I want to rent a residential property

According to the “Estate Agency Agreement”⁶  signed between the estate agent and the tenant, unless the tenant explicitly waives the right to receive it, the estate agent must provide the tenant with a completed “Leasing Information Form” (Form 2). This form includes various details about the property, such as the name or title of the property owner, valid encumbrances registered with the Land Registry (e.g. mortgages or charges), floor area, year of completion, usage restrictions, and leasing restrictions.

Before arranging for the contracting parties to sign the tenancy agreement, the estate agent must carefully verify the names on the identity cards or identification documents of all parties for a proper identity verification. To avoid fraudulent misrepresentation regarding identity in residential property tenancy agreements, the estate agent must take all practical steps to ensure the accuracy of the landlord's name or title. If the landlord is an individual, the estate agent should obtain a copy of their Hong Kong identity card or other identification documents.

A mortgage agreement will usually stipulate that, unless the landlord has obtained the bank’s approval⁷, the mortgaged property cannot be leased out. Otherwise, the bank will not recognise the tenant’s tenure. If the landlord lets the property out without the bank’s approval and then stops repaying the mortgage, when the bank takes possession, the tenant will lose his right to continue renting the property. The tenant may also be unable to get his deposit back.

Different units within a building might have different restrictions. In general, the user restriction of a property is stated in the occupation permit, the Deed of Mutual Covenant or the government lease with which both landlord and tenant should comply. Estate agents should provide such information to the prospective tenant.

When selecting a property to rent for residence, tenants should only choose a residential property. There might be safety issues residing in an industrial or commercial property; there is also the risk of the government exercising its right of re-entry or closure of the property, and the possibility of the property not being covered by insurance.

There are leasing restrictions for certain types of residential properties. For example, flats under the Home Ownership Scheme or the Tenants Purchase Scheme of the Hong Kong Housing Authority are subject to the Housing Ordinance. Before the alienation restriction is removed, such flats shall not be leased. Estate agents should conduct a land search to ascertain whether a Letter of Removal of Alienation Restriction has been issued for such flats. Tenants should also pay attention to item 5 “Restrictions on leasing” under Part B in Form 2.

Estate agents handling residential property leases should conduct land searches to verify if the property is subject to demolition or corrective illegal construction orders. If the property involves illegal construction works, agents must inform clients about these facts and the associated risks (e.g. the government's right to reclaim the land, safety concerns, potential closure of the property), and advise clients to seek legal advice before proceeding with the lease transaction. Tenants should carefully consider whether they wish to reside in a property with illegal construction works.

Note: If the property is an “subdivided unit”, please click here to the “Other Topics” section for the points-to-note when renting such unit.