John Mark Essington Boulton v. Loon King Development Co Ltd

LDLA000062/1982

IN THE LANDS TRIBUNAL OF HONG KONG

Application L.T. No. 62 of 1982

Coram: TRIBUNAL :  His Honour Judge Cruden, Presiding Officer and M.W. Phillips, Esq., Member.

Date: 29th day of March, 1983

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JUDGMENT

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1. The applicant tenant has applied pursuant to Section 117(1) of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7 for a new tenancy in respect of the domestic premises being House 17, Turtle Cove Villas, Tai Tam, Hong Kong.

2. The suit premises, which are owned by the respondent, were earlier let by the respondent to the applicant for a period of 6 months from the 1st day of June, 1981 at a monthly rent of $25,000 exclusive of rates. Since the expiration of the contractual tenancy the applicant has remained in possession. The rateable value of the suit premises is $99,600 and there is no dispute that they are subject to Part IV of the Ordinance.

3. The applicant sought and the respondent was willing to grant a new tenancy. It was further agreed that the new tenancy should be for a period of 2 years and 8 months from the 1st day of October, 1982. The new tenancy, apart from a dispute over rent, was to be in the same terms as the old tenancy. We hold that this will include a similar deposit clause but for a sum equal to two months of the new rent yet to be determined. Similarly the costs and disbursements of the new tenancy agreement will be paid equally by the parties.

4. In addition, the issue arose whether certain renovation work, particularly in regard to the kitchen, was to be carried out by the respondent. It is convenient to deal with this issue first. The suit premises are part of a development of 20 townhouses at Turtle Cove owned by the respondent. A large number of these townhouses have recently been renovated. The renova-tions, in addition to routine maintenance and redecoration, have included substantial improvements to the kitchens. The suit premises have yet to be renovated. The respondent indicated that it was willing to carry out these renovations. The applicant requested time to consider whether it wanted these renovations to be effected. The Tribunal was informed on the 25th day of February 1983 that the applicant did not wish to have these renovations carried out. We will therefore determine the fair market rent in respect of the premises as they existed at the date of the hearing and will not take into account the possibility that the respondent, during the new tenancy, may effect renovations similar to those already effected in most of the townhouses at Turtle Cove Villas.

New rent

5. The remaining issue to determine is the new rent. The suit premises are in the lower of the two rows of similarly designed Turtle Cove Villas houses. This development was completed in 1971 and overlooks Tai Tam Bay with pedestrian access down to Turtle Cove Beach. The 20 Turtle Cove Villas townhouses also have the use of a communal swimming pool adjacent to both rows of townhouses.

6. This particular townhouse in common with the others of Turtle Cove Villas, comprises about 240 square metres (2600 square feet approx.) excluding a covered double garage. The three storey, split level design includes the living-dining area, a half-level below the entrance with the main bedroom, family room and servants quarter a half-level above the entrance. The two remaining bedrooms are another half-level above the main bedroom level. There is a small terrace opening from the living area with a short flight of steps down to a small garden which extends around one side of the premises.

7. The applicant's valuer Mr. Moffoot, assessed the fair market rent at $26,500 per month exclusive of rates but inclusive of management charges. In arriving at that valuation he took into account comparables both within Turtle Cove Villas and outside. The 5 Turtle Cove Villas com-parables were in respect of new tenancies in 1981 and 1982 let, in chronological order, at rentals of $28,000, $31,000, $31,000, $31,000 and 328,000. All those rents were exclusive of rates but inclusive of management charges. Mr. Moffoot pointed out that the most recent of those lettings, at $28,000 on the 1st day of September, 1982, was particularly relevant as the kitchen of that property had also not been renovated.Mr. Moffoot also went outside Turtle Cove Villas and considered other properties in Stanley at Eden View, Stanley Knoll and Grosse Pointe Villas.

8. Mr. Kan, for the respondent relied on comparables within Turtle Cove Villas which were all let for $31,000 per month, namely Houses 9, 18 and 20 in October 1982 and House 16 in January 1983. Mr. Kan assessed the fair market rent of the suit premises as at the 1st day of October 1982 at $31,000 per month. This assessment was on the basis that the respondent would carry out the renovation work already earlier mentioned. If that work were not to be carried out, Mr. Kan stated he would reduce his valuation to $30,000 per month.

9. We accept that the current rents in Turtle Cove Villas are very similar. As to the few houses with relatively new rentals of less than $31,000 per month one of the exceptions was the new tenancy from the 1st day of September 1982 at $28,000 per month referred to in Mr. Moffoot's report. Mr. Kan suggested as a probable explanation for that lower rental the bargaining position or skills of that particular tenant. We must give due weight to that opinion.

10. This was an application where the very similarity of the rents available by direct comparison within Turtle Cove Villas made it useful to go outside the development to check those rents against other rents for comparable properties in a similar locality. We agree with Mr. Moffoot that the Stanley comparables he cited, other than Grosse Point Villas, are generally superior to Turtle Cove Villas. The Stanley com-parable at Grosse Point Villas was the subject of our recent judgment in Towers. Perrin Forster & Crosby Inc. v. Suvindra Ltd. L.T.No 57/82 where the fair market rent was determined at $28,000 per month exclusive of rates and management charges as at 15th October 1982. The latter property did not share a communal swimming pool and as a duplex flat would also tend to have a lesser value than a townhouse. In comparing the different localities each has advantages and disadvantages. However, Stanley's more convenient position would seem, on balance, to constitute a more attractive locality.

11. We are left, as far as the valuers evidence is concerned with Mr. Moffoot's valuation of $26,500 and Mr. Kan's valuation, for the, unrenovated premises, of $30,000. We also remind ourselves of the Turtle Cove Villas letting of $28,000 already referred to and considered by both valuers.

12. After taking all these factors into account we determine the new rent to be $29,000 per month exclusive of rates but inclusive of management charges. There will be no order as to costs. Liberty to apply is reserved.

13. Dated this 29th day of March, 1983.

Representation:

Mrs. M. Fok of Slaughter and May for the applicant.

Mr. J. Tse of K.K. & Winston Chu for the respondent.