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"Rent control under Part I and Part II of the Landlord and Tenant (Consolidation) Ordinance will expire as scheduled on December 31, 1998," a spokesman for the Housing Bureau said today (Saturday).

The present rent control legislation, the Landlord and Tenant (Consolidation) Ordinance, was enacted in 1973. It applies to a small number of pre-war and some post-war domestic tenancies (the latter being those tenancies in premises built before June 19, 1981 and created before June 10, 1983).

There are now about 15,000 such tenancies (or about 18,000 households) in the territory, constituting only about one per cent of all private domestic premises.

"It is the Government's established policy to phase out rent control gradually. In 1993, legislation was passed by the Legislative Council to provide a mechanism for gradually adjusting controlled rents to prevailing market levels.

"This phased programme has worked well, and modest increases in rent have been spread out over time. Tenants in controlled premises now on average are paying 90 per cent of the prevailing market rent.

"With domestic rents falling steadily in the past year, the gap between market rent and controlled rent has narrowed. Decontrol will not have much adverse impact on tenants involved," the spokesman said.

"Upon decontrol, about 70 per cent of the tenancies will not face any immediate increase in rent in 1999 as their rents have already been adjusted this year or they are already paying market rent. About 25 per cent of tenants due for rent revision will face an average increase of less than 10 per cent of their existing rent. These tenants will continue to enjoy security of tenure", he added.

For many decades, rents of controlled premises have been suppressed at artificially low levels at the expense of landlords. This is particularly unfair to landlords of older premises who are increasingly required to upkeep their premises in order to meet various requirements relating to building, fire safety and maintenance standards.

Seen in present-day circumstances, rent control has been applied arbitrarily and artificially to a small group of tenants according to the age of the premises or the date on which a particular tenancy was created, regardless of the financial situation of these tenants. This special treatment creates an inequitable situation as the large majority of tenants in the private sector are paying market rent.

"The phasing out of rent control is in line with established policy and is the considered decision of the Legislative Council to remove inequity and distortion in the market", the spokesman reiterated.

End/Saturday, December 19, 1998

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