Chan Siu Kan owned a property in Ma On Shan and she let it in August 2002. After giving her a cheque for the deposit, the tenant moved in.

Later the cheque was proved invalid. And at the same time, Miss Chan found that her tenant had changed the door lock and the phone number of her apartment.

In November, Miss Chan broke the new door lock and tried to break into her house. Her tenant called the police and Miss Chan was charged of criminal vandalism.

Based on the information from the Lands Tribunal, the number of tenancy disputes increased from 3,506 in 1997 to 5,207 in 2001. It is estimated that another 10,000 cases involving “professional tenants”, people who refuse to pay rent and move out of the premises, are not reported every year.
Micheal Shea Hing Wan, the chairperson of the Hong Kong Millihouse Owners’ Club, complained that there is not enough legal protection for property owners against unscrupulous renters.

“It is unfair that the cases of professional tenants are treated in the same way as ordinary tenancy disputes. Their behavior is intentional” he said.

“The acts of hiding from the landlords and escaping from paying the rent are only counted as civil offences unless the tenants have vandalized the flat or stolen something.”

In another case, a tenant stole all electrical appliances and furniture in the rented unit. After the owner reported this to the police, he put all the things back. Under the persuasion of the police, the owner dropped the charges.

“It is hard to penalize default renters,” said Mr. Shea. “And it takes a long time, basically six to nine months, for owners to evict default renters by legal means.”

Professional tenants may use various excuses, such as being unemployed and having stacks of unpaid credit card bills, to postpone the moving-out deadline ordered by the court.

“Even if property owners win the lawsuits, they still have to collect the rent by themselves. In fact, less than 5 percent of them can get the rent back,” said Mr. Shea.

There is also a risk that tenants who lose the lawsuits will damage the flat as revenge. For example, they take away cupboard drawers or flood the house with water, rubbish and feces.

However, those actions are not criminal offences.

Nevertheless, Mr. Shea admitted that some property owners are careless.

“Most of them rely heavily on estate agencies and are unaware of the current laws
about tenancy.

“Some owners give keys to their tenants before completing all proper procedures
to reach a tenancy agreement.”

According to Mr. Shea, premise owners lose about $500 million each

year in Hong Kong to default renters. The government, in turn, loses

tax revenue of approximately $75 million.

“I can’t understand why the government still doesn’t fix the problem,” he said.

Audrey Eu, who is involved in drafting new legislation on the matter, agreed that a review of current laws is needed.

Currently, the Landlord and Tenant Ordinance, which was enacted in 1947, focuses more on the control of rents and the protection of tenants.

“But now, many property owners are suffering negative equity and are in debt,” said she. “More protection should be provided for them.”

In fact, the government published a gazette concerning the revision of the ordinance in early 2001.

It simplified the reclamation procedures and introduced more protective measures to flat owners.

“For example,” Miss Eu said, “property owners now have the right to reclaim their permises, even in oral agreements, under the condition that their tenants repeatedly refuse to pay for the rent, change the structure of the flat without permission, or use the flat for illegal activities.”

Yet, many owners are still dissatisfied with the arrangement.

Mr. Shea said, “The Housing Bureau legitimates the owners to sue tenants if they have delayed the payment for 15 days.

“But actually, the Lands Tribunal has already provided a similar guideline. What the government did was put this proposition on paper only.

“There’s no practical improvement.

“We welcome the newly reviewed ordinance, which shortens the time for the reclamation process,” Mr. Shea continued.

“But the simultaneous increase in the penalty of harassment and unlawful eviction of tenants makes it difficult for lenders to collect rent.”

The maximum penalty for harassment and unlawful eviction has now been increased to a fine of $500,000 and 1 year imprisonment.

Mr. Shea considered this unreasonably high.

“A fine, set according to the amount that the owner would supposedly receive, is more acceptable.”

It was suggested that estate agents should provide flat owners with renters’ background information.

However, this idea was turned down by Grace Chow, the chief executive officer of the Estates Agents Authority, since “it would bring excessive workload and pressure to estate agencies.”

In order to reduce the number of victims, the Hong Kong Millihouse Owners’ Club started
collecting names and identidy card numbers of “professional tenants” in 1999 and put the list online in 2001.

So far the list contains more than 50 names, but this act was suspected of breaching the Privacy Ordinance.

“The online version only reveals part of the default renters’ ID card numbers,” Mr. Shea said.

“In addition, we never disclose the full list to the public. All we do is to check whether the names of our members’ potential renters are on the list and provide information about his or her history of defaulting when requested.”

Concerning this question, the Office of the Privacy Commissioner replied that it doesn’t violate any ordinance. It is the same as winners’ identity card numbers being shown on television game shows.

“Besides,” Mr. Shea added, “the ones on the list are ruled to have failed to pay the rent by the judge, not one-sidedly by us.

“Once they repay all the owed rents, their names will be removed.”

Advice for flat owners
By Jenny Chan

Micheal Shea Hing Wan pointed out that many people wrongly think that “professional tenants” are single and unemployed.

“The truth is that professional tenants can be couples, families with children, foreigners and people with domestic helpers.”

Mr. Shea suggested several precautions for owners.

Because professional tenants lie about their jobs and workplaces, owners should first ask for offcial documents, like business registration certificates and staff cards, and call companies for confirmation.

Secondly, lenders must ensure the validity of the deposit cheque before giving keys to tenants.

Finally, lessors should be wary of people who want to rent in a hurry. Bad tenants need to find new targets within a short time after they have been ordered to move out by the court.

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