Tenants of Hong Kong subdivided flats still plagued by unfair contractual arrangements and opaque charges, activist group says

Tenants of Hong Kong’s notorious subdivided flats are still plagued by unfair contractual arrangements and opaque charges despite the launch of a rent control scheme two years ago, a concern group has said. A survey on the rental conditions of subdivided flats across the city found that more than 70 per cent of respondents risked being overcharged for utilities while nearly half had not signed any physical contracts, according to the Concerning Subdivided Units Alliance on Saturday. Many of the tenants feared voicing out about exploitative practices suffered under the hands of landlords, said Thomas Tong Sheung-man, a member of the alliance. “Tenants are sacrificing their rights and protection under the tenancy control agreement in exchange for lower rent,” he said. “We are disheartened by this situation.” Under the government’s 2022 tenancy control scheme, landlords and tenants of subdivided flats have to sign an agreement spelling out the rent, deposit, utility charges and fees for breaches. Rent increases for subsequent contracts are also capped at 10 per cent or according to annual percentage change laid out in an index on rent levels of private properties set out by the Ratings and Valuation Department. Landlords are also banned from collecting additional charges besides utility fees. Those overcharging utility fees face fines of at least HK$10,000 (US$1,279). But the survey found that 35 per cent of respondents did not have any form of contract with their landlord since the expiration of their previous agreement, while 8 per cent only confirmed the details of their tenancy by word of mouth. Hong Kong’s first government ‘community living room’ opens to subdivided flat tenants For those who had a physical contract with their landlord, over half of them did not have it stamped, meaning tenants could not use it as evidence, should they have a dispute in the future. While the government’s control bill did not outlaw the use of oral contracts for subdivided flats, the lack of a formal tenancy document would make it difficult for tenants to seek redress over rental conditions, the alliance said. The survey also found that most landlords did not show tenants a copy of official electricity and water statements when charging for utilities. More than 70 per cent of respondents said they had not seen the electricity bill, while nearly 78 per cent of respondents said they had not seen the water bill. Yuen On-ching, a member of the alliance, said such opaque practices were illegal under the tenancy control agreement. Outreach offers Hongkongers in subdivided flats health checks, social support “Contracts often don’t list out how utilities are collected, and that the landlord has to show the actual bill when collecting payments,” she said. For a 69-year-old resident surnamed Ho, who has lived in a subdivided flat in Sai Wan Ho for 15 years, the opacity of utility charging and the lack of a contract has been frustrating. She does not boil water or cook in her flat for fear of causing a power outage. She also lives with a faulty water heater, window and power socket, as her landlord refuses to fix them. But Ho was still charged HK$80 for water use and miscellaneous charges separately per month, as well as an electricity bill starting with HK$1.80 per kilowatt-hour. HK Electric, which serves Hong Kong and Lamma islands, charges 119.5 HK cents per kilowatt-hour. The Water Services Department tallied an average monthly bill of HK$55 for the city’s residential households in the 2020-2021 financial year. Hong Kong to set minimum standards for subdivided flats: housing chief “When I asked the landlord to sign a standard contract, he told me that I should move out if I don’t like the arrangement, as there are others who are willing to rent my flat,” Ho said. Members of the alliance urged the government to step up law enforcement against landlords and mandate the use of a unified standard contract in paper form to protect tenants. More than 215,700 people are still living in subdivided flats in land-scarce Hong Kong, while about 132,000 households are in the queue for a public housing flat that has an average waiting time of 5.6 years. Secretary for Housing Winnie Ho Wing-yin wrote on her Facebook page on Saturday that 17 landlords had been fined a total of HK$32,000 a day before for failing to submit a document stating tenancy details to the government within 60 days, adding that 104 landlords had been convicted since the tenancy control bill came into force. “The Ratings and Valuation Department will continue to take resolute law enforcement action to tackle any violations. This will send landlords of subdivided flats a strong message that they must abide by the regulations under the bill to protect the rights of tenants,” the minister wrote.