Hong Kong Orientation Guide

Hand-over

Keystotheflatarenormallygiventothetenantthedaytheleasebegins,andthisiscalledthe“hand-

over.”Sometimeskeysaregiventothetenantaftertheleasehasbeensigned,afewdaysbeforethe

commencementofthelease.Anyproblemsordefectsatthepremisesshouldbedocumentedand

reported to the landlord as soon as possible. The importance of this cannot be overemphasized.

Handling Fees

The industry standard for agents’ handling fees in Hong Kong, recommended by the Institute of

Chartered Surveyors, is half of one month’s rental.

Duration of Term

A lease or tenancy agreement between the landlord and the tenant usually has a termof two

years. Landlords usually grant a “break clause” option that allows the tenant, under carefully

defined circumstances,togive the landlordanearlynoticeoftermination.Undera typicalbreak

clause,thetenantispermittedafteroneyeartogiveatwoorthreemonth’swrittennoticeof

intent to the landlord to terminate the lease agreement without any penalty. Another type of break

clausethatisbecomingmorepopular withlandlords isthe“diplomatic”break clause.Thisdiffers

fromthestandardbreak clause in that the tenantcannotgivenotice to terminate theagreement

unless he is leaving the employment of his employer or relocating out of Hong Kong.

Early Termination

Shouldanearlyterminationofyourleasebe required,the landlord’sprioragreement mustbe

obtained. The Tenancy Agreement is legally contractual agreement and your non-performance

of your duties could quite possibly be enforced in a court of law.There is no industry standard

forpenalties chargedforearlytermination,asthe landlordwilltypicallyholdthe tenantliablefor

the full termof the contract up to the earliest possible termination

you stop paying your

rent,the landlordmay consider you in breach of your lease and this non-performance of your

contractual obligations couldquite possiblyprovide the landlordwitha reason to tryand forfeit

your security deposit. The landlord might seek forfeiture of the security deposit over and above

the rental sought for the contractual period of the lease. The landlord may also engage a solicitor

to try and sue for damages (unpaid rent). There is no industry standard for penalties charged

for early termination,as the landlord will typically hold the tenant liable for the full termof the

contract up to the earliest possible termination date.

The notice to terminate your lease should be served in strict accordance with what is outlined in your

Tenancy Agreement; this might include having to serve the notice by registered mail or in person, or

only at the end of a calendar month.This will be clearly stipulated in your TenancyAgreement.