Read the full judgment text of LDLA 000001/1982 on BabelCite. This LDLA judgment was delivered on 27 August 1982 before His Honour Judge Cruden, President and M.W. Phillips Esq, Member.
Landlord and tenant – Part IV of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7 – Grant of new tenancy – Limited role of Lands Tribunal – Fair market rent – Section 119K – Security of tenure – Three domestic flats at No. 5 Headland Road initially let in 1979 for two-year terms at $17,000 to $21,500 per month – Leases expired 30 April 1981 – Tenants (Mass Transit Railway Corporation, Lloyds Bank International Limited, and Chase Manhattan Bank N.A.) applied for new tenancies under Section 117(1) – Parties agreed on all terms except the new rent – Sole issue: determination of fair market rent under Section 119K – Whether Part IV is rent control legislation or solely security of tenure – Held that Part IV provides only security of tenure protection and does not include any rent restriction provisions – The Tribunal has no power to control or directly influence rents under Section 119K – Whether subjective factors (old rent, length of possession, percentage increase, inflation) can be considered when fixing the new rent – Held that the Tribunal has no discretion to use the old rent as a base and must ascertain the current fair market rent as at 1 July 1982 – The Tribunal must reflect, not precipitate, stimulate or restrict market changes – Whether the Tribunal can fix a non-market rent – Held that the Tribunal cannot do so, as its statutory duty is to fix the fair market rent – Whether the unit rate per square foot is the appropriate method for high-end domestic premises – Held that for flats over 2,500 square feet, design, layout, finishes, number of bedrooms, and special features become more important than mere square footage – Whether town houses command higher rents than flats – Held that single unit houses command higher rents than town houses, which in turn command higher rentals than flats – Allowance of $3,000 per month for the gardens of Units 1 and 2 and $1,000 for the rooftop of Unit 5 – $500 per month allowance for electrical appliances – Garden flats Units 1 and 2 (228 sq m): fair market rent fixed at $38,500 per month – Duplex Unit 5 (220 sq m): fair market rent fixed at $35,500 per month – All exclusive of rates and management charges – Liberty to apply reserved for consequential matters.
Legal issues: Limited statutory role of Lands Tribunal under Part IV · Relevance of subjective factors and old rent in fixing new rent · Appropriate valuation method for high-end domestic premises
Outcome: The Tribunal determined the fair market rent for each of the three units and granted new tenancies at those rents.