essential for validating the lease agreement's legality.

• Submission: Landlords must submit the CR109 form within 30 days of signing the new lease agreement and pay a fee of HKD 310.
• Legal Action: Without approval from the Commissioner, landlords cannot take legal action to recover rent.

How to Fill Out the CR109 Form

1. Download: Obtain the CR109 form from the Hong Kong Rating and Valuation Department's website.
2. Property Details: Provide the complete address of the property.
3. Lease Details: Include the lease term and type.
4. Rent Information: Detail the unit rent, management fees, furnishings, rent-free periods, rates and government rent.
5. Tenant Information: Fill in the tenant's full name and contact address.
6. Landlord Declaration: Provide the landlord's full name, contact address, phone number, and signature.
7. Submission: Mail or deliver the completed form to the Rating and Valuation Department, located at 15/F, Cheung Sha Wan Government Offices, 303 Cheung Sha Wan Road, Kowloon.

Landlord’s Legal Rights and Obligations

Termination Rights

Landlords have the right to terminate leases under specific circumstances, such as tenant default or the need for major repairs. However, landlords must follow the Landlord and Tenant (Consolidation) Ordinance.

Landlords must provide written notice within seven days after the rent due date, giving tenants at least 30 days to pay the outstanding rent, failing which the lease will be terminated. Here you can download the surrender agreement template.

Conditions for Forfeiture

Landlords can forfeit residential leases under the following conditions:

• Non-Payment of Rent: Tenants fail to pay rent within 15 days of the due date.
• Immoral or Illegal Use: Tenants use the premises for immoral or illegal activities.
• Causing Unnecessary Disturbance: Tenants cause unnecessary disturbance, inconvenience, or harassment, including persistent late payment of rent.
• Unauthorized Structural Changes: Tenants make structural changes without the landlord's consent.

Verification of Residential Leases

Both landlords and tenants can apply for verification of residential leases from the Rating and Valuation Department or the Lands Tribunal, providing relevant documents and paying the required fees.

Applying for a Certificate

Either party can apply for a certificate (TR4D) to verify the primary use of the property. This application costs HKD 3,850.

Lands Tribunal Determination

Either party can request the Lands Tribunal to determine whether the property’s lease is residential. The tribunal will review the ordinance and make a final decision.

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FAQ about Terminating Residential Leases