TRHK7
Hi. I just want to know what options are available to tenants when there's a dispute with the landlord about the return of the deposit at the end of the tenancy? If he wants to keep some of it because of a 'stain' or 'scratch' on the floor. Can this be arbitrated somehow? Thanks!
28.10.2014
Jody H Lenderman
Hello,
 
I hope you are doing well and thanks for submitting your question.
 
While in theory this should be a straightforward question, the tenant would need to reference the original Tenancy Agreement for a definitive answer.  The industry norm in Hong Kong would be that the property needs to be handed back in the same condition as the start of the tenancy, except for fair wear and tear.  When taking possession of the property initially (i.e. on the Handover Date), it is advised to go through the apartment to document the state of the interior of the property.  Any defects, such as stains and scratches, should be noted and ideally photographed at this time.  While not common in Hong Kong, agencies like OKAY.com will take photos to document the property and identify defects on the possession date.  This document is then provided to both the tenant and the landlord to try to avoid issues like this when handing the property back to the landlord at the end of the tenancy.
 
If the stains and scratches happened during the tenancy, the landlord could hold the tenant liable to reinstate the property to the original condition as outlined in the Tenancy Agreement, subject to the extent of the stains and scratches.  Minor stains or scratches will generally be considered as within the "fair wear and tear" clause in the tenancy, and shouldn't lead to any deduction of the security deposit.  Of course, there can always be a discussion of what is fair wear and tear, but if the tenant and the landlord cannot agree, they could always use small claims court (or regular court, depending upon the disputed amount) to get a definitive answer.  Going to court for this type of issue does not happen regularly and most of these types of cases are settled by discussion between the two parties.  
 
A pre-inspection of the property is recommended one to two weeks before actually handing the property back to the landlord to identify any potential issues.  This would give the tenant a few weeks to reinstate the items, or get a contractor to provide a quotation on how much it would cost to reinstate the items.  Then, the tenant would try to negotiate with the landlord to either repair the items or have the estimated cost deducted from the security deposit.  Most tenancy agreements will stipulate how long the landlord has to refund the security deposit, but will also state that any disputes such as this need to be settled before that time frame starts.
 
So, to be proactive and try to retain some control over the situation, tenants would ideally have the original handover document, meet with the landlord before moving out, and actively manage the negotiation on how much the works would cost to reinstate.  Otherwise, the tenant would only be relying on the landlord to set an amount and that amount would ultimately be deducted from the security deposit as outlined in the Tenancy Agreement.
 
Thanks, and please feel free to contact me via my OKAY.com website or on 2102 0818 if you'd like to review the specifics of your situation, or if you have any questions or concerns.
 
Jody.
 
29.10.2014
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