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The Landlord and Tenant (Consolidation) (Amendment) Ordinance 2004 which removes the security of tenure provisions for domestic tenancies and the statutory minimum notice requirement for terminating non-domestic tenancies takes effect today (July 9).

Prior to the commencement of the Ordinance, if a tenant sought to renew a domestic tenancy and was willing to pay the prevailing market rent, the landlord would have to agree to the tenancy renewal. Only on certain statutory grounds, such as self-occupation, could the landlord refuse to renew the tenancy.

With the removal of the security of tenure regime, a fixed term tenancy entered into after the Ordinance takes effect will end upon expiry while a periodic tenancy can be terminated by a notice to quit served by either party in accordance with the common law.

"The removal of the outdated restrictions, which are no longer justified under present day circumstances, means that landlords and tenants are free to negotiate and enter into agreement for fresh letting or renewal of tenancies," a spokesman for the Housing, Planning and Lands Bureau said.

"The lifting of the restrictions helps restore the free operation of the private rental market and strike a better balance between the interests of landlords and tenants of private domestic tenancies," he added.

To help landlords and tenants of existing tenancies adapt to the legislative changes, the Ordinance provides for a transitional arrangement.

If a landlord of a tenancy in existence before the commencement of the Ordinance wants to terminate the tenancy, he must serve on the tenant a transitional termination notice (TTN) not less than 12 months before the intended termination date. The TTN must be served after the term of the existing tenancy has expired. A tenant who wants to terminate the tenancy should serve a TTN on the landlord not less than one month before the notice takes effect.

"The transitional arrangement will guarantee that existing tenants will have sufficient time (at least one year after the tenancy term expires) to find alternative accommodation before they have to move out of their rented premises in case landlords do not want to renew the tenancies," the spokesman said.

"The arrangement helps mitigate the impact of the removal of security of tenure regime on tenants of tenancies in existence before the commencement of the Ordinance," he added.

"However, if the landlord and tenant of the existing tenancy agree to change any term of the tenancy, such as rental, after the commencement of the Ordinance, they will no longer be subject to the transitional arrangement. Also, the transitional arrangement does not apply to new tenancies entered into or renewed after the commencement of the Ordinance," the spokesman added.

Landlords' right to repossess premises for self-occupation is preserved under the transitional arrangement. Notwithstanding the transitional arrangement, after the term of the tenancy has expired, the landlord can apply for an order for possession on self-occupation ground from the Lands Tribunal, irrespective of whether a TTN has been served or not.

For non-domestic tenancies which have not expired on the commencement of the Ordinance, landlords and tenants may terminate the tenancies in accordance with the terms of the tenancy or as agreed between the parties. In the absence of a tenancy term or mutual agreement on how a non-domestic tenancy should be terminated, a fixed term tenancy will come to an end upon expiry, whereas a periodic tenancy will be terminated by a notice to quit in accordance with the common law.

If the non-domestic tenancy has already expired but is still continuing as a month-to-month tenancy, the parties may terminate the tenancy by mutual agreement or serve a notice to quit on the other party one month before the intended termination date.

Details of the Ordinance contained in the Government Gazette published today.

Explanatory leaflets on the Ordinance and sample TTN are available from District Offices. Relevant information is also available at the Rating and Valuation Department's website at http://www.info.gov.hk/rvd. For enquiries, please call 2152 0111.

Ends/Friday, July 9, 2004

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