Serviced Apartment Agreement (Hong Kong)

A Serviced Apartment Agreement in Hong Kong sets out the rights and obligations the parties agree to be bound by.

Hong Kong's serviced apartment sector is one of the most developed in Asia. Operators including Shama, The Harbourview, Great Eagle Holdings' serviced apartment brands, and international chains such as Ascott, Oakwood, and Fraser Suites operate across Hong Kong Island, Kowloon, and the New Territories. Demand comes predominantly from expatriate professionals on corporate assignments, business travellers requiring medium-term accommodation (one to twelve months), and individuals undergoing home renovation or relocation. Corporate clients frequently use serviced apartment agreements to house incoming staff, with the employer as the contracting party and the employee as the authorised occupier.

The legal nature of the arrangement is the most important threshold question. A tenancy arises where the occupier has exclusive possession of the premises for a defined term — the hallmark test established in Street v Mountford [1985] AC 809, applied by Hong Kong courts. A tenancy created by a Serviced Apartment Agreement is subject to Cap. 7, which governs rights and obligations of landlords and tenants including notice requirements, forfeiture procedures, and the Lands Tribunal's jurisdiction. Tenancies are also subject to stamp duty under the Stamp Duty Ordinance (Cap. 117) at rates based on the annual rental value and term.

A licence arises where the operator retains overall control and the occupier does not have exclusive possession — characteristic of arrangements where the operator's staff have regular access to the unit for housekeeping, maintenance, and service delivery, and where the short-term, transient nature of the stay indicates a hotel-like relationship rather than a residential tenancy. Licences are not subject to the tenancy provisions of Cap. 7 and are not subject to tenancy stamp duty. However, courts will characterise the arrangement by its substance rather than its label — calling an agreement a 'licence' does not make it one if the occupier in practice has exclusive possession.

Operators providing accommodation to guests on a transient, short-term basis — typically stays of less than one month — may require a licence under the Hotel and Guesthouse Accommodation Ordinance (Cap. 349), administered by the Office of the Licensing Authority under the Home Affairs Department. Unlicensed operation under Cap. 349 is a criminal offence. The Conveyancing and Property Ordinance (Cap. 219) is also relevant to any agreement that deals with rights over immovable property in Hong Kong.

All fees under a Hong Kong Serviced Apartment Agreement are expressed in Hong Kong Dollars (HKD). No goods and services tax (GST) or value-added tax (VAT) applies in Hong Kong, simplifying the fee structure compared to serviced apartment agreements in Singapore (9% GST) or the United Kingdom (20% VAT). Management fees, utilities charges, and service levies are separate line items that must be clearly documented to avoid disputes and to correctly calculate stamp duty on the rent component.

A Serviced Apartment Agreement in Hong Kong is needed whenever an operator lets furnished residential accommodation with integrated services to an occupier, and whenever an individual, corporate employer, or relocation company arranges such accommodation for personal or business purposes.

A Serviced Apartment Agreement is needed when a company relocates an employee to Hong Kong. Corporate relocations are the most common use case for serviced apartment agreements in Hong Kong. Multinational employers routinely house incoming executives and specialists in serviced apartments during their initial assignment period, with the company as the contracting party paying the fees and the employee as the authorised occupier. The agreement should identify both the corporate client and the named occupier, address the employer's obligations if the employee departs early, and include provisions for subletting or transferring the agreement to a replacement occupier.

A Serviced Apartment Agreement is needed for medium-term residential stays. Individuals who require furnished accommodation for periods of one to twelve months — during home renovation, while awaiting permanent housing, or during a transitional period between residences — need a written agreement that documents the services included, the fee, the deposit, and the early termination rights. Without a written agreement, disputes about what services were promised and what charges are due on early departure are difficult to resolve.

A Serviced Apartment Agreement is needed to establish stamp duty obligations. If the arrangement creates a tenancy (exclusive possession), stamp duty under Cap. 117 is payable within 30 days of execution. The agreement must clearly separate the rent component (subject to stamp duty) from service charges and management fees (which may be excluded). A correctly structured and stamped agreement is admissible in court; an unstamped tenancy agreement is not admissible until the deficiency and penalty are paid to the Inland Revenue Department (IRD).

A Serviced Apartment Agreement is needed when an operator wants clarity on Cap. 349 compliance. Operators providing short-term accommodation must hold a valid licence under the Hotel and Guesthouse Accommodation Ordinance (Cap. 349). The form of agreement used — tenancy or licence — affects both the regulatory classification and the operator's exposure to rent control and tenancy protection provisions under Cap. 7.

A Serviced Apartment Agreement is needed for corporate housing programmes. Companies maintaining a pool of serviced apartments for rotating staff need standardised agreements that address assignment and subletting, employer liability for damage, and renewal rights. A well-drafted template used consistently across all corporate placements reduces administrative risk and confirms compliance with stamp duty obligations.

A Serviced Apartment Agreement is also needed when disputes arise about service standards. If an occupier claims that the services provided fell below what was promised — inadequate housekeeping, facilities not delivered, security failures — the written agreement is the primary document for resolving the dispute, including through the Lands Tribunal (for tenancy disputes) or the District Court.

A Hong Kong Serviced Apartment Agreement should include the following key elements to protect both the operator and the occupier and to comply with applicable Hong Kong legislation. Section 5 of the Hotel and Guesthouse Accommodation Ordinance (Cap. 349) requires operators of short-stay accommodation to hold a licence from the Office of the Licensing Authority; Section 119 of the Landlord and Tenant (Consolidation) Ordinance (Cap. 7) governs the Lands Tribunal's jurisdiction over tenancy disputes; Section 13 of the Stamp Duty Ordinance (Cap. 117) requires tenancy agreements to be stamped within 30 days of execution; Section 4 of the Mediation Ordinance (Cap. 620) encourages mediation before Lands Tribunal proceedings; and Section 6 of the Conveyancing and Property Ordinance (Cap. 219) sets formal requirements for dispositions of interests in land. The Lands Tribunal, the Inland Revenue Department (IRD), the Office of the Licensing Authority under the Home Affairs Department, the Land Registry, the Rating and Valuation Department, operators including Shama Serviced Apartments, Ascott, Oakwood, Fraser Suites, and Great Eagle Holdings, and the District Court are the key institutional bodies and market participants overseeing serviced apartment arrangements in Hong Kong Island, Kowloon, and the New Territories.

Parties and Identification: Full legal name of the operator (company registration number if a company) and the occupier (HKID number for individuals, or company registration number for corporate clients). Where the contracting party is a corporation and the occupier is an employee, both should be identified with their respective roles stated clearly.

Premises Description: Unit number, floor, building name, address, and approximate floor area (in square feet, consistent with Hong Kong market convention). Any specific furnishings, fixtures, or appliances included in the agreement should be referenced by an attached inventory. The Lands Registry lot number may be included for completeness, consistent with Conveyancing and Property Ordinance (Cap. 219) requirements for property descriptions.

Characterisation: An express statement of whether the agreement is intended to create a tenancy (exclusive possession, Cap. 7 applies) or a licence (no exclusive possession, operator retains control). This characterisation affects stamp duty, termination rights, and regulatory obligations under the Hotel and Guesthouse Accommodation Ordinance (Cap. 349).

Term: Start date, end date, and any renewal or extension options. For tenancies, the term determines the applicable stamp duty rate under Cap. 117. Renewal options should specify whether they are exercisable unilaterally by the occupier or require mutual agreement.

Fees and Charges: The monthly accommodation fee in HKD (no GST or VAT), the service charge (if separately itemised), any utilities charges (electricity, water, gas, internet), and any additional charges for optional services. Stamp duty is calculated on the rent component — proper separation of rent from services is essential for correct stamp duty assessment by the Inland Revenue Department (IRD).

Deposit: The deposit amount (typically two months' fee), the conditions for its retention (damage beyond fair wear and tear, unpaid fees), and the timeline for return after expiry of the agreement (typically within 14–30 days of the occupier's departure and the operator's inspection).

Services Schedule: A detailed schedule listing all services included in the fee — housekeeping frequency (daily, weekly, bi-weekly), linen and towel changes, concierge availability, gym and pool access, Wi-Fi, cable TV, mail handling — and identifying any services available at additional cost. Disputes about service levels are most effectively resolved by reference to a detailed services schedule rather than general descriptions.

House Rules: Building rules on noise, guests, smoking, pets, common area usage, and move-in/move-out procedures. House rules are incorporated into the agreement by reference and form part of the contractual obligations of the occupier.

Maintenance and Repairs: The operator's obligations to maintain the unit in habitable condition, repair structural defects and appliance failures, and respond to maintenance requests within defined timeframes. The occupier's obligations to report damage promptly and not to make alterations to the premises.

Termination: Notice periods for termination by either party (typically 30–60 days for periodic agreements, with early termination fees for fixed-term agreements), the consequences of early termination including any forfeiture of deposit or payment of a break fee, and grounds for immediate termination (non-payment of fees, illegal use, serious breach of house rules).

Stamp Duty Allocation: If the agreement creates a tenancy, confirmation of which party bears the stamp duty obligation. Under Hong Kong convention, stamp duty on tenancy agreements is typically shared equally between landlord and tenant, but this is a matter of agreement.

Governing Law and Dispute Resolution: The laws of the Hong Kong SAR as governing law, with jurisdiction of the Lands Tribunal (for tenancy disputes under Cap. 7), the District Court (for claims up to HK$3,000,000), or the Court of First Instance for higher-value claims. Mediation under the Mediation Ordinance (Cap. 620) is recommended before litigation.

forms-legal.com provides a Serviced Apartment Agreement template suitable for both individual and corporate occupiers, with customisable services schedules and stamp duty provisions consistent with Cap. 7 and Cap. 117 requirements.