Raymond T.L. Tse & Co., Solicitors

A tenancy agreement could be created :

• orally and/or by conduct. As literacy has improved over decades, this type of oral tenancy is less common nowadays than in the past, but you may still find such oral tenancy for units or cubicles with small amount of rent. 

• in writing. This is by far the most common form of tenancy, especially if the term of tenancy is 2 years of more.

• by deed under seal. For lease term over 3 years, this is required by law under section 4 of Conveyancing and Property Ordinance, Chapter 219 of the Laws of Hong Kong, where it provides that a legal estate in land may be created, extinguished or disposed of only by deed, but lease taking effect in possession for a term less than 3 years at the best rent without a premium is exempted from this requirement.

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Tenancy is distinguished with a licence in that exclusive possession of the land/property is given to the tenant under a tenancy arrangement, whereas in a licence, the licencee may not have exclusive possession of the land/property. This distinction is less important in daily life if the obligations and liabilities of the parties are clearly defined and set out in full in writing. 

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As a rule of thumb, both landlord and tenant must adhere to the terms of the tenancy agreement; and neither of them could terminate the tenancy or breach the conditions and stiplulations prematurely before the fixed term expires. To give greater flexibility,  modern tenancy agreement may allow either or both party an early termination clause exercisable at the option of the giving party by giving  to the other party 2 or 3 months prior notice to early terminate the tenancy at the expiry of such notice period.

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When rental is rising, the tenant of larger size premises may wish to insert a renewal clause to extend the term upon expiry of the initial term, whereas the renewed rent may be agreed upon nearer expiry of the initial term, or be assessed by independent surveyor whose cost is to be shared equally. 

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If you wish to enter into a tenancy/lease soon, please consult us to advise you on the best terms and conditions which could afford you, whether as a landlord or as a tenant, the best available options/choices to consider and adopt. 

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Our firm could also take care of the stamping, registration (if required), filing of CR109 (for residential unit/property) which may otherwise be overlooked.