Frequently Asked Questions

Business premises specified under the Ordinance are protected. These “specified premises” include—

1. most of the scheduled premises prescribed under the Prevention and Control of Disease (Requirements and Directions) (Business and Premises) Regulation (Cap. 599F) (excluding cruise ship and supermarket);
2. food and catering business premises (including food factory, restaurant, factory canteen, siu mei and lo mei shop, fresh provision shop, cold store, composite food shop, frozen confection factory and milk factory), and premises where the dishware washing trade and the fresh food wholesale business are carried on;
3. retail shop (but excluding supermarket);
4. premises used in relation to education (including child care centre, kindergarten, private primary and secondary day school, tutorial school, premises where hobby classes are provided, premises where the business of providing catering services for schools is carried on, etc.);
5. premises where the businesses of travel agents, cruise ships, employment agencies and the laundry trade are carried on; and
6. premises where the business of organizing pop concerts is carried on and premises where a performing arts group in the arts and culture sector operates the business of the group, etc.

(Appendix 1 lists all types of “specified premises” covered under the Ordinance.)

In general, the use of premises is stated in the tenancy agreement concerned. Documents issued by relevant regulatory authorities such as certificate of registration, business registration certificate, licence, etc., might assist in ascertaining whether the leased premises are used as “specified premises”. If the leased premises are used wholly or primarily as “specified premises”, they will be protected by the Ordinance. Legal advice may be sought if landlords and tenants have disputes as to whether the leased premises are protected by the Ordinance.

To ascertain whether certain premises are “used wholly or primarily” as “specified premises”, a common sense approach should generally be adopted and it may be relevant to take into account factors such as the size of the premises designated for use as “specified premises” and the takings of the relevant business vis-à-vis that for the entire premises.

Once a written agreement in respect of any forbearance below is entered into during the “protection period” (i.e. between May and July 2022) by the landlord and tenant of any “specified premises”—

1. the amount that is to be paid as rent; or
2. the time when any rent is payable,

the Ordinance shall cease to apply in relation to the tenancy.

If a landlord and a tenant have reached an agreement in respect of the above matter before the “protection period” and both parties wish to have the new agreement not subject to the Ordinance, they may further affirm the contents of their new agreement in writing during the “protection period” to the effect that the Ordinance does not apply to the new agreement.

“Protection period” in the Ordinance means the period beginning from the commencement date of the Ordinance (i.e. 1 May 2022); and ending on the expiry of the three-month period beginning on that commencement date (i.e. 31 July 2022).

The Ordinance suspends the landlord’s right to act against the tenant of “specified premises” on the tenant’s failure to pay rent. The landlord is barred from taking, or continuing to take, the action(s) specified in section 5(7) of the Ordinance (please refer to the table below) in respect of the tenant’s failure to pay rent during the period from 1 January 2022 to the expiry of the “protection period”.

The Ordinance also provides that any action (or any part of an action) taken by the landlord in respect of the tenant’s failure to pay rent, if pending when the “protection period” begins, is to be stayed until the expiry of the “protection period”.

The actions which a landlord is barred from taking include—

1. suspending the provision of utility services or other services in relation to the premises concerned;
2. deducting from the deposit held by the landlord any amount of the rent that the tenant fails to pay;
3. if, before the beginning of the “protection period”, the landlord has already deducted from the deposit any amount in respect of the tenant’s failure to pay rent—demanding the tenant to pay any money or money’s worth to make good any shortfall in the deposit;
4. recovering interest or surcharge on the rent that the tenant fails to pay under the abovementioned circumstances;
5. terminating the tenancy;
6. exercising a right of re-entry or forfeiture;
7. bringing an action in a court (including a tribunal) against the tenant;
8. commencing any arbitral proceedings under the Arbitration Ordinance (Cap. 609) against the tenant;
9. presenting a bankruptcy petition under the Bankruptcy Ordinance (Cap. 6) against the tenant;
10. making an application under section 670 of the Companies Ordinance (Cap. 622) for a meeting of creditors to be summoned to agree to a compromise or an arrangement in relation to the tenant;
11. presenting a winding-up petition under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) against the tenant;
12. commencing or levying an execution, distress or other legal proceedings against the tenant’s property; and
13. appointing a receiver or manager over the tenant’s property.

The Ordinance specifies that a landlord can take (or continue to take) any action on a ground other than the tenant’s failure to pay the rent during the relevant period.

“Tenant” is defined under the Ordinance to include the guarantor or surety of the tenant who incurs liability on the tenant’s failure to pay the rent. As such, the landlord cannot recover the rent payable from the guarantor or surety of the tenant during the “protection period”.

The Ordinance does not differentiate among the different components of the rent payable by a tenant. The rental enforcement moratorium is applicable to the charges as included in the rent under the tenancy (e.g. rates, Government rent, management fee, etc.), but is not applicable to payments separately paid by the tenant and do not form part of the rent payable under the tenancy.

The Ordinance is applicable to a sub-tenancy and a lease/tenancy entered into orally.

Under the Ordinance, the landlord is barred from taking, or continuing to take, any specified action(s) during the “protection period” in respect of the tenant’s failure to pay the rent in compliance with the tenancy on or after 1 January 2022. The Ordinance does not prohibit a landlord from taking any action in respect of the tenant’s failure to settle the rent payable before 1 January 2022.

Under the Ordinance, a landlord could take the action(s) barred by the Ordinance in the relevant period on the earlier of the following—

1. the expiry of the “protection period” (i.e. 1 August 2022); or
2. cessation of application of the Ordinance to the tenancy under the following circumstances:
1. the tenancy is terminated on a ground other than the tenant’s failure to pay rent during the specified period;
2. the tenancy expires or otherwise comes to an end, unless the tenancy is renewed immediately afterwards either automatically or in exercise of a right of renewal; or
3. the premises are no longer used wholly or primarily as “specified premises” under the tenancy, or the “specified premises” are removed from Part 2 of the Schedule of the Ordinance.

Under the Ordinance, in respect of a security created on certain specified premises by the landlord for a secured loan, if a default in repayment of the secured loan by the landlord occurs between 1 January 2022 and the end of the “affected period”, the lender would be barred from taking, or continuing to take, certain security enforcement actions (or the action is to be stayed if pending) in respect of the loan repayment default if:

1. the tenant fails to pay the rent;
2. the landlord’s right to take any action in respect of the tenant’s failure is restricted by the Ordinance; and
3. the landlord can reasonably establish that the tenant’s failure to pay rent and the rental enforcement moratorium are the sole reason or a significant reason for the landlord’s inability to avoid the repayment default after taking into account certain factors (e.g. the nature and magnitude of the tenant’s failure to pay rent and the repayment default).

“Affected period” and “protection period” are two different concepts. The “protection period” of the Ordinance covers the period from 1 May 2022 to 31 July 2022. However, if the relevant tenancy or tenant’s failure to pay rent begins after 1 May 2022, or the protection under the Ordinance ends before 31 July 2022 by virtue of section 5(9), the “affected period” would be shorter than the “protection period”.

Lenders are barred from taking enforcement actions against the relevant landlord (including guarantor or surety of the landlord) including:

1. enforcing the security created on the subject premises (or on any interest in the subject premises or any rent receivable in respect of the subject premises);
2. suing for repayment of the amount in default;
3. recovering interest or surcharge on the amount in default;
4. letting or selling the subject premises;
5. making demand against, or suing, the landlord under any other right of recourse as a result of the repayment default triggering any contractual cross default clause; and
6. presenting a bankruptcy petition or a winding-up petition against the landlord.

The Ordinance does not prohibit lenders from taking recovery actions against relevant landlords for loan repayments that are in arrears before 1 January 2022.

A landlord who takes, or continues to take, any action(s) in contravention of the Ordinance commits an offence and is liable on conviction on indictment to a fine—

1. that is equal to twice the amount of the rent claimed, in relation to the action concerned, by the landlord to be in arrears; and
2. that is, in any event, not less than $50,000, unless the court (including a magistrate) considers that imposing a lower fine is just and equitable in the circumstances of the case.

The tenant should approach the landlord in the first instance to clarify the purpose and justifications of landlord’s action(s). The landlord concerned should stop taking such action(s) if the said action(s) is/are barred by the Ordinance. If the tenant has evidence to show that the landlord has contravened the relevant provisions of the Ordinance, he or she may lodge a complaint to the Rating and Valuation Department (“RVD”) by submitting a completed Complaint Form at Appendix 2 together with all supporting documents. Depending on the information provided by the complainant, RVD will refer the case to the Department of Justice for considering whether legal action is warranted.

If the lender is a bank, the landlord may contact the Hong Kong Monetary Authority (“HKMA”) through the dedicated email account: ppphs@hkma.gov.hk or enquiry hotline: 2878 1199. The HKMA will look into the case and take appropriate follow up action. If the lender is a licensed money lender, the landlord may contact the Companies Registry (“CR”) through the dedicated email account: mlu@cr.gov.hk or enquiry hotline: 2867 2634. The CR will look into the case and take appropriate follow up action.

Eligible corporate landlords can apply to defer the principal repayment of relevant loans by 6 months under the PPPHS. Corporate landlords should however be aware that, according to the contracting out provisions under the Ordinance, once a written agreement providing for a forbearance in respect of the repayment of a secured loan is entered into during the “protection period”, the Ordinance ceases to apply in relation to the secured loan concerned.

The HKMA has requested banks to make reference to the PPPHS and offer corresponding extension of principal repayment to individual landlords who are affected by the Ordinance. Individual landlords in need may lodge applications with their banks. For corporate landlords which are not covered by the PPPHS, the HKMA encourages banks to adopt a sympathetic attitude and identify, in consultation with the customer, a feasible solution consistent with prudent risk management principles.