Basic Housing Units Ordinance countdown: What landlords should know

1. Background

Recent reports emerged in mid-January 2026 regarding large-scale evictions of tenants living in certain subdivided units (SDUs) in Sham Shui Po. What prompted landlords to evict these tenants en masse?

The answer lies in the Basic Housing Units Ordinance (Cap.658) (BHUO), which will take effect on 1 March 2026.

The BHUO is Hong Kong’s first comprehensive regulatory regime governing the letting of SDUs, which can only be legally let out if they meet minimum living standard conditions and receive formal Basic Housing Unit (BHU) recognition issued by the Secretary for Housing.

Ahead of the legislation coming into effect, some SDU owners evicted tenants to perform necessary renovations on the SDUs to comply with the BHUO, resulting in the large-scale evictions in Sham Shui Po.

Given the impending implementation of the BHUO, this is a timely opportunity to remind stakeholders of its key features.

2. Summary of the BHUO

(A) What falls under the scope of the BHUO?

The BHUO applies only to SDUs. An SDU is defined as:

1. a flat in a domestic building partitioned in a way not shown in the approved building plans of the building;
2. after the partition, there are 2 or more compartments in the flat;
3. among the compartments, at least 2 compartments are the subject of separate domestic tenancies; and
4. among the compartments that are the subject of separate domestic tenancies, at least 1 is formed by the partition.

(B) What are the requirements to obtain BHU recognition? 

An SDU must obtain BHU qualification before it can be legally let out. To obtain BHU qualification, it must meet the following minimum standards of living conditions (all captured in Schedule 1 to the BHUO):

1. Internal floor area: at least 8 m²;
2. Height: at least 2.3 m (from floor to ceiling) and, if there is a beam in the SDU, at least 2 m (from floor to underside of the beam);
3. Fire safety: comply with the requirements under paragraph 3 of Schedule 1 of the BHUO, such as inter alia providing adequate means of escape for safe evacuation;
4. Loading: the SDU and its principal flat must not be subject to a load beyond each of their proper bearing capacity;
5. Toilet: the SDU must have an enclosed and waterproofed toilet for exclusive use by its occupier;
6. Water supply point and sink: the water supply point and sink must be provided outside the toilet of the SDU, and its surrounding area must be waterproofed;
7. Lighting and ventilation: the SDU must comply with the requirements under paragraph 7 of Schedule 1 of the BHUO, such as, inter alia, providing at least 1 openable window, artificial lighting and mechanical means of ventilation in the SDU; and
8. Water and electricity meters: the SDU must be provided with a water meter and electricity meter exclusive to that SDU.

(C) What steps must owners of SDUs take to obtain BHU recognition?

If an SDU was the subject of a domestic tenancy at any time between 4 July 2025 and 3 October 2025, the owners of the flat containing such SDUs may apply for grace-period registration in respect of the flat. Such registration would provide the owner with a 36-month grace period (from 1 March 2027 to 28 February 2030), during which they may let out their SDU.

To apply for BHU recognition, the owner of the SDU must submit an application to the Housing Bureau in accordance with section 17 of the BHUO, including inter alia a report by a specified professional (such as registered architects, registered professional engineers and registered professional surveyors) certifying that, in his opinion, the SDU meets the minimum standards of living under Schedule 1 of the BHUO, after conducting an on-site inspection of the SDU. Each BHU recognition is valid for 5 years, subject to renewal or cancellation. Applications for BHU recognition may be made beginning on 1 March 2026.

Owners of SDUs should take timely and proactive steps to ensure compliance because, beginning 1 March 2027, it will be a criminal offence for an owner to let out an SDU with neither grace-period registration nor BHU recognition.

3. Tenant safeguards under the Landlord and Tenant (Consolidation) Ordinance (Cap.7) (LTO)

The LTO provides tenants of SDUs with certain safeguards, including:

1. 4-year security of tenancy (an SDU tenancy is deemed to be for a term of 2 years, followed by a deemed offer from the landlord for a second tenancy for a term of 2 years);
2. tenant’s right to demand written tenancy agreement;
3. restrictions on the amount of rental deposit; and
4. restrictions on the amount of rental increment.

The above protections remain in place and are unaffected by the BHUO. Furthermore, given that an SDU tenancy is deemed to be for 2 terms of 2 years, subject to the following paragraphs, a landlord has no right to evict an SDU tenant before the end of the tenancy (i.e. maximum period of 4 years), whether such eviction is for the purposes of upgrading the SDU to comply with the BHUO or otherwise.

A tenancy for an SDU may be terminated in the following circumstances before its expiry:

1. pursuant to the LTO, a landlord may terminate a tenancy for an SDU before the expiration of the 4-year tenancy period by re-entry into the premises only if the tenant:
   1. fails to pay rent by the due date;
   2. makes, or permits to be made, any structural alteration to the SDU without the landlord’s prior written consent;
   3. uses the SDU or permits the SDU to be used for any immoral or illegal purposes;
   4. does anything, or permits anything to be done, in the SDU which would cause any unnecessary annoyance, inconvenience or disturbance to the landlord or any other person; or
   5. assigns or underlets or otherwise parts with possession of the whole of the SDU or, without the landlord’s prior written consent, underlets part of the SDU to another person; and
2. pursuant to the BHUO, if a tenancy for an SDU begins between 4 October 2025 and 31 August 2029 and, as of 31 August 2029, a grace-period registration has been granted in respect of the flat containing the SDU (but the SDU has not been granted BHU recognition), that tenancy will be automatically terminated as of 1 September 2029. Nothing in the LTO would prevent that tenancy from termination by operation of law but, under section 31(4) of the BHUO, the tenant of such terminated tenancy may recover civil debt compensation from the operator of the SDU.

4. Illustration

By way of illustration, assuming a flat is partitioned into two SDUs (SDU A and SDU B), if SDU A was subject to a domestic tenancy beginning on 3 October 2025, under the BHUO the owner of the flat may apply for the 3-year grace-period registration in respect of the flat, beginning on 1 March 2026.

(A) Automatic termination of tenancy for SDU B

If a domestic tenancy for SDU B begins at any time between 4 October 2025 and 31 August 2029 and, as of 31 August 2029, a grace-period registration has been granted in respect of the flat, but no BHU recognition has been granted in respect of SDU B, that tenancy will be automatically terminated as of 1 September 2029.

(B) Continuation of tenancy for SDU A

Given that the domestic tenancy for SDU A began on 3 October 2025, under the LTO, it will be deemed to be for a term of 2 years (from 3 October 2025 to 2 October 2027), followed by a deemed offer from the landlord and deemed acceptance by the tenant for a second tenancy for a term of 2 years (from 3 October 2027 to 2 October 2029).

If, as of 31 August 2029, a grace-period registration has been granted in respect of the flat, but no BHU recognition has been granted in respect of SDU A, the tenancy of SDU A will be allowed to proceed until its expiration on 2 October 2029 (i.e. beyond the automatic termination date of 1 September 2029 prescribed under the BHUO).

5. Further recommendations: coordination efforts

Given the wide‑ranging impact of the BHUO, its effective implementation will require close coordination with various government and community bodies. Owners of SDUs should proactively liaise with the Housing Bureau, which is the primary body responsible for administering BHU recognition, to facilitate compliance matters.

District service teams and charitable organisations can also provide on‑the‑ground assistance to support displaced tenants with relocation or application for transitional housing. Such collaborative efforts would help to ensure smooth administration of the BHUO and mitigate hardship for affected tenants.

The BHUO is a milestone on Hong Kong’s path to providing better housing for its population. However, its smooth and effective implementation will rely on the coordination and proactive collaboration of multiple stakeholders, owners of SDUs, and the government.