Termination of Tenancy and relevant matters
3
Lessons
3
Videos
All
Skill Level
15 Mins
Duration
English
Language
Overview
Welcome to the “Termination of Lease” section of Sherlock Homes! Sometimes you may wish to end your lease early when the rental prices of neighbouring properties suddenly plunged; sometimes, you may be frustrated where your landlord seeks to terminate your lease early. Keep calm and worry no more – here we are to provide you with useful information and materials to help you handle these kinds of situations at ease.
Whilst previous sections dealt with pre-lease issues, the anatomy of a lease agreement, conflicts between tenants and landlords as well as disputes among tenants, this section centers around issues relating to the termination of tenancies to provide a perfect wrap for your home search & rental journey. Here you can get access to clear guidelines, understand your rights and responsibilities, and most importantly, stay informed and stay curious while watching our interactive videos. But remember – these are mere guidelines and information, which are not intended to be relied on as legal advice. Please seek professional legal advice where appropriate and necessary.
- Can your landlord forfeit your rental deposit? If you breached the tenancy agreement, can your landlord claim compensation from you beyond the rental deposit which you paid?
- Can you terminate your tenancy early even if your landlord has not committed any breach?
- Can your landlord terminate your tenancy of a subdivided unit early?
Topic 1: Can my landlord forfeit my rental deposit? If I breached the tenancy agreement, can my landlord claim compensation beyond such a deposit?
Tenants’ payment of rental deposit serves as a security measure and means to demonstrate their commitment to fulfilling their obligations under the tenancy agreement. Hinging on the specific terms outlined in your tenancy agreement, your landlord may be able to forfeit some or all of the rental deposit if you fail to pay rent or any other amount required under the tenancy agreement, or if your landlord incurs damages because of your failure to meet your contractual responsibilities.
But don’t worry – so long as you perform all your contractual obligations, your rental deposit is yours to keep!
Your landlord is entitled to do so if he/she is able to prove his/her further losses from your wrongful termination. A vivid example would be circumstances where finding a replacement tenant is infeasible under current market conditions – in that case, your landlord’s loss of rent for the remaining unexpired period could be awarded as damages too!
As illustrated in a Hong Kong case (Golden Investment Ltd v NPH International Holdings Ltd HCA 5457/1999 (10th August 2004)) which we will be covering in greater detail in the video, a tenant could even be ordered to pay a substantial sum to the landlord. Click into the video to take a look!
Court | Amount Claimed |
Small claims tribunal | ≤ HK$75,000 |
District Court | > HK$75,000 but ≤ HK$3,000,000 |
Court of First Instance | > HK$3,000,000 |
Topic 2: Can my landlord terminate my tenancy of subdivided unit early?
On 22 January 2022, Part IVA of the Landlord and Tenant (Consolidation) Ordinance (the “LTCO”) took effect. Interestingly, this part specifically regulates tenancies of subdivided units, defined as “Regulated Tenancies” under the LTCO. For more details as to what constitutes a “regulated tenancy” for the purposes of Part IVA of the LTCO, take a look at this poster above!
Generally, a landlord cannot terminate a tenancy of a subdivided unit before the 4-year term guaranteed by Part IVA of the LTCO. However, a landlord is entitled to do so if a tenant has breached any specified provisions under the LTCO, namely, provisions under Part 4 of Schedule 7 to the LTCO, and/or Section 120AAZ(7) of and Section 4 of Part 2 of Schedule 7 to the LTCO. Want more details? Indulge yourself in our engaging video to learn more about it!
Topic 3: Can I terminate the tenancy early even if my landlord has not committed any breach?
A break clause allows either party to the tenancy agreement to serve a notice to quit, or to terminate the lease early after the lapse of a certain period or when certain incidents occur. In other words, a party may ‘break’ the tenancy agreement even before it expires! You might wish to invoke a break clause if, say, you want to get out of your current lease early to get a cheaper deal because the rental prices in your neighbourhood have recently plunged.
However, it is crucial to note that, the break clause applies to both parties to a tenancy agreement under the law. Hence, as long as the landlord follows the terms outlined under the tenancy agreement, he/she is within his/her rights to invoke it too! Notably, it is usually lawful for a landlord to demand a rent hike from the tenant by threatening to invoke the break clause – this is to uphold parties’ freedom to negotiate on commercially favourable terms based on their respective bargaining powers.
There are some typical preconditions which a tenant must fulfil before he/she gets to invoke the break clause. For example, the tenant might need to provide prior notice at a prescribed time, or make a payment instead of such notice if so agreed between the parties. Also remember that such notice must be clear about the tenant’s intent to break the lease – the court would consider whether the notice is clear to a reasonable recipient reading it! Click into the video to learn more!
Disclaimer
“Nothing in this website is intended to be nor should be construed as legal advice. This is an educational project created by students. Please consult your lawyer for legal advice.”
Please read this disclaimer carefully before using the information provided in our Legal Information Centre.
- Legal Information, Not Legal Advice: The content provided on this site, including any sample lease agreement clauses, are intended for informational purposes only. They do not constitute legal advice. You should not act or refrain from acting based on any information provided on this site without first consulting with a legal or professional advisor.
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- Variability of Lease Agreements: The lease agreement clauses provided here are common clauses typically found in a standard tenancy agreement and are provided only as examples. They may not cover all aspects of a lease agreement and may not suit your specific circumstances. Each tenancy agreement is unique and may contain different terms, conditions, and clauses. Always review your specific agreement carefully and consult with a legal advisor if necessary.
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