Regulated Tenancies of Subdivided Units – Second Term Tenancy

Steps to Make a Second Term Offer

A landlord of a first term tenancy for a SDU must, within the offer period, make a second term offer in the statutory Form AR1 to the tenant for a second term tenancy of the regulated cycle for the SDU, and serve the offer on the tenant. The landlord must state the proposed amount of rent for the second term tenancy in the Form AR1 and sign the Form. “Offer Period” is 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 day of January 2024, the relevant offer period is the whole month of November 2023.

Please watch the following video “Regulated Tenancies of Subdivided Units - Steps to Make a Second Term Offer” for details:

Download Subtitles for the Tutorial Video (pdf file)

Completing Form AR1 (Channels to Obtain Form AR1)

Landlord must use the statutory Form AR1, within the offer period, to serve on the tenant to make a second term offer.

Please watch the following video “Regulated Tenancies of Subdivided Units - How to Complete Form AR1 to Make a Second Term Offer” for details.

Download Substitles for the Tutorial Video (pdf file)

Using the Second Term Tenancy Rent Calculator

Renewed rent is regulated. The amount of rent for the second term tenancy as agreed by the landlord and the tenant must not exceed the maximum amount of rent that is permitted under Part IVA of the Landlord and Tenant (Consolidation) Ordinance (“the Ordinance”). Specifically, in the same regulated cycle, the rate of rent increase for the second term tenancy must not exceed the percentage change of the territory-wide rental index for all classes of private domestic properties compiled and published by this Department during the relevant period, and is capped at 10%. If the percentage is a negative figure, the rent for the second term tenancy is to be reduced at least by that percentage. The Second Term Tenancy Rent Calculator available at the departmental website can be used to (a) show the maximum percentage for an increase of rent for the relevant second term tenancy; and (b) calculate the maximum amount of renewed rent as permitted under the Ordinance, for reference purpose.

Please watch the following video “Regulated Tenancies of Subdivided Units - How to use the Second Term Tenancy Rent Calculator.

Download Substitles for the Tutorial Video (pdf file)
Download All Control Percentage Data (From November2023) (xls file)

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