Q1. What are the remedies for the sub-tenant in a regulated tenancy if the tenancy has been terminated before expiry due to the forfeiture of its head lease by the superior landlord?
If the superior landlord rightly forfeits the head lease agreement upon such breach, it may have the effect of destroying any sub-lease created out of it.
Where the head lease is forfeited, a sub-tenant can apply for “relief against forfeiture” from the Court of First Instance under section 58(4) of Conveyancing and Property Ordinance (Cap. 219) for a ‘vesting order’ for the subdivided unit occupied by the sub-tenant. The order vests the remaining term (or any less term) of the head lease to the sub-tenant with conditions that may be imposed by the Court (e.g., payment of rent) (see “Subletting”).
Alternatively, the sub-tenant may need to vacate the premises and bring an action against the sub-landlord granting such sub-lease for relief against the breach of the sub-lease.