[Subdivided Unit Regulations] How to protect your rights?

Rental issues concerning subdivided units have once again become a hot topic! Nine landlords were found guilty yesterday by the Eastern Magistrates' Courts for violating Part IVA of the Landlord and Tenant (Consolidation) Ordinance(Cap. 7), with fines totaling $39,200. These penalties have drawn significant attention from the industry and raised concerns in the rental market. But as a tenant, how well do you understand your rights? LetsGetHome is here to break down the key points of this incident and help you navigate the critical details of subdivided unit regulations effortlessly.

What Were the Two Main Violations of the Nine Landlords?

Since the ordinance came into effect, the Rating and Valuation Department has successfully prosecuted 450 cases, with total fines approaching HKD 1 million! The two primary types of violations include:

1. Failure to Submit Tenancy Notification (Form AR2) on Time

   Landlords failed to submit the required notification to the Rating and Valuation Department within 60 days of the regulated tenancy's commencement, violating statutory requirements.

2. Overcharging Rent

   Some landlords demanded rent amounts exceeding the legally permitted limits. One landlord, involved in as many as 10 violations, was fined $11,200!

Essential Tenant Rights and Protections

The ordinance grants tenants several rights, including:

• Four-Year Tenancy Rights: The regulated tenancy period consists of two terms (initial term + subsequent term), each lasting two years, totaling four years of tenancy protection.
• Legal Rent Protections: Landlords are prohibited from charging tenants rent above the statutory cap.
• Complaints and Redress: Tenants can report violations directly to the Rating and Valuation Department and request an investigation if misconduct is suspected.

Tenant Tips: How to Avoid Pitfalls?

1. Verify Tenancy Notification Using Form AR3 Before Signing

   Check if the landlord has submitted Form AR2. Failure to do so constitutes a violation, and tenants have the right to refuse to sign the lease.

2. Keep Rental Receipts

   Retain all payment records to prevent future financial disputes.

3. Pay Attention to Subsequent Term Offers

   If a tenant disagrees with the proposed rent, they can negotiate adjustments with the landlord. Both parties must sign the adjusted rent on the relevant form. Tenants can accept the subsequent term offer at any time before the expiration of the initial term by signing and submitting Form AR1 to the landlord. Failure to accept before the term expires is considered a rejection of the offer.

4. Use Written Agreements for Lease Renewals

   Avoid informal arrangements such as verbal agreements and ensure all lease documents are clearly stated in writing.

Renting a subdivided unit isn’t synonymous with “cheap and good.” Both landlords and tenants must adhere to the legal requirements. If you encounter issues, contact the Rating and Valuation Department promptly to safeguard your rights.

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