(6) Tenancy Practice and Procedure

The procedure for letting a property commences with the property being made available to let by the landlord. In Hong Kong, it is fairly common for a landlord to let his property through estate agents. The practice and procedure for letting a property through estate agents and solicitors is as follows:

	1.	The landlord makes his property available to let through estate agents.

	2.	The tenant looks for a suitable property to let through an estate agent.

	3.	The landlord and the tenant enter into negotiations, usually through the estate agent, as to the basic terms for letting the property, for example, monthly rental, term of the tenancy (duration and commencement date), furniture and electrical appliances included, if any, etc.

	4.	The landlord writes to the mortgagee of the landlord's property to seek the mortgagee's consent to the letting of the property.

	5.	The landlord and the tenant sign a provisional tenancy agreement and the tenant pays the landlord an initial deposit.

	6.	The provisional tenancy agreement may provide that it shall not take effect unless and until the landlord's mortgagee consents to the letting of the property.

	7.	The parties appoint their respective solicitors (the parties may appoint one firm of solicitors to represent both provided that there is no conflict of interest).

	8.	The landlord's solicitors prepare the draft formal tenancy agreement ("the formal agreement"), and send the same to the tenant's solicitors for their approval.

	9.	If necessary, the tenant's solicitors will amend the draft formal agreement, to protect the tenant's interests.

	10.	The parties through their solicitors agree on the terms of the formal agreement. The landlord's solicitors engross the formal agreement and send the same (in duplicate) to the tenant's solicitors.

	11.	The tenant's solicitors arrange for the tenant to sign the formal agreement, and the tenant at the same time pays the balance of the deposit and one month's rental in advance (as advance payment of the rent for the first month of the tenancy) together with legal costs and stamp duty (to be shared equally with the landlord).

	12.	The tenant's solicitors send the formal agreement, the balance of the deposit and one month's rental in advance to the landlord's solicitors on or before the date specified in the provisional tenancy agreement for the signing of the formal agreement.

	13.	The landlord's solicitors arrange for the landlord to sign the formal agreement and release the balance of the deposit and one month's rental in advance to the landlord who also pays the legal costs and stamp duty (to be shared equally with the tenant).

	14.	The landlord's solicitors will also arrange for the landlord to sign Form CR 109 (in triplicate).

	15.	The landlord's solicitors will usually arrange to submit the tenancy agreement (in duplicate) for stamping at the Stamp Duty Office and Form CR 109 (in triplicate) at the Rating and Valuation Department.

	16.	After the tenancy agreement (in duplicate) is duly stamped, the landlord's solicitors will return the counterpart thereof to the tenant's solicitors for onward transmission to the tenant and return the tenancy agreement to the landlord.

In other situations, the landlord and the tenant may negotiate the terms through an estate agent and enter into a standard form of tenancy agreement commonly available in local bookstores. The actual practice and procedure for such situations may be different from those described above. The estate agent will normally assist the landlord and tenant to sign the tenancy agreement (in duplicate), arrange for the paying and receiving of deposits and the stamping of the tenancy agreement, and advise the landlord to submit Form CR109 to the Rating and Valuation Department.

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