Breaking a Hong Kong Lease Early: Can the Landlord Keep the Whole Deposit?

Moving out early is rarely part of the plan. Maybe it's a job relocation, a family matter, or simply a flat you can no longer stay in. You call the landlord, and the answer comes back flat: "the whole deposit is forfeited, no exceptions." Something about that feels off, even if you can't quite say why.

This article is about exactly that situation: a deposit forfeited because a tenancy was ended early, not the more commonly discussed scenario of a failed property purchase deposit. Both get called "殺訂" in casual conversation, but the legal principles behind them are entirely different — conflating the two will send you looking in the wrong place.

What Kind of "Forfeited Deposit" This Article Covers

A Hong Kong residential tenancy is typically split into two stretches: a fixed term (死約), during which neither side can generally end it unilaterally, followed — if the agreement provides for it — by a periodic term (生約), which either side can end with the agreed notice. The Rating and Valuation Department's own guidance confirms this structure: a fixed-term tenancy ends upon expiry of its term, while a periodic tenancy (e.g. a yearly one) is determined by notice.

This article assumes you're still inside the fixed term and want to leave — the scenario behind almost every "landlord kept the whole deposit" dispute of this kind.

Ending a Fixed-Term Tenancy Early: Is That a Breach?

Start with the legal principle. Per the Community Legal Information Centre (CLIC), in general, neither landlord nor tenant may terminate a tenancy before its expiry unless a vital term is breached — or the tenancy contains a break clause allowing either party to terminate early by notice.

In plain terms: if your tenancy has no break clause, leaving early is, as a matter of law, a breach. That's simply true, and there's no point pretending otherwise. But "this is a breach" and "the landlord may therefore keep the entire deposit" are two separate claims — and conflating them is a mistake landlords (and plenty of tenants) make constantly.

One common point of confusion is worth clearing up directly: since 2022, regulated tenancies of subdivided units (Part IVA of the Landlord and Tenant (Consolidation) Ordinance) give a tenant a statutory right to terminate with not less than 30 days' written notice, provided the termination date isn't earlier than the end of the first year. That's a real, meaningful protection — but it applies only to regulated subdivided-unit tenancies, not to ordinary private tenancies. If your flat isn't a regulated subdivided unit, this statutory exit doesn't apply to you, and everything comes down to what your own tenancy agreement actually says.

Can a Landlord Just Keep the Whole Deposit?

This is where it actually matters. You did breach a fixed-term tenancy — but can the landlord, without doing any accounting at all, simply declare the entire deposit forfeited?

Not necessarily. A deposit's legal role is generally to secure the landlord's actual loss from your breach — not to function as a standalone punishment. A clause requiring payment of a specific sum on breach (such as the full deposit) has, under common law, traditionally had to pass a test: is the figure a genuine, agreed estimate of loss, or is it a penalty wholly disproportionate to the real loss?

That test has been refined in more recent years. The UK Supreme Court's decision in Cavendish Square Holding BV v Makdessi set out a newer standard: the question is no longer simply "was this a genuine pre-estimate of loss", but whether the clause imposes a detriment on the party in breach that is out of all proportion to the innocent party's legitimate interest. The Law Society of Hong Kong's own journal has discussed this standard as one that may find favour with Hong Kong courts in future — meaning this isn't necessarily settled Hong Kong law yet, but the direction of travel is clear. A clause that exists purely to intimidate, with an amount entirely detached from any real loss, is increasingly hard to defend on the strength of "it's written in the contract" alone.

What does that mean in practice? If a landlord says "the whole deposit is my loss from you leaving", they should, in principle, be able to produce something behind that number — how long the unit sat empty, what re-letting actually cost, how much rent was genuinely lost. "The clause says forfeit" with nothing else behind it is a genuinely weak position.

A Landlord Has to Try to Re-Let, Not Just Sit on Your Money

This point surprises a lot of landlords and tenants alike, but the logic is simple: a landlord can't just leave the unit empty for the rest of the fixed term and then bill you for every month of "lost rent" along the way. This comes from a basic principle of damages law — a party suffering a loss has a duty to take reasonable steps to mitigate that loss, rather than letting it accumulate and claiming the full amount from the other side.

In practice, what does that mean for you? If the landlord is claiming you owe "rent for the rest of the fixed term", you can ask, in writing, for real evidence: when the unit was re-let after you left, to whom (no need for the new tenant's personal details, but real evidence of the listing date and new rent), and whether they actively marketed it (an agency listing record, for example). If the landlord keeps insisting the unit is "still empty" with nothing to back that up, that claim itself is worth challenging directly in your demand letter — and later, if it comes to that, in your statement of claim.

It's worth reading our case study The Landlord Claimed Damage and Kept Two Months' Deposit — HK$22,200 Recovered at this point — while that illustrative case involved a wear-and-tear dispute rather than an early-termination forfeiture, the underlying logic is the same: a landlord claiming a loss doesn't automatically mean they can prove one. If you'd like to see how deposit disputes play out across different scenarios, see our deposit dispute case notes.

How to Push Back Toward a Reasonable Figure

Once you understand the principles, here's how to apply them practically:

1. Get the deduction and its basis in writing. Don't leave it as a verbal argument — ask the landlord, over WhatsApp or email, to state clearly what they're claiming and how they calculated it.
2. Ask for real evidence. Re-letting dates, agency listing records, and (where the landlord is willing to share it) the new rent level.
3. Check the clause's actual wording. Does your tenancy say "the deposit is forfeited" outright, or does it say the landlord may claim "actual loss suffered as a result"? Those two phrasings can carry very different legal weight.
4. Offer a counter-figure with your own workings. If you genuinely owe something reasonable — say, one or two months of the landlord's actual void period — proposing a costed figure yourself is often faster than an all-or-nothing standoff.

What the landlord says	How you can respond
"The clause says forfeit — non-negotiable"	Ask them to connect that figure to their actual loss, with supporting workings
"The unit is still sitting empty"	Ask for real evidence of listing and marketing efforts, with dates
"I need to renovate before I can re-let because you left"	Whether that renovation is genuinely caused by your early exit is worth examining item by item

Recovery Steps: From a Written Demand to Filing at the Tribunal

If, after you've worked through the landlord's reasoning point by point, they still refuse to produce any basis and insist on keeping everything, it's time for formal recovery steps.

A formal demand letter that clearly sets out the disputed deduction, the deposit amount, and a deadline for repayment is often enough on its own — most landlords would rather not go all the way to a Tribunal hearing either. If the landlord goes silent or clearly refuses to return any amount, you can proceed to file at the Small Claims Tribunal. Deposit disputes of HK$75,000 or below fall within its jurisdiction, filing fees run from HK$20 to HK$120, and no lawyer is required; for how to fill in the forms and avoid the most common mistakes, see our guide to writing a statement of claim.

If your situation is actually about the landlord claiming the unit has wear and tear (rather than an early-termination forfeiture), see our separate guide: Fair Wear and Tear or Real Damage? Deposit Deduction Disputes in Hong Kong — that's a different kind of deduction dispute. And if you'd rather not work through the forms and procedure yourself, our filing assistance service sets out what's covered and roughly what it costs.