Managing a leased real estate
Restrictions on use
Lessees must abide by the user restrictions under the Government lease and any subsequent lease modifications. They are also restricted by the Occupation Permit for the building and the Deed of Mutual Covenant. Lessees must also abide by the laws and regulations relating to the permitted use of the premises, such as those in the Town Planning Ordinance and Outline Zoning Plans.
Leases typically limit the extent of or prohibit alterations or improvements of property. Structural repairs that involve alteration of the building's form and framework are usually not allowed. The lessor's consent should be sought when undertaking non-structural alterations.
In the majority of cases, leases set out a fixed amount of rent payable, or a mechanism to calculate the rent payable, for the entire duration or at different stages of the lease term.
Taxes for rental
Stamp duty is payable on the tenancy agreement or lease. The amount depends on the level of rent, the term of the lease and the length of the rent-free period granted (if any). Typically, both the lessor and lessee share the stamp duty payable equally.