Landlord Legal Pitfalls: Tenant Issues Explained

When you rent out your unit and the tenant causes trouble within the estate, will the Owners' Corporation pursue the tenant or directly send a lawyer's letter to the owner?

Below, we break down the 3 most common legal pitfalls of renting out property.

If a tenant keeps a dog or causes noise disturbance, can the Owners' Corporation "register a charge" against the owner?

The Deed of Mutual Covenant for many estates typically states:

• No pets allowed
• No noise or nuisance

If a tenant violates these rules, how does the management office usually handle it?

The Owners' Corporation pursues the owner, not the tenant

Legally, the person bound by the Deed of Mutual Covenant is the owner themselves, not the tenant. The tenant is not a direct party to the covenant.

Therefore, the Owners' Corporation has the right to issue the following to the owner on the grounds that they failed to ensure the unit's occupant complies with the covenant:

• Warning letters
• Lawyer's letters
• Apply to the court for an injunction

All resulting legal costs will ultimately be charged to the unit's management fee account. In severe cases, it can lead to the unit being registered with outstanding debts (commonly known as "registering a charge").

Practical self-protection methods for owners

The tenancy agreement must clearly state:

• The tenant must comply with the Deed of Mutual Covenant
• Fines or legal fees due to violations can be deducted from the deposit
• Serious violations may lead to early termination of the tenancy

This transfers the legal risk from the owner back to the tenant.

If a unit leaks and damages the floor below, is it the responsibility of the Owners' Corporation or the owner?

"Leakage" is one of the most common and expensive sources of building disputes.

The key to responsibility lies in whether it's a "common" or "private" part

If the source of the leak comes from:

• The external wall
• Common main pipes
• Common areas

These are common parts, and the repair responsibility generally falls on the Owners' Corporation.

But if the source is from:

• Branch pipes within the unit
• Aging waterproofing layers
• The tenant forgetting to turn off a tap

Then it's a private part, and the legal responsibility lies with the owner.

The lower-floor owner can pursue civil remedies:

• Claim for renovation costs
• Recover losses

The Owners' Corporation will also not bear any repair costs for private parts.

Practical self-protection methods for owners

Before renting out, you should:

• Inspect the unit's pipes and waterproofing layers
• Purchase insurance

Such insurance typically covers:

• Third-party liability due to tenant negligence
• Leakage claim risks

This can transfer potential compensation risks of hundreds of thousands to the insurance company.

If the tenancy agreement states "tenant pays management fees," does the owner still bear responsibility for arrears?

Some owners specify in the tenancy agreement that management fees are to be paid by the tenant themselves, but what happens if the tenant defaults and then disappears after moving out?

The Owners' Corporation only recognizes the owner, not the tenancy agreement

According to the Building Management Ordinance, paying management fees to the Owners' Corporation is a statutory responsibility of the owner.

Even if the tenancy agreement states the tenant is responsible:

• The Owners' Corporation will still pursue the owner
• Arrears, along with interest and legal fees, will be recovered
• Arrears can be registered at the Land Registry

Leading to:

• Difficulty selling the unit
• Impact on mortgages
• Increased legal costs

Practical self-protection methods for owners

The safest approach is: "Rent includes management fees"

Where the owner:

• Sets up an autopay to pay the management office
• Reflects the management fee cost within the rent

Ensuring the property is not subject to legal action due to unpaid fees.

Conclusion

Carefully selecting tenants and clearly drafting tenancy agreement terms are the owner's most effective legal shields.

FAQ

Q1: If a tenant violates the covenant, can the Owners' Corporation directly sue the tenant?

A: The Owners' Corporation primarily holds the owner accountable because the owner is the party to the Deed of Mutual Covenant.

Q2: If a tenant keeps a dog, can the owner terminate the tenancy immediately?

A: It depends on whether the tenancy agreement specifies that violating the covenant is grounds for termination.

Q3: If a tenant defaults on management fees, can the owner refuse to pay?

A: No, management fees are a statutory responsibility of the owner.

Q4: Is the owner always liable for leakage?

A: If the leakage is from a private part, it's generally the owner's responsibility; if from a common part, it's handled by the Owners' Corporation.