Variation of lease: did the other lease terms remain in effect?

Ho Kin Pong v Tam Kok Hung ([2012] HKEC 948 (District Court)) concerned a two year lease of a flat. The lease contained a right for either party to terminate the lease after one year. The parties then negotiated a rent reduction. Later, the landlord wanted to sell the property with vacant possession and served a notice to terminate the lease. The landlord had entered into a sale agreement. The tenant alleged that when the rent reduction had been agreed there had been a further agreement that the right to terminate would not be invoked. She refused to leave. The court found as a matter of fact that there had been no agreement to give up the break right. As a consequence of the tenant’s refusal to leave, the landlord’s sale had fallen through and he had been ordered to pay damages to the buyer. These damages and the costs of the buyer’s action were the result of the tenant’s breach and she was liable to compensate the landlord accordingly.

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