CITY POLYTECHNIC OF HONG KONG v. PENTIMONT LTD.

IN THE LANDS TRIBUNAL OF HONG KONG

LANDS TRIBUNAL APPLICATION NO. 1977/94

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DECISION

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1. This is an application for a new tenancy under Section 117(1) of Part IV of the Landlord and Tenant (Consolidation) Ordinance Cap. 7. The applicant is the tenant and the respondent is the landlord of Flat A, 19th floor, Hollywood Heights, 6 Old Peak Road, Hong Kong. The tenancy includes three covered car parking spaces. Usually only two car parking spaces are provided with each flat.

2. The tenancy was terminated by the serving of a form CR101 dated 2nd November 1993. It terminated the tenancy on 31st May 1994. The landlord did not oppose the granting of a new tenancy which was agreed to be for 2 years from 1st June 1994 on the same terms and conditions as the previous tenancy. The Prevailing Market Rent as at 31st May 1994 (the relevant date) was not agreed.

3. The applicant was represented by Mrs. Eva Ng, the Assistant General Secretary of the personel office of the City Polytechnic of Hong Kong. She gave evidence in support of a rent of $53,000 per month exclusive of rates and maintenance fees. She based her opinion on the letting of Flat B on the 5th floor of the subject building at $53,000 per month for 2 years from 5th May 1994. This flat was identical to the subject flat, but it included 5 air conditioners and the usual 2 carparking spaces. The subject flat was not supplied with air conditioners, but as stated previously had 3 carparks.

4. The respondent called Mr. Togher, a chartered surveyor with the firm, Chesterton Petty. He submitted a valuation report which determined the Prevailing Market Rent at $90,000 per month exclusive. Mr. Togher initially relied on three earlier lettings for identical flats in Hollywood Heights. However being rents agreed in 1993, he adjusted for the time lapse by between 26% and 40%. At the hearing, he submitted another comparable letting for Flat B on the 7th floor. It let at $60,000 per month in April 1994. Mr. Togher adjusted it to support his figure of $90,000. This included a 30% unsupported upward adjustment for view. Mr. Togher adjusted his comparables upwards by total adjustments as large as 46% in the case of this comparable and by 44% in the case of the letting of 5B at $53,000 which gave him a figure of $80,000 in respect of this comparable. Mr. Togher's adjustments were too high. On the best evidence, which is the letting of 7B at $60,000 per month in April 1994, the $53,000 for 5B in May '94 does appear to be too low, and together with the other evidence, slightly out of line with the market. Better located but similar flats in respect of age and level, such as one on the 15th floor of 3 Tregunter Path only realised $82,000 per month in April 1994. This is a larger flat with central air conditioning. Flat 7B at No. 1 Tregunter Path ("Century Tower") realised $60,000 per month for May '94. This flat also has central air conditioning and, although slightly smaller, is not inferior to the subject flat. These rents were made available by the Rating and Valuation Department. They are mentioned to show that Mr. Togher's adjustments are exagerated.

5. Flat 19A is superior to flat 7B, the best comparable available, but, if 7B let at $60,000 in April, I'd not expect 19A to realise more than $70,000 on 31st May 1994.

6. The added value for an extra car park is not the same as the rent for a single carpark. I set it at $2,500 per month. Accordingly I fix the prevailing market rent at $72,500 per month.

7. It is ordered that a new tenancy shall be granted for 2 years from 1st June 1994 at a rent of $72,500 per month exclusive of rates and maintenance charges.

8. The new tenancy shall otherwise be on the same terms and conditions as the previous tenancy, save that the deposit clause shall be altered to reflect the new rent.

9. There is no order as to costs.

Dated this 29th day of November 1994.