Introduction
Part IVA of the Landlord and Tenant (Consolidation) Ordinance (Cap. 7) (the Ordinance) came into effect on 22 January 2022, imposing regulations on tenancy of a subdivided unit (SDU) which is commonly known as "??" in Chinese.
Q1: What kind of tenancy is regulated?
A tenancy which fulfils all the following conditions is regulated:
(a) Commences on or after 22 January
2022
(b) Domestic tenancy
(c) The subject premises of the tenancy are a SDU
(d) Tenant is a natural person
(e) Purpose is for tenant's own dwelling
(f) Not an excluded tenancy (i.e. being one specified in Schedule 6
to the Ordinance).
Q2: What are some key features of the new regulations?
Topic | Details | |
1. | Security of Tenure |
|
2. | 2nd Term Offer |
|
3. | Submission of Notice of Tenancy |
|
4. | Written Tenancy Agreement |
|
5. | Rental Deposit |
|
6. | Rent Control |
|
7. | Tenant's Early Termination |
|
8. |
Restriction on Miscellaneous Fees |
|
9. | Mandatory Implied Terms |
|
Conclusion
The above regulations took effect on tenancies commencing on or after 22 January 2022. Estate agents, landlords and relevant parties should take the opportunity to examine the current arrangements with the tenants of SDUs during the transition period, so as to ensure that their conduct of business complies with the requirements contained therein.
The Estate Agents Authority (EAA) has also issued a Practice Circular (no.22-01(CR)) on the handling of the tenancy of subdivided units. Estate agents who fail to comply with the guidelines in the Circular or the relevant law may be subject to disciplinary action.
The guideline could be found here: https://www.eaa.org.hk/Portals/0/Sections/CC/2022_Jan/20220112e.pdf
Please also see the Regulated Tenancies Booklet published by RVD for more information: https://www.rvd.gov.hk/doc/en/Regulated_Tenancies_Booklet_eng.pdf
Footnotes
1. Template for tenancy agreement for a "regulated tenancy" can be downloaded from RVD's webpage (www.rvd.gov.hk/en/our_services/tenancy_matters.html) for general reference.
2. Online calculator (a) showing the maximum percentage for an increase of rent for the relevant second term tenancy and (b) calculating the maximum amount of renewed rent as permitted under the Ordinance will be available at RVD's webpage from October 2023 for reference purpose.
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