Who Pays for What? Understanding Landlord and Tenant Obligations in Hong Kong

Consider a tenant who discovers a ceiling leak and an inoperative air conditioning unit. The landlord, though admitting liability, neglects to repair the conditions. Aggrieved, the tenant elects to unilaterally terminate the occupancy, suspend rent payments, and apply the security deposit to the balance of the lease term.

This scene plays out across Hong Kong every day. Disputes over repair responsibilities are among the most common sources of friction between landlords and tenants. The confusion is understandable. The law does not always give a clear answer. Much depends on what the tenancy agreement says — and what it does not say.

The starting point: the tenancy agreement

The obligation to repair or maintain a property is primarily a matter of private contract. This means the tenancy agreement is the first place to look. If the agreement clearly states who is responsible for what, that usually decides the matter.

However, many standard form tenancy agreements in Hong Kong are silent on repair responsibilities. They may give the landlord a right to enter the property to carry out repairs, but this right does not impose a duty on the landlord to actually perform those repairs. In Leung Wai Ling Isewesg v Success Base Engineering Ltd [2021] HKCA 310, the Court of Appeal made clear that a clause granting the landlord a right of access for repairs does not necessarily imply a duty to repair.

The general rule of thumb

Despite the absence of a general legal duty to repair, a commonly adopted approach in practice is that the landlord is responsible for external and structural repairs, while the tenant is responsible for internal and non-structural matters.

Landlord's typical responsibilities:

Common areas and shared facilities

Drains, pipes and electrical wiring serving the premises

Windows of the premises

Structural elements such as ceilings and load-bearing walls

Tenant's typical responsibilities:

Internal decoration and finishes

Keeping the interior of the premises in good condition

Reporting defects to the landlord promptly

These are general guidelines only. The specific terms of the tenancy agreement always take precedence.

What is "fair wear and tear"?

One of the most important concepts in landlord-tenant law is fair wear and tear. This refers to the deterioration that occurs through normal, reasonable use of the property over time.

In Wong Kong Lee v Kung Cheung Fai Patrick DCCJ 5693/200, reaffirmed in Wong Hon Kam Henry v Tak Yi Investment Ltd (DCCJ 345/2015), the District Court confirmed that fair wear and tear means damage that appears under reasonable use or from the ordinary effects of natural forces. Examples include:

Paint fading or yellowing from sunlight

Minor scuff marks on floors from normal foot traffic

Carpets becoming worn in high-traffic areas

Natural aging of fixtures and fittings

The tenant is generally not responsible for fair wear and tear. The landlord must accept that the property will show some signs of use over the course of a tenancy.

The picture changes when damage is caused by the tenant's improper use or negligence. If the tenant damages the property through carelessness, misuse or deliberate action, the tenant is responsible for the cost of repair.

Common examples of tenant-caused damage include:

Scratches, dents or holes in walls from moving furniture

Broken windows or doors

Stains or burns on carpets or worktops

Damage to appliances from improper use

Blocked drains from failing to clear hair or debris

The distinction between fair wear and tear and tenant-caused damage is not always straightforward. In Wong Hon Kam Henry v Tak Yi Investment Ltd, the landlord claimed the tenant had damaged the air conditioner, refrigerator, kitchen worktop and bathroom basin. The Court examined each item individually, considering whether the damage resulted from natural aging or from the tenant's use. The case illustrates how fact-specific these disputes can be.

Statutory obligations

The Landlord and Tenant (Consolidation) Ordinance (Cap. 7) imposes certain obligations on landlords. Under Schedule 7 of the Ordinance, which applies to subdivided units, the landlord has mandatory obligations to:

Maintain and keep in repair the drains, pipes and electrical wiring serving the premises exclusively

Maintain and keep in repair the windows of the premises

Keep in proper working order the fixtures and fittings provided by the landlord in the premises

The landlord must carry out these repairs as soon as practicable after receiving notice from the tenant. If the landlord fails to do so, the tenant may terminate the tenancy by giving not less than 30 days' prior written notice.

Beyond these specific obligations, the landlord may also have duties under other legislation, for instance, the Buildings Ordinance (Cap. 123) empowers the Building Authority to require owners to remedy structural defects and the Public Health and Municipal Services Ordinance (Cap. 132) allows public officers to require owners or occupiers to address nuisances affecting health.

The rental deposit: a common misunderstanding

Many tenants believe they can simply stop paying rent near the end of a tenancy and let the landlord deduct the outstanding amount from the rental deposit. This is a misconception.

The rental deposit serves a specific purpose. It is security held by the landlord to ensure that the tenant performs all obligations under the tenancy agreement. The deposit is not a prepayment of rent. Under the Ordinance, the landlord may deduct from the deposit any outstanding rent or any costs, expenses, losses or damages suffered by the landlord because the tenant has breached the tenancy.

However, the landlord is entitled to deduct from the deposit only after the tenant has failed to pay rent or caused damage. The tenant cannot unilaterally decide to use the deposit to cover rent.

In Re New Castle Investments Ltd [2020] HKCA 931, the Court of Appeal considered a tenancy agreement with a clause that purported to reduce the deposit by the amount of rent in arrears. The Court held that such a clause did not give rise to an automatic set-off or extinguishment of the tenant's liability to pay rent. The deposit remained the landlord's money, held as security, and the tenant remained liable to pay rent as it fell due.

In Leung Wai Ling Isewesg v Success Base Engineering Ltd [2021] HKCA 310, the Court of Appeal further clarified that the forfeiture of a rental deposit and the payment of outstanding rent serve different purposes. The deposit is to cover loss due to premature termination, while rent is the payment for the use of the property. A tenant cannot argue that the landlord should not receive both the deposit and the outstanding rent.

At Jal N. Karbhari, our qualified lawyers are ready to assist with any dispute arising from a tenancy agreement.

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