h) Submission of Notice of Tenancy and Stamping of Tenancy Agreement

h) Submission of Notice of Tenancy and Stamping of Tenancy Agreement

Once a tenancy agreement of a regulated tenancy has been offered by the landlord and signed by the tenant (or endorsed by the tenant in case of an oral tenancy), the landlord is obliged to submit the Notice of Tenancy to the Commissioner of Rating and Valuation (Commissioner) and stamp the Tenancy Agreement at the Inland Revenue Department (“IRD”).  The responsibility to submit the Notice of Tenancy also applies to landlords offering oral tenancies regulated by Part IVA of the Landlord and Tenant (Consolidation) Ordinance (Cap. 7).

Please note that the tenancies concerned are still regulated by the Ordinance if the landlord fails to submit the Notice of Tenancy or stamp the tenancy agreement. On the contrary, there might be legal consequences for landlords who fail to do so.

Notice of Tenancy (Form AR2)

The landlord must, within 60 days after the term of a regulated tenancy (including a first term tenancy and a second term tenancy) commences or is taken to commence under the Ordinance, submit a completed Notice of Tenancy (Form AR2) to notify the Commissioner of the particulars of the tenancy.

If the landlord, without reasonable excuse, refuses or neglects to comply with this requirement, the landlord commits an offence and is liable on conviction to a fine at level 3 (HK$10,000), and in the case of a continuing offence, to a further fine of HK$200 for each day during which the offence continues. Moreover, the landlord may not maintain an action to recover any rent under the tenancy unless the notice is endorsed by the Commissioner.

On receiving the notice, the Commissioner must endorse the notice with the date of its receipt, and notify the landlord and tenant of the receipt of the notice.

Stamping of Tenancy

The landlord must, after receiving the tenancy agreement signed by the tenant, arrange for the tenancy agreement to be stamped under the Stamp Duty Ordinance (Cap. 117) and return to the tenant a counterpart of the stamped tenancy agreement within 30 days.

If the landlord fails to return the counterpart of the stamped tenancy agreement, the tenant may withhold the payment of rent until the landlord has done so. However, if the landlord has eventually returned the said counterpart, the tenant must pay back, free of interest, any rent withheld to the landlord within 15 days after receipt of the counterpart.

The Ordinance stipulates that the stamp duty on the tenancy agreement of regulated tenancies is to be borne by the landlord solely.

Compared with Non-Regulated Residential Tenancies

The requirement of noticing the Commissioner in the regulation is more stringent than the one required for common residential tenancies that are not regulated by Part IVA of the Ordinance. The landlord in a non-regulated tenancy is also required to submit a Notice of New Letting or Renewal Agreement (Form CR109) to the Commissioner. Similarly, the landlord shall not be entitled to maintain an action to recover any rent under the tenancy unless the notice is endorsed by the Commissioner. However, failure to submit the notice does not involve criminal offences.  The notice may be lodged within 1 month of the tenancy term without charge, or upon payment to the Commissioner of a fee at any time.

As for the regulation on the stamping of tenancies, the requirement to the landlord is more stringent than common residential tenancies. As far as the concern of non-regulated tenancies, the landlord, tenant and any other persons signing the tenancy agreement are liable for payment of stamp duty. Failure to return the counterpart of the stamped tenancy agreement might not be a justifiable reason for the tenant to withhold the payment of rent.