Tenancy Practice and Procedure

The procedure for letting a property commences with the property being made available to let by the property owner. It is so common for a property owner to let his property through property agents. Please find below the usual practice and procedure for letting a property through property agents and solicitors:

  1. The property owner makes his/her property available to let through licensed property agents.
  2. The tenant looks for a suitable property to let through a licensed property agent.
  3. The property owner and the tenant negotiate, usually through the property agent, as to the basic terms for letting the property, for instance, monthly rental, term of the tenancy (duration and commencement date), including any furniture and electrical appliances etc.

  4. The property owner writes to the mortgagee of that property to seek the mortgagee’s consent for letting of that property.
  5. The property owner and the tenant sign a provisional tenancy agreement and the tenant pays the property owner an initial deposit.
  6. The provisional tenancy agreement may provide that it shall not take effect unless and until the property owner’s mortgagee consents to the letting of that 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 solicitors of the property owner prepare the formal tenancy agreement draft (“the formal agreement”), and send the same to the solicitors of the tenant for approval.
  9. The solicitors of the tenant will amend the formal agreement draft in order to protect the tenant’s interests if necessary.
  10. Both parties through their solicitors agree on the terms of the formal agreement. The solicitors of the property owner engross the formal agreement and send the same (in duplicate) to the solicitors of the tenant.
  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 property owner).
  12. The tenant’s solicitors send the formal agreement, the balance of the deposit and one month’s rental in advance to the property owner’s solicitors on or before the date specified in the provisional tenancy agreement for the signing of the formal agreement.
  13. The property owner’s solicitors arrange for the property owner to sign the formal agreement and release the balance of the deposit and one month’s rental in advance to the property owner who also pays the legal costs and stamp duty (to be shared equally with the tenant).
  14. The property owner’s solicitors will arrange for the property owner to sign Form CR 109 (in triplicate).
  15. The property owner’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 property owner’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 property owner.

In other situations, the property owner and the tenant may negotiate the terms through a property 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 property agent will normally assist the property owner 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 property owner to submit Form CR109 to the Rating and Valuation Department.

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