Q2. Can I draft my own regulated tenancy agreement? What are the essential terms of the tenancy agreement?
Yes. The template is for general reference only. The landlord and tenant may use and adapt the template with modifications as appropriate, or enter into a tenancy agreement on their own terms, as long as there is no conflict or inconsistency with the mandatory terms of a regulated tenancy:
- Tenancy term: The term of regulated tenancies must be 2 years. Even if a tenancy purports to be a tenancy for a term other than 2 years, the term of the tenancy is taken to be 2 years (see Section 120AAQ);
- Break clause for the landlord: Any break clause allowing a landlord to terminate the tenancy early is void and has no effect (see Section 120AAQ);
- Break clause for the tenant: Any break clause allowing a tenant to terminate the tenancy at a predetermined date later than the first day of the second year of the term, or the absence of a break clause for the tenant, will be taken as having one allowing the tenant to terminate the tenancy on the first day of the second year of the term with a notice period of 30 days (see Section AAZH);
- Landlord’s right of re-entry: Any condition for forfeiture (other than those set out in Part 4 of Schedule 7) provided in the tenancy is void and has no effect (see Section 120AAZF, Part 4 of Schedule 7);
- Amount of rental deposit: The rental deposit payable by the tenant may not be more than 2 months’ rent under the tenancy (see Section 120AAZC(2));
- Return of rental deposit: The rental deposit should be returned, free of interest, no later than the expiry of 7 days after the tenant’s delivery of vacant possession of the subdivided unit to the landlord (see Section 120AAZC(4));
- Repair and maintenance responsibilities: The repair and maintenance responsibilities of the facilities and fixtures set out in Part 2 of Schedule 7 are to be borne by the landlord (see Section 5 of Schedule 7);
- Payment of money of certain types: The landlord cannot require the tenant to pay any money in relation to the tenancy other than specified items (see Section 120AAZL);
- Payment for specified utilities and services: The landlord cannot require the tenant to pay for reimbursement of utility and service charges as a separate payment from the rent, where the aggregation of the amount exceeds the amount under the bills issued by the relevant authorities (see Section 120AAZM);
- Stamp duty: The stamp duty on the tenancy agreement is to be borne by the landlord solely. It is the responsibility of the landlord to arrange for the stamping of the agreement under the Stamp Duty Ordinance ( 117) (see Section 2 of Schedule 7).
If the landlord enforces the tenancy terms that are inconsistent or in conflict with those of mandatory terms in a regulated tenancy, depending on the terms, in addition to the potential liability for criminal offences (e.g., overcharging for reimbursement of utility and service charges), the resulting disputes may also be resolved in civil proceedings. Tenancy terms that are inconsistent with mandatory terms stipulated in the Landlord and Tenant (Consolidation) Ordinance (Cap. 7) will be deemed void or equivalent to the relevant terms stipulated in the Ordinance.