Industry rep says landlords face high cost renovating subdivided units as new law takes effect

2026-03-02 - 23:35

An industry representative has said he is likely to spend some HK$160,000 to refit doors in a single flat and pay inspection fees, as the registration scheme for subdivided units took effect on Sunday. Hayson Chan of the Hong Kong Basic Housing Units Operators Association, on February 14, 2025. Photo: Kyle Lam/HKFP. Hayson Chan, chair of the Hong Kong Basic Housing Units Operators Association and business development director of rental company Rent to Rent Innovation, spoke with RTHK on Monday. He said that to comply with the new law, he had spent up to HK$60,000 refitting smoke-sealed doors for subdivided units in a single flat and may have to shell out another HK$100,000 in inspection fees. Some other operators said they had to spend millions to comply with the new law. Under the Basic Housing Units Ordinance, passed in September, subdivided units are required to meet government-set living standards. These include a floor space of at least 86 square feet, a ceiling height of 2.3 metres, as well as windows and an individual toilet. The law, which kicked in Sunday, also requires landlords to register their units if they want to continue leasing them legally. Owners whose flats are registered will get a three-year grace period until the end of February 2030 to make renovations and meet the law’s requirements. About a third of the city’s 110,000 subdivided homes will require significant repairs before they can be registered as Basic Housing Units, according to the government. Code of practice Chan told RTHK that only days ago, he received a copy of a code of practice, dated March 2026, requiring operators to refit their flats with doors that meet smoke-sealing requirements, each costing about HK$10,000. A subdivided unit. Photo: Kyle Lam/HKFP. “It needs to be clear on what they actually need us to do,” he added. In addition, he said he would have to hire surveyors and plumbers, among other professionals, to inspect the subdivided units, adding that it would cost HK$100,000 to inspect an entire flat and install water and electricity meters. To renew registrations, inspections must be conducted every five years. Asked whether he hopes to recoup the renovation costs by charging higher rents, Chan said that would depend on whether tenants could afford it. “Of course, we would want to pass on the extra costs to the market, but we also need to see if the market can take it,” he said. “If rent [for a subdivided unit] goes above HK$10,000, nobody will want to rent it.” About 80,000 compliant units are expected to remain in the market once the substandard ones are phased out, while supply is estimated to fall by 30 per cent. In December, before the registration scheme began, landlords gave more than 200 families at Yee Wa Building in Sham Shui Po three months to move out. The Housing Bureau deployed NGOs, including the Lok Sin Tong Benevolent Society, to assist the evicted families. Resettlement efforts are still ongoing.