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Domestic Tenancies to which Part IV of the Landlord and Tenant (Consolidation) Ordinance (“the Ordinance”) applies

1. How may a domestic tenancy be terminated?

A domestic tenancy may be terminated in accordance with the terms of the tenancy or as agreed between the parties.

In the absence of a contractual arrangement for serving notice of termination or mutual agreement, the following common law principle will generally apply:

  1. a fixed term tenancy will end upon expiry of its term;
  2. in respect of a periodic tenancy, a yearly tenancy can be determined by at least a half-year’s notice, expiring at the end of a year of the tenancy while shorter tenancies (e.g. monthly tenancies and weekly tenancies) can be determined by a full period of notice expiring at the end of a period.

2. According to Part IV of the Ordinance, landlord shall, within one month from the date on which he and his tenant entered into or renewed a domestic tenancy, lodge with the Commissioner of Rating and Valuation (“Commissioner”) a Notice of New Letting or Renewal Agreement (Form CR109) for endorsement. What are the consequences if the landlord fails to do so?

According to Part IV of the Ordinance, a landlord shall, within one month from the date on which he and his tenant entered into or renewed a domestic tenancy, lodge with the Commissioner a Form CR109 for endorsement. If this requirement is not complied with, a fee of HK$310 will be payable. Please note that the landlord shall not be entitled to maintain an action to recover the rent under the relevant tenancy agreement unless the Commissioner has endorsed the Form CR109. Under the Ordinance, “landlord includes any person, other than the Government, who is, from time to time, entitled to receive rent in respect of any premises and, in relation to a particular tenant, means the person entitled to receive rent from that tenant”.

3. Are there any statutory grounds for a landlord to forfeit a domestic tenancy?

In the absence of a relevant condition in the tenancy agreement, Part IV of the Ordinance provides that a landlord may forfeit a domestic tenancy for the following acts by the tenant:

  1. non-payment of rent within 15 days of the due date;
  2. use of the premises for immoral or illegal purposes;
  3. unnecessary annoyance, inconvenience or disturbance including persistent delay in payment of rent; and
  4. structural alteration to the premises without the landlord's consent.

4. How can a landlord or a tenant determine as to whether or not a tenancy is domestic?

Any party to a tenancy may apply to the Commissioner for a certificate as to the primary user of the premises at a fee of HK$3,850. The certificate shall, for all purposes, be prima facie evidence of the facts set out in the certificate as to the primary user of the premises; and of the primary user of the premises on the day when they were inspected.

Under Part IV of the Ordinance, a person to any tenancy may apply to the Lands Tribunal to determine whether or not a tenancy is domestic and the Lands Tribunal may determine that question for the purposes of Part IV of the Ordinance.



Regulated Tenancies to which Part IVA of the Ordinance applies

bullet  Scope

5. What is a subdivided unit under Part IVA of the Landlord and Tenant (Consolidation) Ordinance (“Ordinance”)? What types of subdivided units are regulated?

A “subdivided unit” means premises that form part of a unit of a building. In general, the scope of regulation covers subdivided units of domestic, industrial and commercial buildings, and different types of subdivided units (including cubicles, bedspaces, space capsules, lofts, cage homes, rooftop houses and podium houses, etc.). However, it does not cover “squatters” or “New Territories Exempted Houses”.

6. What is a “regulated tenancy”?

A tenancy which fulfills all of the following conditions is a “regulated tenancy” under Part IVA of the Ordinance –

  1. the tenancy commences on or after 22 January 2022;
  2. the tenancy is a domestic tenancy;
  3. the subject premises of the tenancy are a subdivided unit;
  4. the tenant is a natural person;
  5. the purpose of the tenancy is for the tenant’s own dwelling; and
  6. the tenancy is not one specified in Schedule 6 to the Ordinance, i.e. the tenancy is not an excluded tenancy (see Q8 below).

7. What does “unit” mean under Part IVA of the Ordinance?

Under Part IVA of the Ordinance, “unit”, in relation to a building, means premises of the building falling within either or both of the following descriptions –

  1. premises that are demarcated or shown as a separate unit (however described) in the building plan of the building;
  2. premises that are referred to in the deed of mutual covenant of the building as a unit (however described), and the owner of which is entitled to its exclusive possession, as opposed to the owners or occupiers of other parts of the building.

(see Q47 and Q48 below on access to building plan and deed of mutual covenant)

8. I am the owner of a residential unit with three bedrooms and I am living in one of them. If I rent out one or both of the remaining bedrooms, will the relevant tenancy/tenancies be regulated under Part IVA of the Ordinance? How about tenancies of premises rented out under the Hong Kong Housing Society’s “Letting Scheme for Subsidised Sale Developments with Premium Unpaid”?

Tenancies specified in Schedule 6 to the Ordinance are excluded from the application of Part IVA of the Ordinance. Such tenancies include –

  1. A tenancy of which the landlord is the employer and the tenant is the employee in possession of the premises in accordance with the terms and conditions of the tenant’s employment, being terms and conditions requiring the tenant to vacate the premises on ceasing to be so employed;
  2. A tenancy –
    1. that is not a sub-tenancy;
    2. the subject premises of which are demarcated as a bedroom in a unit of a building in the latest building plan of the building, which is the latest building plan approved by the Building Authority under the Buildings Ordinance (Cap. 123) as at the date on which the occupation permit in relation to the building is issued; and
    3. the landlord of which is a natural person and residing in the unit at the commencement of the tenancy;
  3. A tenancy of premises under the Hong Kong Housing Society’s “Letting Scheme for Subsidised Sale Developments with Premium Unpaid”.

So if the relevant tenancies of the premises being rented out satisfy (1), (2) or (3) of the above, they are excluded from regulation under Part IVA of the Ordinance.

9. I am a tenant of a subdivided unit and have entered into oral tenancy with my landlord. Is oral tenancy regulated by Part IVA of the Ordinance? If I wish to enter into a written tenancy agreement with the landlord, what should I do?

If an oral tenancy fulfills all of the conditions for a “regulated tenancy” under Part IVA of the Ordinance (see Q6 above), the oral tenancy of the subdivided unit is also regulated under Part IVA of the Ordinance. The statutory requirements and mandatory terms are to be implied into the oral tenancy of the subdivided unit.

If the landlord and tenant of a subdivided unit have entered into a tenancy orally for a first term tenancy and the first term tenancy has commenced, the tenant may in writing demand the landlord to, within 30 days, serve on the tenant a written tenancy agreement reflecting the contents of the oral tenancy. If the landlord fails to do so, the tenant may elect either (a) to withhold the payment of rent until the landlord has done so; or (b) to terminate the tenancy by within, 7 days after the specified period of 30 days mentioned above, giving the landlord not less than 30 days’ prior notice in writing of the termination.

10. If the written tenancy agreement of a subdivided unit in an industrial building states that the subdivided unit is for industrial and/or warehouse use but the tenant uses the subdivided unit for his own dwelling, is the relevant tenancy a “regulated tenancy”?

In general, the scope of regulation of Part IVA of the Ordinance covers subdivided units in residential, industrial and commercial buildings. If a tenancy of the subdivided unit fulfills all of the conditions for a “regulated tenancy” under Part IVA of the Ordinance (see Q6 above), including the tenancy commences on or after 22 January 2022; and the tenancy is a domestic tenancy, etc., the tenancy is a “regulated tenancy” and is regulated by the relevant legislation.

In case of a dispute, the landlord and tenant concerned may apply to the Lands Tribunal to determine whether or not the tenancy for the premises is a “regulated tenancy” for the purposes of Part IVA of the Ordinance. For information on the court’s application procedures and fees etc., please visit the webpage of the Judiciary or contact the Lands Tribunal (webpage: www.judiciary.hk/en/court_services_facilities/landsf.html; address: 38 Gascoigne Road, Jordan; and telephone number: 2771 3034).

11. If one of the floors of a “New Territories Exempted House” is subdivided into several subdivided units which are let to different tenants, are these tenancies regulated by Part IVA of the Ordinance?

As stated in Q5 above, “subdivided unit” under Part IVA of the Ordinance does not cover “New Territories Exempted Houses” because “subdivided unit” means premises that form part of a unit of a building; and that “building” means a building or structure constructed or adapted for use in accordance with a building plan. Under Part IVA of the Ordinance, “building plan” means a plan (a) approved by the Building Authority under the Buildings Ordinance (Cap.123); or (b) prepared by the Hong Kong Housing Authority in relation to a building to which the Buildings Ordinance does not apply under section 18(2) of the Housing Ordinance (Cap 283). As “New Territories Exempted Houses” are not covered under the approved building plan, the scope of regulation under Part IVA of the Ordinance does not cover “New Territories Exempted Houses”.


bullet  Template for tenancy agreement

12. Is there a template of tenancy agreement for a “regulated tenancy” that a landlord or tenant may make reference to?

A Template for Tenancy Agreement for a Regulated Tenancy to which Part IVA of the Ordinance applies (“template”) has been prepared by the Government for general reference purpose and can be downloaded from the webpage of the Rating and Valuation Department (“RVD”). The landlord and tenant of a “regulated tenancy” may use and adapt the template with such modifications as appropriate (except mandatory terms) to suit their own circumstances. They are reminded to take note of the requirements applicable to a “regulated tenancy” as set out in Part IVA of the Ordinance and ensure that the requirements are complied with. If they have doubts about how the provisions in the template are to be applied or interpreted in their cases, they should consult their legal advisors or other professionals as appropriate.

13. Can a landlord include additional requirements or provisions other than those under Part IVA of the Ordinance in a tenancy agreement? If these additional requirements or provisions are in conflict or inconsistent with the provisions of Part IVA of the Ordinance, are they still valid?

According to Part IVA of the Ordinance, the mandatory terms are to be impliedly incorporated into every “regulated tenancy”. The mandatory terms bind the landlord and tenant of the tenancy. The landlord and tenant of a “regulated tenancy” may negotiate to include other requirements or provisions in the tenancy agreement. However, if such other requirements or provisions are in conflict or inconsistent with the mandatory terms, the mandatory terms shall prevail.

14. Is it an offence if the landlord and tenant of a “regulated tenancy” do not use the template for tenancy agreement for a “regulated tenancy” (“template”) prepared by the Housing Bureau to enter into a tenancy?

No. The template is for general reference only. The landlord and tenant of a “regulated tenancy” may use and adapt the template with modifications as appropriate, or enter into a tenancy agreement on their own terms, as long as there is no conflict or inconsistency with the mandatory terms of a “regulated tenancy”.


bullet  Requirements under a “regulated tenancy”

15. What does it mean by “regulated cycle”, “first term tenancy” and “second term tenancy”?

Pursuant to Part IVA of the Ordinance, a regulated cycle of tenancies for a subdivided unit is to comprise 2 consecutive “regulated tenancies” (i.e. first term tenancy and second term tenancy) for the subdivided unit and each “regulated tenancy” is for a term of 2 years.

First term tenancy means the first regulated tenancy of the regulated cycle for a term of 2 years. Second term tenancy means the second regulated tenancy of the regulated cycle, commencing on the date immediately after the expiry of the first term tenancy for a term of 2 years as well. Please refer to Q25-43 below or visit the dedicated page of Second Term Tenancy for more details.

16. It is noted that each “regulated tenancy” is for a term of 2 years, and a regulated cycle of tenancies for a subdivided unit is to comprise 2 consecutive “regulated tenancies” (i.e. first term tenancy and second term tenancy) for the subdivided unit. Can the landlord and tenant of a subdivided unit enter into a tenancy for a term other than of 2 years (e.g. 3 years) with mutual agreement?

No. Even if a tenancy purports to be a tenancy for a term other than 2 years, the term of the tenancy is taken to be 2 years under Part IVA of the Ordinance. A tenant of a first term tenancy for a subdivided unit is entitled to be granted a second term tenancy of the regulated cycle, thus enjoying a total of 4 years (first term of 2 years plus second term of 2 years) of security of tenure.

17. It is noted that the landlord must, within 60 days after the term of a “regulated tenancy” (including a first term tenancy and a second term tenancy) commences, submit a completed Notice of Tenancy (Form AR2) to the Commissioner of Rating and Valuation. What are the consequences if the landlord fails to do so?

If the landlord, without reasonable excuse, refuses or neglects to comply with this requirement, the landlord commits an offence and is liable on conviction to a fine at level 3 (HK$10,000), and in the case of a continuing offence, to a further fine of HK$200 for each day during which the offence continues.

18. I am a tenant of “regulated tenancy”. How do I know whether the landlord had submitted a completed Notice of Tenancy (Form AR2) to the Commissioner of Rating and Valuation?

The Rating and Valuation Department’s (“RVD”) website provides Form AR3 to facilitate tenants of “regulated tenancy” who have not received a copy of the endorsed Form AR2 to submit basic particulars of the tenancy using the “Electronic Submission of Forms” service provided at the RVD’s website, or downloading the form from the RVD’s website and then submitting the form to RVD by email, post, fax or personal service to enquire about whether the relevant Form AR2 had been received.

19. I am a tenant of a “regulated tenancy” and I have applied for public rental housing (PRH). If I am allocated with a PRH unit within the first 12 months of the tenancy, can the tenancy be terminated early?

Under Part IVA of the Ordinance, a tenant of a “regulated tenancy” may, by giving the landlord not less than 30 days’ prior notice in writing, terminate the tenancy. However, the date of termination must not be a date earlier than the last day of the first year of the term.

If there is no other provision in the tenancy agreement that the tenant may determine the tenancy during its term other than that provided in the Ordinance, the tenant is subject to the restriction that the date of termination of the tenancy cannot be earlier than the last day of the first year of the first term tenancy or the second term tenancy. Nonetheless, Part IVA of the Ordinance does not prohibit a tenant of a “regulated tenancy” from surrendering the tenancy to the landlord before the expiry of the term if both parties can reach a consensus. In the present case, you may negotiate with the landlord on early termination of the tenancy, but the landlord is not obligated to accept your request.

If a tenant foresees that he/she may need to terminate a “regulated tenancy” early under certain circumstances, he/she may wish to negotiate with the landlord to secure such a right for early termination in the tenancy before entering into the first term tenancy. Part IVA of the Ordinance does not limit any rights of the tenant (and the tenant only) to terminate the tenancy by notice under the tenancy.

20. Under Part IVA of the Ordinance, the landlord has the obligations to maintain and repair the subdivided unit. What are the consequences if the landlord fails to fulfil such obligations?

Under Part IVA of the Ordinance, the landlord must maintain and keep in repair the drains, pipes and electrical wiring serving the premises exclusively; and windows of the premises. In addition, the landlord must keep in proper working order the fixtures and fittings provided by the landlord in the premises. On receiving a notice from the tenant for repair of an item mentioned above, the landlord must carry out the repair as soon as practicable. If the landlord fails to fulfil any of his obligations, the tenant, may, by giving the landlord not less than 30 days’ prior notice in writing, terminate the tenancy. Alternatively, the tenant may first carry out the repairs where practicable, and claim the landlord for the repair costs. If needed, the tenant may take legal actions (e.g. the small claims tribunal deals with monetary claims not exceeding HK$75,000).

21. What is the arrangement upon expiry of a regulated cycle of tenancies for a subdivided unit?

A “regulated tenancy” will come to an end upon expiry of a regulated cycle of 4 years. The landlord and tenant may, with mutual agreement, enter into a new tenancy with a new regulated cycle of 4 years at a rent agreed by both parties

22. When should the landlord of a “regulated tenancy” return to the tenant the rental deposit paid by the tenant?

The landlord of a “regulated tenancy” must return the rental deposit to the tenant, free of interest, no later than—

  1. if—
    1. the term is a first term followed by a second term—the expiry of the term; or
    2. the term is a second term, or a first term not followed by a second term—the expiry of 7 days after the tenant’s delivery of vacant possession of the subdivided unit to the landlord on—
      1. the expiry of the term; or
      2. an early termination of the tenancy; or
  2. the expiry of 7 days after the settlement of any outstanding money payable by the tenant to the landlord under the tenancy,

whichever is the later.

The landlord may deduct from the rental deposit the amount of any arrears of rent, or costs, expenses, losses or damages sustained by the landlord as a result of any breach of the tenancy by the tenant.

23. Can a landlord submit the Notice of Tenancy (Form AR2) to the Rating and Valuation Department (“RVD”) before the term of the “regulated tenancy” commences?

Pursuant to section 120AAZT(2) of the Ordinance, the landlord of a “regulated tenancy” must, within 60 days after the term of the tenancy commences or is taken to commence under Part IVA of the Ordinance, submit a duly completed Form AR2 to the Commissioner of Rating and Valuation. Therefore, a landlord cannot submit Form AR2 to the RVD before the term of the “regulated tenancy” commences.

24. Can a landlord terminate the “regulated tenancy” before the expiry of the term?

A regulated cycle of “regulated tenancies” is to comprise 2 consecutive “regulated tenancies” (i.e. first term tenancy and second term tenancy) for the subdivided unit. Each “regulated tenancy” is for a term of 2 years. A tenant of a first term tenancy is entitled to be granted a second term tenancy, thus enjoying a total of 4 years (first term of 2 years plus second term of 2 years) of security of tenure. Unless under the provisions specified by Part IVA of the Ordinance, the landlord cannot terminate the tenancy before the expiry of the term. Even if the tenancy, has any conditions for forfeiture other than the specified provisions, they should be deemed invalid and shall be void.

According to Part IVA of the Ordinance, if the tenant is in breach of any of the provisions under Part 4 of Schedule 7 to the Ordinance, for instance failing to pay the rent to the landlord within 15 days after the due date, using the premises for immoral or illegal purpose, etc., the landlord may enforce the right of re-entry or forfeiture.

The landlord may also terminate the tenancy in accordance with the provisions under Part IVA of the Ordinance below:

  1. Section 120AAZ(7) of the Ordinance
    If the landlord has served the tenancy agreement as demanded by the tenant, but the tenant fails to sign and return the tenancy agreement to the landlord and pay back any rent withheld to the landlord within 15 days after the tenancy agreement has been served on the tenant, the landlord may, by giving the tenant not less than 15 days’ prior notice in writing, terminate the tenancy.
  2. (ection 4 of Part 2 of Schedule 7 to the Ordinance
    If the landlord has eventually returned the counterpart of the stamped tenancy agreement to the tenant, but the tenant fails to pay back any rent withheld to the landlord within 15 days after the tenant’s receipt of the counterpart, the landlord may, by giving the tenant not less than 15 days’ prior notice in writing, terminate the tenancy.


bullet  Second Term Tenancy

25. For a “regulated tenancy”, it is noted that the landlord of a first term tenancy must make a second term offer within the offer period. What does the landlord have to do? What does it mean by “offer period”?

A landlord of a first term tenancy must, within the offer period, use the Form AR1 to make a second term offer to the tenant for a second term tenancy of the regulated cycle for the subdivided unit, and serve the Form on the tenant. The landlord must state the proposed amount of rent for the second term tenancy in the Form and sign the Form in duplicate. For details, please watch the video “Regulated Tenancies of Subdivided Units - Steps to Make a Second Term Offer” and “Regulated Tenancies of Subdivided Units - How to Complete Form AR1 to Make a Second Term Offer”.

Offer period means the period of the second calendar month immediately before the calendar month in which the purported second term tenancy commences. For example, if a second term tenancy is to commence on any date of January 2024, the relevant offer period is the whole month of November 2023.

26. How to obtain the Form AR1?

Form AR1 can be obtained at the following locations:

  1. Rating and Valuation Department’s (RVD’s) Offices:
    1. 15/F, Cheung Sha Wan Government Offices, 303 Cheung Sha Wan Road, Kowloon; or
    2. Room 3816-22, 38/F, Immigration Tower, 7 Gloucester Road, Wanchai, Hong Kong (RVD’s Tenancy Services Section)

      3. Opening hours:
      Monday to Friday: 8:15 a.m. to 6:00 p.m.
      Saturday, Sunday and Public Holidays: Closed
  2. Lands Tribunal；
    38 Gascoigne Road, Yau Ma Tei, Kowloon
    Opening hours:
    Monday to Friday: 8:45 a.m. to 1:00 p.m.
    2:00 p.m. to 5:30 p.m.
    Saturday, Sunday and Public Holidays: Closed
  3. Home Affairs Enquiry Centres of Home Affairs Department in various districts:
    (For information about the centres, please visit: https://www.had.gov.hk/en/public_services/public_enquiry_services/ctec.htm)

If you wish RVD to send Form AR1 by post, please provide RVD with the name and mailing address of the recipient and indicate “Request Form AR1” through one of the channels below:

  1. Telephone hotline: 2150 8303;
  2. Email: enquiries@rvd.gov.hk;
  3. Post: the address at 1(i) above;
  4. Fax: 2152 0115.

27. How should the landlord of a first term tenancy serve Form AR1 on the tenant?

Pursuant to Part IVA of the Ordinance, a landlord of a first term tenancy may only leave the Form AR1 with an adult occupier of the premises in which the tenant resides and to which the Form AR1 relates.

28. Does the landlord or tenant need to submit Form AR1 signed by both parties to the Rating and Valuation Department (“RVD”)?

No, it is not necessary to submit Form AR1 to RVD. However, the landlord must submit a Notice of Tenancy (Form AR2) to the RVD within 60 days after the second term tenancy commences.

29. During the offer period, the landlord of a first term tenancy has served the completed and signed Form AR1 on the tenant to make a second term offer. When the first term tenancy is about to expire but the tenant has not accepted the offer, can the landlord withdraw the offer?

Once a second term offer is made, it remains open for acceptance by the tenant before the expiry of the first term tenancy, and the landlord may not withdraw the offer. If the tenant does not accept the amount of rent proposed by the landlord on the Form AR1, the tenant may negotiate with the landlord for the amount. If the landlord agrees to revise the proposed amount of rent, both parties must sign against the revised amount of rent as shown on the Form AR1. Tenants should remember to sign and return the served Form AR1 to the landlord before the expiry of the first term tenancy. Otherwise, the tenant is taken to have rejected the second term offer, the tenant will not be granted the second term tenancy and must move out of the premises before the expiry of the first term tenancy.

30. Both the landlord and tenant have already signed the Form AR1 in duplicate for the second term offer. Are the parties required to enter into another written tenancy agreement?

Pursuant to Part IVA of the Ordinance, “tenancy agreement” includes a Form AR1 signed by the landlord and tenant and its counterpart for a second term tenancy. Therefore, it is not necessary for both parties to enter into another written tenancy agreement. If the landlord and tenant would like to enter into another written tenancy agreement, they should note that the provisions in the agreement must not be in conflict or inconsistent with the mandatory terms of a “regulated tenancy”. If such provisions are in conflict or inconsistent with the mandatory terms, the mandatory terms shall prevail. In addition, the agreement must not include any terms or conditions other than those contained in the first term tenancy.

31. If the landlord of a first term tenancy fails to serve a second term offer on the tenant within the offer period, what are the consequences?

If the landlord of a first term tenancy for a subdivided unit fails to serve a second term offer on the tenant within the offer period of the second term tenancy, the landlord is taken to have made a second term offer to the tenant on the expiry of the offer period, and the tenant is taken to have accepted the second term offer; and to be granted the second term tenancy on the expiry of the first term tenancy.

In that case, the renewed rent for the second term tenancy is to be the amount of rent last payable by the tenant for the first term tenancy, if the control percentage ascertained for the rent for the second term tenancy is a negative figure, the renewed rent for the second term tenancy is to be reduced by that percentage.

Within the offer period, if the tenant has not yet received the landlord’s second term offer, the tenant may wish to check with the landlord if he/she has already sent out Form AR1, and if affirmative, whether the Form has gone astray, etc.

32. Under what situation is the landlord of a first term tenancy taken to have failed to serve a second term offer on the tenant?

Under any one of the following situations, a landlord of a first term tenancy is taken to have failed to serve a second term offer on the tenant:

  1. the offer is not served on the tenant within the offer period (please refer to Q25 & Q27 above);
  2. the offer is not made in Form AR1 (please refer to Q26 above for channels to obtain Form AR1);
  3. the landlord has not signed the Form AR1 sent to the tenant;
  4. the proposed amount of rent for the second term tenancy is not stated in the offer;
  5. the proposed amount of rent for the second term tenancy stated in the offer is higher than the maximum amount of rent for the second term tenancy permitted under Part IVA of the Ordinance (please refer to Q35 below); or
  6. any terms or conditions other than those contained in the first term tenancy are included in the offer (please refer to Q38 below).

33. How do a landlord of a first term tenancy make a valid second term offer?

A landlord of a first term tenancy must comply with the followings within the Offer Period

  1. the second term offer may only be made in Form AR1 (please refer to Q26 above for channels to obtain Form AR1);
  2. the landlord must state the proposed amount of rent for the second term tenancy in Form AR1; sign the Form and the proposed amount of rent must not exceed the maximum amount of rent for the second term tenancy that is permitted under Part IVA of the Ordinance (please refer to Q35 below);
  3. The second term offer must not include any terms or conditions other than those contained in the first term tenancy; and
  4. A second term offer, once made, remains open for acceptance by the tenant before the expiry of the first term tenancy, and the landlord may not withdraw the offer.

34. A landlord has submitted a Notice of Tenancy (Form AR2) to Rating and Valuation Department (“RVD”) within 60 days after the first term tenancy commenced. Does the landlord need to submit a fresh Form AR2 after both landlord and tenant have signed the Form AR1 in respect of the second term tenancy?

According to Part IVA of the Ordinance, the landlord must, within 60 days after the second term tenancy commences, submit a Notice of Tenancy (Form AR2) to RVD. Moreover, after receiving the signed Form AR1 in duplicate from the tenant, the landlord must arrange the forms to be stamped and return one of the stamped forms to the tenant within 30 days. The stamp duty is to be borne solely by the landlord.

35. The rent amount of the second term tenancy is regulated. How can a landlord calculate the maximum amount of rent as permitted for a “regulated tenancy”? What does it mean by “control percentage”?

The amount of rent for the second term tenancy agreed by the landlord and tenant must not exceed the maximum amount of rent permitted by Part IVA of the Ordinance. In particular, in the same regulated cycle, the rate of rent increase for the second term tenancy must not exceed the “control percentage”, and is capped at 10%. If the “control percentage” is a negative figure, the rent for the second term tenancy is to be reduced at least by that percentage.

“Control percentage” is the percentage change of the territory-wide rental index for all classes of private domestic properties compiled and published by the Rating and Valuation Department (“RVD”) during the relevant period (i.e., the period from the commencement month of the first term tenancy to the 4th calendar month immediately before the commencement month of the purported second term tenancy).

Landlord and tenant can use the Second Term Tenancy Rent Calculator available at the RVD’s website to calculate the maximum amount of renewed rent permitted by Part IVA of the Ordinance. They can also watch the video “Regulated Tenancies of Subdivided Units - How to use the Second Term Tenancy Rent Calculator” for details.

36. Regarding the use of the Second Term Tenancy Rent Calculator to calculate the maximum amount of renewed rent permitted by Part IVA of the Ordinance, is there any example for reference?

Regarding the calculation of the maximum amount of renewed rent permitted by Part IVA of the Ordinance, please refer to the following three examples:

  1. When the control percentage is 0-10%: For example, the control percentage is 2.3%, the increase in the renewed rent must be calculated based on the rent last payable for the first term tenancy, and the increase shall not exceed 2.3%.
  2. When the control percentage exceeds 10%: For example, the control percentage is 11%, the increase in the renewed rent must be calculated based on the rent last payable for the first term tenancy, and the increase shall not exceed 10%.
  3. When the control percentage is a negative figure: For example, the control percentage is -2%, the renewed rent must be calculated based on the rent last payable for the first term tenancy, and it is to be reduced at least by this percentage.

Please refer to Q35 above for the calculation of Control Percentage. If the amount of rent payable by the tenant has been reduced one or more times during the first term tenancy, the basis for calculating the amount of rent for the second term tenancy is to be the amount of rent last reduced during the first term tenancy. Please refer to Q43 below for the details regarding “the rent last payable”.

However, if the landlord fails to serve a valid second term offer on the tenant within the offer period, the renewed rent is to be the amount of rent last payable by the tenant for the first term tenancy even though the control percentage is a positive figure. Meanwhile, if the control percentage is a negative figure, the renewed rent is to be reduced by that percentage.

You may refer to the following examples when using the Second Term Tenancy Rent Calculator to calculate the maximum amount of renewed rent permitted by Part IVA of the Ordinance:

Examples for using the 'Second Term Tenancy Rent Calculator'

37. How to obtain the Rating and Valuation Department (“RVD”)’s territory-wide rental index for all classes of private domestic properties and the “control percentage”?

For the RVD’s territory-wide rental index for all classes of private domestic properties, please click here to download; and please click here to download all data of the “control percentage”.

38. When the landlord and tenant of a first term tenancy are dealing with the second term tenancy within the offer period, is it necessary for them to renew or revise the terms and conditions in the second term tenancy?

According to Part IVA of the Ordinance, except the tenancy period and the rent amount, all the terms and conditions should be the same as those contained in the first term tenancy. In any event, no terms or conditions of the second term tenancy should contravene the Part IVA of the Ordinance.

39. The landlord of a first term tenancy has served the second term offer on the tenant in Form AR1. If the tenant accepts the second term offer, is it a must for the tenant to sign the Form AR1 and serve it on the landlord?

If the tenant accepts the second term offer, the tenant must sign the Form AR1 containing the offer as served by the landlord, and serve it on the landlord before the expiry of the first term tenancy. If the tenant fails to notify the landlord of the tenant’s acceptance of the second term offer before the expiry of the first term tenancy, the tenant is taken to have rejected the second term offer. Please watch videos of “Regulated Tenancies of Subdivided Units - Steps to Make a Second Term Offer” and “Regulated Tenancies of Subdivided Units - How to Complete Form AR1 to Make a Second Term Offer” for more information.

40. The tenant of a first term tenancy would like to be granted a second term tenancy in a regulated cycle by the landlord. However, the tenant disagrees with the landlord on the proposed amount of rent for the second term tenancy as stated in the Form AR1, can the tenant negotiate with the landlord?

If the tenant disagrees with the landlord on the proposed amount of rent for the second term tenancy, the tenant may negotiate with the landlord for the amount before accepting the second term offer. If, after the negotiation, the landlord agrees to revise the proposed amount of rent for the second term tenancy, the landlord must sign against the revised amount of rent as shown on the served Form AR1. If the tenant accepts the second term offer at the revised amount of rent, the tenant must sign against the revised amount of rent as shown on the Form AR1; and serve the Form on the landlord before the expiry of the first term tenancy. Please watch video of “Regulated Tenancies of Subdivided Units - How to Complete Form AR1 to Make a Second Term Offer” for details.

Landlords and tenants may use the “Second Term Tenancy Rent Calculator” on RVD’s website to calculate the maximum amount of renewed rent by Part IVA of the Ordinance, or watch the video “Regulated Tenancies of Subdivided Units - How to Use the Second Term Tenancy Rent Calculator” for details.

41. Under what situation is the tenant of a first term tenancy taken to have failed to accept a second term offer?

Under any one of the following situations, the tenant is taken to have failed to accept a second term offer:

  1. no notice of acceptance has ever been given by the tenant under Part IVA of the Ordinance;
  2. the notice of acceptance is served by the tenant on the landlord only after the expiry of the first term tenancy;
  3. the notice of acceptance is not given by the tenant in the same Form AR1 sent by the landlord that contains the second term offer; or
  4. the tenant has not signed the Form AR1 sent by the landlord when the Form is returned to the landlord.

42. Under what situation does a second term tenancy offer lapse?

Notwithstanding a second term offer is made by the landlord to the tenant according to Part IVA of the Ordinance, or a second term offer is taken to have been made by the landlord to the tenant according to Part IVA of the Ordinance, if the tenant has already terminated the first term tenancy before its expiry, the second term tenancy offer will be lapsed.

43. In the calculation of the maximum amount of rent for the second term tenancy permitted by Part IVA of the Ordinance, what is “the rent last payable” for the first term tenancy?

The last rental payment made by the tenant to the landlord within the first term tenancy is “the rent last payable”. If the amount of rent payable by the tenant has been reduced one or more times during the first term tenancy, the basis for calculating the amount of rent for the second term tenancy is to be the amount of rent last reduced during the first term tenancy. Example: Within the first term tenancy, the landlord notified the tenant in writing the reduction of the amount of rent from $5,500 to $5,000 per month, and subsequently notified the tenant in writing that the amount of rent was further reduced to $4,500 per month. The basis for calculating the amount of rent for the second term tenancy is to be “the rent last payable”, i.e. $4,500 per month.


bullet  Offences

44. I am a landlord of a unit which has been subdivided into several subdivided units for letting, and only certain tenancies thereof are “regulated tenancies”. If I require all tenants within the unit (including tenants of non-regulated tenancies) to pay for the reimbursement of the apportioned charges for utilities as a separate payment from rent, but the aggregate of the apportioned amounts exceeds the billed amount, have I committed an offence?

If the subject tenancy of the subdivided unit is a “regulated tenancy” under Part IVA of the Ordinance, it is regulated under the relevant legislation. Where the landlord of a “regulated tenancy” requests the tenant to pay for the reimbursement of charges for any of the specified utilities and services (means water, electricity, gas and communication services; communication services include a telephone (other than mobile phone), the Internet, a cable TV, a satellite TV) as a separate payment from rent, the landlord must produce to the tenant copies of the bills covering the charges in which the landlord is the payer named, and provide an account in writing showing how the amounts under the bills are apportioned for the different parts (of which the relevant subdivided unit is a part) forming the premises to which the bills relate and the aggregate of the apportioned amounts does not exceed the billed amounts.

According to Part IVA of the Ordinance, the landlord commits an offence if the landlord requires the tenant of a “regulated tenancy” to pay for, or the landlord otherwise receives from the tenant the reimbursement of the charges for any of the specified utilities and services at a sum exceeding the apportioned amount for the subdivided unit as shown in the abovementioned account or the aggregate of the apportioned amounts exceeds the billed amounts. The landlord is liable on a first conviction to a fine at level 3 (currently HK$10,000), and on a second or subsequent conviction to a fine at level 4 (currently HK$25,000).

45. How should the charges for the specified utilities and services be apportioned among the tenants of “regulated tenancies”?

Provided that there is no conflict with the relevant legislation (see Q44 above), the landlord and tenant of a “regulated tenancy” may discuss and agree on an acceptable method of apportionment before entering into a tenancy.

46. If a landlord is suspected of having committed an offence under Part IVA of the Ordinance, how can a tenant report the case?

If a landlord is suspected of having committed an offence under the provisions of Part IVA of the Ordinance, for instance charging any non-permitted money or reimbursement of charges for the specified utilities and services (including water and electricity), the complainant may report to the Rating and Valuation Department (“RVD”) via hotline, email or in person. After knowing the situation, RVD will investigate and take follow-up action in accordance with the Ordinance; conduct site inspection if necessary, and, depending on the circumstances of individual cases, consider whether legal action is warranted.


bullet  Access to building plans, deed of mutual covenant and primary user certificate

47. It is noted from Part IVA of the Ordinance that a “building plan” means a plan approved by the Building Authority under the Buildings Ordinance or prepared by the Hong Kong Housing Authority in relation to a building to which the Buildings Ordinance does not apply under section 18(2) of the Housing Ordinance. Where can I view or obtain a copy of the building plans approved by the Building Authority or prepared by the Hong Kong Housing Authority? Do I have to pay?

For viewing or obtaining a copy of the “building plan” approved by the Building Authority under the Buildings Ordinance (Cap. 123), you may –

  1. access the Building Records Access and Viewing On-line System of the Buildings Department at www.bd.gov.hk/en/resources/online-tools/BRAVO-online-building-records/index.html; or
  2. visit in person the Building Information Centre of the Buildings Department at 2/F, Buildings Department Headquarters, North Tower, West Kowloon Government Offices, 11 Hoi Ting Road, Yau Ma Tei, Kowloon (Tel.: 2626 1207).

As at end December 2021, the prescribed fee for inspection of plans, documents and photos is HK$36 per file type; and that for copying certified plans is HK$42 per sheet; and that for certified documents and photos is HK$8 per sheet.

For the “building plan” prepared by the Hong Kong Housing Authority in relation to a building to which the Buildings Ordinance does not apply under section 18(2) of the Housing Ordinance (Cap. 283), you may –

  1. access the Housing Electronic Building Records Online System of the Independent Checking Unit at https://eservices.housingauthority.gov.hk/hebros/; or
  2. book a visit to the Hong Kong Housing Authority's service counter at 8/F, Lung Cheung Office Block, 138 Lung Cheung Road, Wong Tai Sin, Kowloon by calling the hotline of the Independent Checking Unit on 3162 0621.

As at end December 2021, the prescribed fees for inspection of plan and documents are HK$36 to HK$37 per file type, and those for copying plans and documents are HK$1.1 to HK$45 per sheet, depending on the types of records.

48. It is noted from Part IVA of the Ordinance that a “unit” may mean premises that are referred to in the deed of mutual covenant of the building as a unit (however described), the owner of which is entitled to its exclusive possession, as opposed to the owners or occupiers of other parts of the building. Where can I view or obtain a copy of the deed of mutual covenant? Do I have to pay?

For the deed of mutual covenant, you may request copying services at prescribed fees by –

  1. using the Integrated Registration Information System Online Services of the Land Registry at www.landreg.gov.hk/en/services/services_b_2.htm; or
  2. visiting the Land Registry’s offices at the following locations –
    1. The Land Registry’s Customer Centre – 19/F, Queensway Government Offices, 66 Queensway, Hong Kong (Tel.: 3741 2423);
    2. Tai Po Search Office – Tai Po Complex, 4/F, 8 Heung Sze Wui Street, Tai Po (Tel. 2653 5859);
    3. Tsuen Wan Search Office – Tsuen Wan Multi-storey Carpark Building, 11/F, 174-208 Castle Peak Road, Tsuen Wan (Tel. 2416 3505); or
    4. Yuen Long Search Office – Yuen Long Government Offices and Tai Kiu Market, 7/F, 2 Kiu Lok Square, Yuen Long (Tel. 2475 0341).

As at end December 2021, the prescribed fee for ordering a copy of the deed of mutual covenant is HK$100.

49. One of the conditions of a “regulated tenancy” is that the tenancy is a domestic tenancy (see Q.6 above), and that the primary user of the subject premises of the tenancy may be one of the factors for consideration. It is noted that a landlord or tenant of any premises may apply to the Commissioner of Rating and Valuation (“Commissioner”) for the issue of a primary user certificate for the premises. Do I need to pay to apply for a primary user certificate?

If a dispute arises as to whether a tenancy of any premises is a domestic tenancy; and the primary user of the premises is relevant to the dispute, the landlord or tenant of the premises may apply to the Commissioner for the issue of a primary user certificate for the premises in Form TR4 at no fee. A landlord or tenant of any premises may also apply to the Commissioner for the issue of a primary user certificate in Form TR4D at a fee even though no dispute arises as to whether the tenancy is a domestic tenancy. For application details, please refer to the notes of the relevant forms available at the Rating and Valuation Department’s webpage.


bullet  Others

50. If a statutory order is served requiring demolition of a subdivided unit which is under a “regulated tenancy”, can the tenancy be terminated early?

If a statutory order is served requiring demolition of a subdivided unit which is under a “regulated tenancy”, the relevant person is obliged to comply with such order. Part IVA of the Ordinance is not meant to “legalise” subdivided units, and the tenancy control regime on subdivided units would not prejudice law enforcement actions taken by relevant authorities under existing legislations. Part IVA of the Ordinance does not prohibit a tenant of a “regulated tenancy” from surrendering the tenancy to the landlord before the expiry of the term if both parties can reach a consensus. Therefore, the landlord must discuss with the tenant and come up with a mutual agreement to terminate the tenancy concerned where possible.

51. When a tenant’s interest passes to a family member on death, what does “family member” mean under Part IVA of the Ordinance?

If a tenant of a “regulated tenancy” dies during the term of the tenancy, the subsisting benefits and protection under the “regulated tenancy” to which the tenant is entitled under Part IVA of the Ordinance during the tenant’s life time are, after the tenant’s death, available to a family member of the tenant who is residing with the tenant in the subdivided unit at the time of the tenant’s death. Under Part IVA of the Ordinance, “family member”, in relation to a person, means –

  1. the person’s spouse;
  2. the person’s parent;
  3. the person’s adult child;
  4. the person’s grandparent; or
  5. the person’s adult grandchild.

A child includes an illegitimate child, a stepchild and a child adopted in a way recognized by law, and parent, grandchild and grandparent are to be construed accordingly.

52. Whether a landlord should submit a Notice of Tenancy (Form AR2) or a Notice of New Letting or Renewal Agreement (Form CR109) to the Rating and Valuation Department (“RVD”) for the tenancy of premises? Is it necessary for a landlord to submit both forms to RVD?

If the relevant tenancy is a “regulated tenancy” under Part IVA of the Ordinance (see Q6 above), the landlord must submit Form AR2. If the relevant tenancy is a domestic tenancy to which Part IV of the Ordinance applies (see Q2 above), the landlord must submit Form CR109. A landlord should pay attention that he/she has to submit Form AR2 or Form CR109 to RVD by the statutory time limit concerned (see Q17 and Q2 above).



Non-Domestic Tenancies

53. Is there any statutory control on rent or security of tenure for a non-domestic tenancy?

The rent and the security of tenure of non-domestic tenancies are not subject to any statutory control under the Ordinance.



Miscellaneous

54. How can a landlord and a tenant agree on the format and terms of the tenancy agreement?

The Ordinance contains no provision to regulate the format of tenancy agreement. A landlord and a tenant may freely negotiate and agree on appropriate format to suit the two parties’ needs and circumstances. In the event of tenancy disputes over an agreement which cannot be settled between the landlord and the tenant, either party may resort to legal proceedings to deal with the matter.

For regulated tenancies under Part IVA of the Ordinance, a Template for Tenancy Agreement for a Regulated Tenancy to which Part IVA of the Ordinance applies (“template”), prepared by the Transport and Housing Bureau for general reference purpose, is available at the Rating and Valuation Department (“RVD”)’s webpage. The landlord and tenant of a regulated tenancy may use and adapt the template with such modifications as appropriate (mandatory terms excepted) to suit their own circumstances.

55. Is there any provision in the Ordinance regulating repair liabilities ?

Except that section 5 in Schedule 7 to the Ordinance stipulates a few mandatory terms on maintenance and repair as part of Landlord’s obligations under a regulated tenancy to which Part IVA of the Ordinance applies, the Ordinance contains no provision to regulate repair liabilities. A landlord and a tenant may freely negotiate and agree on appropriate terms (the mandatory terms that are applicable to a regulated tenancy excepted). In the event of tenancy disputes on maintenance and repair matters which cannot be settled between the landlord and the tenant, either party may resort to legal proceedings to deal with the matters.

56. What can a tenant do when the landlord refuses to accept rent ?

If a landlord refuses to accept the rent, the tenant may send the rent by cheque through the post to the landlord. If the letter is unclaimed, the tenant should keep it as a proof for future legal proceedings.

57. What can a landlord do when a tenant owes rent ?

When the tenant is in arrears of rent, the landlord can take one of the following actions :

  1. apply for a special procedure known as “distress”, whereby the District Court makes an order directing the goods of the tenant to be seized by the bailiff. If the tenant still fails to pay the rent, the goods will be sold and the proceeds applied towards the outstanding rent. The application form and pro forma affidavit can be obtained from the District Court Registry. The landlord can complete the preliminary procedure by returning the completed forms to the District Court Registry. The District Court will inform the landlord when execution has been levied. However, if the landlord is claiming more than 12 months’ rent, he cannot use the distress procedure. He has to use the normal procedure for suing for breach of contract instead;
  2. sue the tenant in the Small Claims Tribunal for rent arrears of not more than HK$75,000. If the amount exceeds HK$75,000, the landlord may sue the tenant in the District Court; or
  3. apply to the Lands Tribunal for a possession order

A domestic tenant who persistently pays his rent late may be regarded as causing unnecessary inconvenience to the landlord. The landlord may apply to the Lands Tribunal for a possession order if the tenant continues with such acts despite written warnings.



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