3. There is an option to renew clause in the tenancy agreement signed between the old landlord and the tenant. The tenant tries to exercise the option to renew, but the new landlord refuses. Can the new landlord do so?

3. There is an option to renew clause in the tenancy agreement signed between the old landlord and the tenant. The tenant tries to exercise the option to renew, but the new landlord refuses. Can the new landlord do so?

It depends on whether the option to renew has been duly registered in the Land Registry.

An option to renew in a written tenancy agreement is an interest in land registrable in the Land Registry under section 3(1) of the Land Registration Ordinance (Cap. 128), irrespective of whether the tenancy is for a term not exceeding 3 years.

Non-registration of registrable instrument is rendered absolutely null and void to all intents and purposes as against any subsequent bona fide purchaser for valuable consideration of the same property, regardless of whether the purchaser has notice of the option to renew or not.

So if the written tenancy agreement containing the option to renew has not been duly registered in the Land Registry, it is not binding on a subsequent bona fide purchaser for value.

In contrast, if the tenancy agreement has been so registered, the option to renew takes priority and the new landlord is not entitled to refuse if the tenant chooses to exercise the option to renew.