Tenancy Rules for Hong Kong Agents (SQE/EAQE)
Checked against official sources: 11 Oct 2026. Rules, fees and dates change, so confirm anything time-sensitive on eaa.org.hk.
Leasing and tenancy is a level 3 topic in the SQE syllabus (Part 6) and level 4 in the EAQE (Part 7), and it has its own Part II case type. In 2026 it is also the part of the syllabus that has changed most. The Basic Housing Units Ordinance (Cap. 658) came into force on 1 March 2026, and the EAA issued Circular No. 26-01 (CR) on letting subdivided units. This guide covers the forms, stamp duty, Form CR109, the Part IVA rules for subdivided units, and the new regime, as at 11 October 2026.
The forms in a letting
| Form | Between the agent and | When |
|---|---|---|
| Form 5 (estate agency agreement, leasing) | Landlord | Within 7 working days after accepting instructions, or before advertising, or before the lease is signed, whichever is earliest |
| Form 6 (estate agency agreement, leasing) | Tenant | Before arranging an inspection, or before the lease is signed, whichever is earlier |
| Form 2 (Leasing Information Form) | Given to the landlord; and to the tenant unless waived | Landlord: before Form 5 or before the lease, at the landlord’s option |
Two exclusions matter in leasing: no prescribed form is needed to let a unit that is not self-contained (no separate cooking facilities and bathroom), or a car parking space on its own. Form 6 recommends a validity period of not more than 3 months. Full details are in Forms 3 to 6 and Forms 1 and 2.
Two more rules from the Practice Circulars: never let clients sign a provisional tenancy agreement or tenancy agreement with essential terms left blank, and get both parties’ consent to amend a signed one (Circular No. 15-04 (CR)). The landlord’s agent must also do a land search immediately before the tenancy agreement and give the tenant a copy (Circular No. 13-03 (CR)).
Stamp duty on tenancies
| Lease term | Duty |
|---|---|
| Not defined or uncertain | 0.25% of the yearly or average yearly rent |
| Up to 1 year | 0.25% of the total rent for the term |
| Over 1 year, up to 3 years | 0.5% of the yearly or average yearly rent |
| Over 3 years | 1% of the yearly or average yearly rent |
Stamp within 30 days of signing. Late stamping can cost up to 2, 4 or 10 times the duty, depending on how late (IRD tenancy stamping FAQ). Example: a 2-year lease at HK$16,500 a month has yearly rent HK$198,000, so duty is HK$990. See the stamp duty guide.
Form CR109 and the landlord’s right to sue
For a new letting or renewal, the landlord lodges Form CR109 (Notice of New Letting or Renewal Agreement) with the Commissioner of Rating and Valuation within 1 month. Late lodging costs HK$310. Until the form is endorsed, the landlord cannot sue to recover rent (Landlord and Tenant (Consolidation) Ordinance (Cap. 7); RVD Summary Guide, checked 11 Oct 2026).
The trap
Ordinary domestic tenancies (Cap. 7, Part IV)
- No statutory security of tenure for domestic tenancies created on or after 9 July 2004. They end according to their terms or by agreement.
- Implied forfeiture grounds where the lease is silent: rent unpaid 15 days after it is due; immoral or illegal use; unnecessary annoyance (including persistently late rent); structural alterations without consent.
- Rent receipts are mandatory.
- Harassment or unlawful eviction: up to HK$500,000 and 12 months for a first conviction, HK$1,000,000 and 3 years for a later one.
Source: RVD, A Summary Guide on the Landlord and Tenant (Consolidation) Ordinance, checked 11 Oct 2026. The syllabus also covers the parties’ basic rights and duties: the tenant’s exclusive possession and quiet enjoyment, paying rent and giving back possession, the landlord’s structural and exterior repairs, and ending a tenancy by expiry, agreement or a break clause.
Subdivided units: Part IVA (from 22 January 2022)
Part IVA of Cap. 7 regulates domestic tenancies of subdivided units (SDUs) that began on or after 22 January 2022, where the tenant is a natural person living there.
| Rule | Part IVA regulated tenancy |
|---|---|
| Security of tenure | 2-year first term plus 2-year second term: 4 years in total. Second-term offer on Form AR1 |
| Tenant ending early | At least 30 days’ written notice, not ending before the last day of the first year |
| Rent during a term | No increase (the landlord may reduce it) |
| Second-term rent increase | Capped at the lower of the RVD rental index change or 10% |
| What the landlord may take | Rent; a deposit of no more than 2 months’ rent; utility charges not above the apportioned amount; damages for breach |
| Stamp duty | Borne by the landlord alone |
| Notice of tenancy | Landlord files Form AR2 with the RVD within 60 days of the term starting |
What Circular No. 22-01 (CR) requires of agents
- Disclose whether you act for the landlord, the tenant or both, in writing at the first opportunity, with the tenant’s acknowledgement. In dual agency, disclose the commission from each side.
- Explain security of tenure, the rent rules and the implied terms, and give the summary of mandatory terms.
- Advise a written tenancy.
- The landlord’s agent arranges stamping and Form AR2 within 60 days, unless the landlord opts out in writing.
- A licensee who is also the landlord must not take commission from the tenant.
Basic Housing Units Ordinance (Cap. 658): in force
Cap. 658 was gazetted on 3 October 2025 and commenced on 1 March 2026. It moves SDUs in residential flats towards a recognition system with minimum standards.
| Date | What happens |
|---|---|
| 1 Mar 2026 – 28 Feb 2027 | Registration Period: free registration of flats with pre-existing SDUs (an SDU tenancy existing between 4 Jul and 3 Oct 2025) |
| 1 Mar 2027 | Offence of unauthorised letting of an SDU commences |
| 1 Mar 2027 – 28 Feb 2030 | Grace Period (36 months) for registered flats to obtain recognition |
| 1 Sep 2029 – 28 Feb 2030 | Countdown Period: no new lettings of unrecognised SDUs in registered flats |
| 1 Sep 2029 | Unrecognised SDU tenancies in registered flats that began after 3 Oct 2025 end automatically |
Minimum standards for a recognised basic housing unit include an internal floor area of at least 8 square metres, a clear headroom of at least 2.3 metres, an openable window to external air, its own enclosed toilet, and separate water and electricity meters. Recognition lasts 5 years. Unauthorised letting from 1 March 2027 carries up to HK$300,000 and 3 years’ imprisonment, plus HK$20,000 a day while it continues.
Circular No. 26-01 (CR): duties for agents
- Effective 1 March 2026; some paragraphs take effect on 1 March 2027 with the letting offence.
- When letting SDUs between 1 March 2026 and 28 February 2027, give the parties written reminders about registration, recognition, automatic termination on 1 September 2029, and the Countdown Period.
- Do not take part in any unauthorised letting.
- Keep following Circular No. 22-01 (CR) on Part IVA tenancies.
Not yet settled
Practice scenario (fictional)
In April 2026, Jason acts for a landlord letting an SDU in a Sham Shui Po flat to Mr Lam for 2 years at HK$5,200 a month. The landlord asks for a 3-month deposit and wants Mr Lam to pay the stamp duty.
Answer: under Part IVA the deposit cannot exceed 2 months’ rent (HK$10,400), and the landlord alone bears stamp duty. Jason arranges stamping and Form AR2 within 60 days unless the landlord opts out in writing, and, because this is an SDU letting during the Registration Period, gives written reminders under Circular No. 26-01 (CR) about registering the flat under Cap. 658.
Takeaway
Sources: RVD Summary Guide on Cap. 7, RVD tenancy FAQ, Circular No. 22-01 (CR), Circular No. 26-01 (CR), bhu.gov.hk and IRD IRSD123.
Frequently asked questions
What is Form CR109?
The Notice of New Letting or Renewal Agreement. The landlord lodges it with the Rating and Valuation Department within 1 month; until it is endorsed, the landlord cannot sue to recover rent.
Who pays stamp duty on a subdivided unit tenancy?
For a Part IVA regulated tenancy of a subdivided unit, the landlord alone bears the stamp duty.
When did the Basic Housing Units Ordinance take effect?
Cap. 658 commenced on 1 Mar 2026. The offence of unauthorised letting of a subdivided unit starts on 1 Mar 2027.
How long is security of tenure for a subdivided unit?
Under Part IVA of Cap. 7, a regulated tenancy runs for a 2-year first term and a 2-year second term: 4 years in total.
Study notes for this guide
- Leasing and tenancy (SQE)
- Leasing and tenancy (EAQE)
- Case studies: leasing (SQE)
- Case studies: leasing (EAQE)
Put it into practice
Exam-style questions for the EAA SQE and EAQE, with worked explanations and timed mocks in the real Part I and Part II format.
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Start practising →Independent exam practice. Not affiliated with or endorsed by the Estate Agents Authority (EAA) or the examination administrator. This guide is general information for exam preparation, not legal advice.