The Basic Housing Units Regime: Deadlines, Grace Periods, and What Tenants and Landlords Each Need to Know

The question many people ask

Many subdivided-flat tenants have been here: the landlord says, "new rules are coming, I may need to renovate — start packing." Online, some say landlords who don't register are committing an offence; others say tenants will be pushed out. What is the actual timetable, and who has to do what?

The whole regime in one timetable

Which flats qualify for registration? The official registration page states the flat must be in a private domestic building or the domestic part of a composite building, and must have had at least one valid domestic tenancy of a subdivided unit between 4 July and 3 October 2025 (a copy of the Notice of Tenancy (Form AR2) endorsed by the Rating and Valuation Department and/or the tenancy agreement is required).

Fees: registration is free, but recognition is not

This is widely misreported, so it is worth separating:

• Both deadlines are extendable. Section 10(2) lets the Secretary "extend the grace-period (registration) application period" by Gazette notice (s.10(3): only before it expires); section 9(4) lets the Secretary "extend the grace period" (s.9(5): only before its last 6 months begin). Because section 30 defines the countdown period as "the last 6 months of the grace period", extending the grace period moves 1 September 2029 too.
• Grace-period registration: free within the statutory window. Section 10(1)(c) requires the prescribed fee, and Schedule 2 item 1 sets it: $0 for an application made between 1 March 2026 and 28 February 2027; $745 per flat if the application period is extended under section 9(4) and the application is made on or after 1 March 2027. (Schedule 2 item 1(b) itself reads "if the grace-period (registration) application period is extended under section 9(4), and the application is made on or after 1 March 2027" — the Schedule states section 9(4) as the trigger, while the power over the registration application period is in section 10(2). The Schedule's own wording is reproduced here.)
• BHU recognition: HK$3,000 per subdivided unit; renewal of recognition HK$2,400 per unit.
• These fees, the exclusion list below and the minimum standards are all in Schedules — and the Schedules can be changed. Section 91(1): "The Secretary may by notice published in the Gazette amend any of the Schedules." The fee table is Schedule 2, the excluded premises are Schedule 4 Part 2, and the minimum standards are Schedule 1; Schedules 1 and 2 are themselves annotated "ss. 2 & 91". None of the three is fixed.

The Government offers an "early-bird" concession: applications for recognition made within the first three years of the regime (1 March 2026 to 28 February 2029) attract the waivers and reductions below — the earlier the grace-period registration was submitted, the longer the fee-free window runs. (The table is wide — swipe for the full table.)

Recognition is valid for five years and may be renewed. Section 16(2): "Unless a recognition given under subsection (1) is renewed under subsection (3) or is cancelled under section 25(1), and subject to section 26, the recognition is in force for a period of 60 months beginning on its recognition date." — 60 months, with section 16(4) making the same provision for a renewed recognition. The renewal window comes from section 21(1)(d): the application must be made "no earlier than 6 months before the date on which the basic-housing-unit recognition sought to be renewed ceases to be in force (expiry date) and no later than 3 months before that date." (the three-to-six-month window before expiry); section 21(3) supplies a dispensation: "Subsection (1)(d) does not apply to a basic-housing-unit (renewal) application made within 3 months before the expiry date if the Secretary considers that there is a good reason for it not to apply."

Recognition need not last the full five years. Section 25(1) provides that "The Secretary may, by written notice (cancellation notice), cancel a basic-housing-unit recognition so that it ceases to be in force on a certain date (cancellation date)", The grounds in subsection (1) include: (a) "the Secretary is satisfied that the basic housing unit no longer meets the minimum standards of living conditions"; (d) refusal of an authorized officer's request for entry to and inspection of the principal flat of the basic housing unit under section 38(2) for determining whether or not to cancel the recognition; and (e) "a rectification notice issued under section 40(1) in respect of the basic housing unit has not been complied with". Section 25(3) then lets the Secretary direct, by the same cancellation notice, the termination of a subsisting domestic tenancy.

For landlords: what happens if you don't register?

The offence is section 8 of the Basic Housing Units Ordinance (Cap. 658), and it differs from the common account in three ways.

First, section 8 is not yet in operation. Section 1(2) brings the Ordinance into operation on 1 March 2026, but opens "Subject to subsection (3)". Section 1(3) provides: "Part 2 comes into operation on 1 March 2027", and section 8 is the only section in Part 2. The Ordinance text itself marks section 8 "(Not yet in operation)". And section 1(4) expressly confers a power to postpone: "The Secretary for Housing may, by notice published in the Gazette, postpone the date specified in subsection (3)." That date is statutorily postponable.

Second, the offence requires two or more subdivided units, not one. Section 8(1): "If 2 or more subdivided units in a flat are let under separate domestic tenancies while— (a) no grace-period registration is in force for the flat; and (b) no basic-housing-unit recognition is in force for any one of the subdivided units (unrecognized subdivided unit), then each of the persons specified in subsection (2) commits an offence." Letting a single subdivided unit on its own does not fall within section 8(1).

Third, liability reaches beyond whoever signed the tenancy. Section 8(2) names three classes: the person who lets the unrecognized unit; the person who lets the whole principal flat under a superior tenancy; and "a person who is not a person mentioned in paragraph (a) or (b), but is from time to time entitled to receive rent for the letting described in paragraph (a) or (b)".

Penalties (section 8(3)):

• Section 8(3)(a): "on summary conviction—to a fine at level 6 and to imprisonment for 2 years and, in the case of a continuing offence, to a further fine of $20,000 for every day during which the offence continues; or"
• Section 8(3)(b): "on conviction on indictment—to a fine of $300,000 and to imprisonment for 3 years and, in the case of a continuing offence, to a further fine of $20,000 for every day during which the offence continues."

The amount of a level 6 fine is set by Schedule 8 to the Criminal Procedure Ordinance (Cap. 221): level 6 is $100,000.

Defence (section 8(4)). It is a defence to establish that the person did not know and had no reason to suspect the unit was let in circumstances constituting the offence; or could not with reasonable diligence have prevented it; or that the tenancy was not originally for habitation and either (i) the person neither knew nor had reason to suspect otherwise, or (ii) the person could not with reasonable diligence have prevented the unrecognized subdivided unit from being used for habitation. Section 8(6) provides that the matter is taken to be established where there is "sufficient evidence to raise an issue" on it and the prosecution does not prove the contrary beyond reasonable doubt.

A second, separate offence — letting during the countdown period. Section 35(1) makes it an offence to let a subdivided unit in a registered flat where the term begins during the countdown period and no BHU recognition is then in force. Note the words of paragraph (a): "the person lets a subdivided unit in a registered flat under a domestic tenancy" — section 35 reaches a registered flat only, and does not apply to an unregistered one. The penalties in section 35(2) are the same as section 8(3); section 35(3) provides its own defences; and section 35(4) is the counterpart of section 8(6) — a matter is taken to be established where there is "sufficient evidence to raise an issue" on it and the prosecution does not prove the contrary beyond reasonable doubt.

In addition, section 41(1) lets the Secretary for Housing, where satisfied that a subdivided unit is let in circumstances constituting an offence under section 8(1) or 35(1), direct the termination of the tenancy by termination notice. The tenant normally has 30 days: section 41(4) provides that "Unless the Secretary is satisfied that there is an imminent danger or risk to life or property in the subdivided unit, its principal flat or the common parts of its principal building, the termination date must not fall within the period of 30 days beginning immediately after the date of the termination notice." — but the 30 days do not apply where the Secretary is satisfied there is imminent danger. Section 41(5): "If the termination of a tenancy is directed under subsection (1), the tenant under the tenancy may, in accordance with Part 7, recover as a civil debt compensation from the operator of the subdivided unit for the termination of the tenancy."

The Ordinance does not apply to premises specified in Schedule 4 Part 2. Section 6: "This Ordinance does not apply to any premises specified in Part 2 of Schedule 4." That Part covers, among others, bedspace apartments (Cap. 447), flats let by the Housing Authority or Housing Society, subsidised sale flats on which no premium has been paid, Transitional Housing, Light Public Housing, flats let by non-profit-making organizations (item 6 reads "A flat that is let by a non-profit-making organization operating on a non-profit-making basis for the provision of social services" — the statutory class is a non-profit-making organization, not NGOs generally), URA-acquired flats, hotels and guesthouses, residential care homes, child care centres, treatment centres, school and university hostels, and staff quarters — item 14 requires both that the premises are used to provide sleeping accommodation by an employer to employees and their families, and that the owner of the premises is the employer; employer-provided quarters owned by someone other than the employer do not qualify. The list closes with a catch-all at item 15: "Any other premises similar to the ones specified in item 8, 9, 10, 11, 12, 13 or 14" — so premises similar to items 8 to 14 are outside the regime too. Anyone living in those is outside this regime and outside the protections described here.

For tenants: your protections remain — with one key exception

The BHU regime sits on top of the existing rent-control framework (Part IVA of the Landlord and Tenant (Consolidation) Ordinance, Cap. 7) — it does not replace it.

• Tenants under regulated tenancies have "2+2" security of tenure — 4 years in total (Cap. 7 s.120AAO(1): a regulated cycle comprises 2 consecutive regulated tenancies "each for a term of 2 years").

But the flat statement that a landlord cannot terminate needs narrowing. Section 120AAZI(1) does provide that a landlord of a regulated tenancy for a subdivided unit "may not terminate the tenancy before the expiry of the term despite any provision of the tenancy that purports to do so". Section 120AAZI(2) immediately qualifies it: the landlord may terminate by notice under section 120AAZ(7) or under "section 4(3) of Part 2 of Schedule 7 impliedly incorporated into the tenancy under section 120AAZF; or", or "enforce a right of re-entry or forfeiture in accordance with Part 4 of Schedule 7 impliedly incorporated into the tenancy under section 120AAZF." Schedule 7 Part 4 section 12(1)(a) allows re-entry where the tenant "is in breach of section 7 of this Schedule and fails to pay the rent within 15 days after the due date (except where the tenant is withholding the payment of rent under section 120AAZ(3)(a), or section 4(1) of this Schedule)", and section 12(2) provides that "The tenancy of the premises is terminated immediately on the landlord’s re-entry under subsection (1)." So rent more than 15 days overdue can end the tenancy — but section 12(1)(a) carries its own bracketed exception. Where the tenant is lawfully withholding rent under section 120AAZ(3)(a) (the landlord failed to serve a written tenancy agreement on demand, so the tenant may elect "to withhold the payment of rent until the landlord has done so") or under section 4(1) of Part 2 of Schedule 7 (the landlord failed to return the stamped counterpart), section 12(1)(a) does not apply and the landlord cannot re-enter for those arrears.

But withholding rent is not a permanent shield — it carries a 15-day pay-back duty. Section 120AAZ(5) provides that once the landlord has eventually served the tenancy agreement, "the tenant must do the things specified in subsection (6) within 15 days after the tenancy agreement has been served on the tenant." Those things (subsection (6)) include not only signing and returning the agreement but "(if applicable) to pay back, free of interest, any rent withheld under subsection (3)(a) to the landlord." Section 120AAZ(7) then provides: "If the tenant fails to comply with subsection (5), the landlord may, by giving the tenant not less than 15 days’ prior notice in writing, terminate the tenancy." Section 4(2) and (3) of Part 2 of Schedule 7 are the identical mechanism: "If the landlord has eventually returned the counterpart of the stamped tenancy agreement to the tenant, the tenant must pay back, free of interest, any rent withheld under subsection (1) to the landlord within 15 days after the tenant’s receipt of the counterpart."; "If the tenant fails to comply with subsection (2), the landlord may, by giving the tenant not less than 15 days’ prior notice in writing, terminate the tenancy." And section 120AAZI(2)(a) expressly preserves both of those termination routes. So: withholding rent blocks re-entry for the arrears withheld, but once the landlord delivers the document the tenant has 15 days to sign, return and pay back — and after that the landlord may terminate on not less than 15 days' written notice.

Nor is section 12(1)(a) the only rent-related route to re-entry. Section 12(1)(b) of Part 4 of Schedule 7 also allows the landlord to re-enter where the tenant "is in breach of section 8, 9, 10 or 11 of this Schedule" — that is, section 8 (structural alteration without consent), section 9 (immoral or illegal purpose), section 10 (annoyance, inconvenience or disturbance) and section 11 (assignment or underletting). Section 10(2) provides: "For the purposes of subsection (1), if the tenant persistently fails to pay rent as and when it falls due, the tenant may be regarded as causing unnecessary inconvenience to the landlord." Persistent arrears can therefore become a ground of re-entry through section 10 and section 12(1)(b) — a route that is not subject to section 12(1)(a)'s 15-day rule and is not covered by its bracketed withholding exception.

And section 120AAZI(4) is not merely a cross-reference — it is a restriction, and it has two limbs, not one. The subsection opens "Despite section 58(14) of the Conveyancing and Property Ordinance (Cap. 219)—", and then splits: (a) provides that "subsection (2)(b) and sections 7 and 12(1)(a) and (2) of Part 4 of Schedule 7 have effect subject to section 58(4) and (10) of that Ordinance"; (b) provides that "subsection (2)(b) and sections 8, 9, 10, 11 and 12(1)(b) and (2) of Part 4 of Schedule 7 have effect subject to section 58 (except section 58(14)) of that Ordinance."

The division matters. Section 58 of Cap. 219 restricts and gives relief against forfeiture, but section 58(10) is a saving, not a grant of relief: "This section does not, save as mentioned in subsection (4), affect the law relating to re-entry or forfeiture or relief in case of non-payment of rent." So, apart from subsection (4) (a person claiming as under-lessee may apply to the court for a vesting order), section 58 does not deal with re-entry for arrears at all — it leaves relief for non-payment of rent to the general law. A tenant therefore cannot apply under section 58 for relief against forfeiture for arrears; the only person section 58(4) reaches is an under-lessee. Conversely, forfeiture on grounds other than rent — the limb (4)(b) route, through sections 8 to 11 and section 12(1)(b) — takes effect subject to the whole of section 58, including the section 58(1) notice requirement and the section 58(2) relief jurisdiction. That is a materially stronger protection than the rent limb carries.

Relief for non-payment of rent actually lives in the District Court Ordinance (Cap. 336), sections 69 and 69B. Section 69 covers a lessor proceeding by action, and it opens "Subject to subsection (1A)": section 69(1A) provides that where, during the term of a lease, section 69 has already once prevented a lessor from enforcing the right against a lessee, the section does not apply again during that same term unless the Court is satisfied there is good cause why it should apply in favour of the lessee — so relief under this route is a one-time protection per lease term absent good cause. Under section 69(2) the action ceases if the lessee pays all arrears and costs into court within the time for acknowledging service, and section 69(3) provides that "The Court is to order that the lessor be given possession of the land on the expiry of a period, not being less than 7 days from the date of the order, as the Court thinks fit if the Court at the trial is satisfied that the lessor is entitled to enforce the right of re-entry or forfeiture" — the possession order is conditional on the Court being so satisfied at trial. Section 69B covers re-entry without action — the Schedule 7 Part 4 section 12 situation: section 69B(1) confines it to land "where the rateable value of the land, determined in accordance with the provisions of the Rating Ordinance (Cap. 116), does not exceed $320,000", and section 69B(2) provides: "The lessee may, at any time within 6 months from the date on which the lessor re-entered, apply to the Court for relief, and on any such application the Court may grant to the lessee such relief as the Court of First Instance could have granted." So after a re-entry for arrears the tenant has a six-month window to apply, and the application goes to the District Court. (Section 58(14) of Cap. 219 itself makes section 58 subject to Cap. 7 and Cap. 336, which is exactly what the "Despite" opening of section 120AAZI(4) is there to override.)

Section 120AAZI(3) adds: "Any condition for forfeiture (other than those set out in Part 4 of Schedule 7) provided in the tenancy is void and has no effect" — any forfeiture condition outside Part 4 of Schedule 7 is of no effect.

The harassment offence is Cap. 7 section 120AAZO. Section 116(2)(a) provides that Part IV "shall not apply to any tenancy— (a) to which Part I, II or IVA applies". A regulated tenancy of a subdivided unit is a Part IVA tenancy, so Part IV’s harassment provision (section 119V) does not reach it. The operative provision is section 120AAZO, inside Part IVA itself:

• Section 120AAZO(1) — "If a person unlawfully deprives a tenant of a regulated tenancy for a subdivided unit of occupation of the subdivided unit, the person commits an offence." Section 120AAZO(2) sets the penalties and confines prosecution to indictment — a person who commits the offence "is liable on conviction on indictment by the court": on a first conviction "a fine of $500,000 and to imprisonment for 12 months"; on a second or subsequent conviction "a fine of $1,000,000 and to imprisonment for 3 years".
• Section 120AAZO(3) — doing "any act calculated to interfere with the peace or comfort of the tenant or members of the tenant's household", or persistently withdrawing or withholding services reasonably required for occupation as a dwelling, and — in paragraph (b) — "knows, or has reasonable cause to believe, that that conduct is likely to cause the tenant—" to give up occupation of the subdivided unit or to refrain from exercising any right or pursuing any remedy in respect of it. Penalties in section 120AAZO(4) are the same, and subsection (4) opens with the same words, "is liable on conviction on indictment by the court" — so the subsection (3) offence is likewise indictable only, with no summary route. Note the knowledge element in paragraph (b) — the act alone is not enough.
• Section 120AAZO(5) is a defence: a person does not commit the subsection (3) offence "if the person proves that the person had reasonable grounds for doing the act, or withdrawing or withholding the services, concerned."
• Section 120AAZO(6) allows the court, in addition to sentence, to order compensation to the tenant and a forfeiture payment to the Government.
• Section 120AAZO(7) provides that "subdivided unit" includes part of a subdivided unit, and confines "court" to the Court of First Instance, the District Court or a magistrate.

Statutory compensation on termination comes from Cap. 658 section 45. Section 45(1) sets the amount at "the lesser of the following" — (a) "3 times the monthly rent payable by the tenant under the tenancy immediately before the date on which the termination takes effect"; or (b) the remaining rent under A = B × C, where B is "the monthly rent that would be payable by the tenant under the tenancy had the tenancy not been terminated" and C is "the number of months covering the period beginning immediately after the termination of the tenancy and ending on the expiry of the original term of the tenancy". Section 45(2): where that number is not an integer "it is to be rounded down to the nearest integer". Section 46 preserves the right to make a further claim against the operator under "common law rules or equitable principles".

But there is one key exception, and its source is Cap. 658 section 31: section 31(1) has three paragraphs, all of which must hold. (a) "the term of a domestic tenancy for a subdivided unit (not being an exempted second term tenancy) (original tenancy) begins after the gazettal date, but before the countdown period begins" — section 2 defines the term: "gazettal date (刊憲日) means the date on which this Ordinance is published in the Gazette". (b) Immediately before the countdown period begins the principal flat has a grace-period registration in force while the unit has no BHU recognition. (c) "but for the operation of this subsection and subsection (3), the original tenancy, or another domestic tenancy for the subdivided unit (not being an exempted second term tenancy) (new tenancy), would be subsisting when the countdown period begins" — note that paragraph (c) is not confined to the original tenancy: a new tenancy subsisting when the countdown period begins is caught too, and section 31(3) says so — "The original tenancy or new tenancy (as the case requires) is automatically terminated when the countdown period begins so that it ceases to be in force for all purposes at that time." So reading the rule as meaning a tenancy is safe whenever its first term began on or before the gazettal date overstates it: if a further domestic tenancy for the same unit (not being an exempted second term tenancy) is entered into, that new tenancy is terminated when the countdown period begins. Note that paragraph (a) is bounded at both ends — after the gazettal date and before the countdown period begins. Two important carve-outs: section 31(5) disapplies automatic termination where a BHU recognition application is pending immediately before the countdown period begins, and section 31(6) where such an application has been refused but the appeal period has not expired or an appeal is pending. Beyond section 31's automatic termination, the Ordinance provides six further routes by which the Secretary or an appeal board may direct the termination of a tenancy, not two: section 14(2) (on cancelling a grace-period registration — "If, when a cancellation notice is issued, a domestic tenancy for a subdivided unit in the flat (affected tenancy) is subsisting, the Secretary may, by that notice, direct the termination of the tenancy on the cancellation date so that the tenancy ceases to be in force for all purposes on that date."), section 24(2) (on refusing a renewal application — "If, when the basic-housing-unit (renewal) application is refused, a domestic tenancy for the basic housing unit (affected tenancy) is subsisting, the Secretary may, in addition to refusing the application, direct the termination of the tenancy on a certain date (termination date) so that the tenancy ceases to be in force for all purposes on that date."), section 25(3) (on cancelling a BHU recognition — "If, when a cancellation notice is issued, a domestic tenancy for the basic housing unit (affected tenancy) is subsisting, the Secretary may, by that notice, direct the termination of the tenancy on the cancellation date so that the tenancy ceases to be in force for all purposes on that date."), section 32(2) (a direction by the Secretary), section 33(2) (a direction by an appeal board), and section 41(1) (a direction by the Secretary to terminate a domestic tenancy for a subdivided unit, discussed above, where the Secretary is satisfied that the unit is let in circumstances constituting an offence under section 8(1) or 35(1)). Sections 14(4), 24(5), 25(5), 32(4) and 33(4) each carry a 30-day protection, and each protection carries its own exception: section 32(4) provides that "Unless the basic-housing-unit (recognition) application is refused on the ground mentioned in section 18(2)(e)(iii), the termination date must not fall within the period of 30 days beginning immediately after the date of the refusal notice"; section 33(4) provides that "Unless the appeal board is satisfied that there is an imminent danger or risk to life or property in the subdivided unit, its principal flat or the common parts of its principal building, the termination date must not fall within the period of 30 days beginning immediately after the date of the decision on the appeal."

The split by first-term date below is statutory. Its source is section 31(1)(a) read with section 31(2): "For the purposes of subsection (1), a second term tenancy of a regulated cycle is an exempted second term tenancy if the term of the first term tenancy of the regulated cycle begins on or before the gazettal date." As to which calendar day the gazettal date is: the definition in section 2 says only that it is the date on which the Ordinance is published in the Gazette, but the defined term is asterisked, and the Ordinance text carries an editorial note under the same section reading "Gazettal date: 3 October 2025." The date 3 October 2025 therefore comes from the text of the Ordinance itself. Section 9(1) defines the registration-eligibility window as the 3 months ending on the gazettal date, and the official registration page gives that window as 4 July to 3 October 2025, which agrees. (Section 2(5) provides that "A note in the text of this Ordinance is for information only and has no legislative effect", so the note is informational rather than an enacted provision.) Whether a tenancy is automatically terminated when the countdown period begins (currently 1 September 2029, moving with any extension of the grace period under s.9(4)), if the unit still has no BHU recognition, depends on when the tenancy's first term commenced:

• Tenancies whose first term commenced on or before 3 October 2025: not automatically terminated when the countdown period begins; those tenants continue to enjoy the full four-year (2+2) security of tenure under Part IVA.
• Tenancies whose first term commenced after 3 October 2025: automatically terminated when the countdown period begins, even if the statutory security of tenure has not yet expired. Those tenants may recover compensation from the operator as a civil debt — section 31(4): "The tenant under a tenancy terminated under subsection (3) may, in accordance with Part 7, recover as a civil debt compensation from the operator of the subdivided unit for the termination of the tenancy."

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