Service Charge Notice (Hong Kong)

A Service Charge Notice in Hong Kong communicates a required notification and the action or deadline that follows from it.

The Building Management Ordinance (Cap. 344) governs the formation and operation of Owners' Corporations in Hong Kong and sets out the framework for levying and collecting management fees. An Owners' Corporation incorporated under Section 8 of Cap. 344 has the statutory power to levy contributions from all unit owners to fund the management and maintenance of common areas and shared building systems. The management fee is calculated by reference to the management shares allocated to each unit under the Deed of Mutual Covenant (DMC) registered at the Land Registry.

Service charges in Hong Kong typically cover a range of building operating costs: staff wages for security guards, cleaners, and building management personnel; electricity and water for common areas; maintenance contracts for lifts, fire protection systems, and CCTV; building insurance; and professional management company fees. For older buildings subject to the Mandatory Building Inspection Scheme (MBIS) under Cap. 123, the service charge budget may also include contributions to a building maintenance fund for major structural repairs.

The Rating and Valuation Department administers government rates under the Rating Ordinance (Cap. 116), which are levied on the occupier of each unit separately and should not be confused with management fees. Similarly, Government Rent under the Government Rent (Assessment and Collection) Ordinance (Cap. 515) is payable by the registered owner and is distinct from service charges.

Forms-legal.com provides a professionally structured Service Charge Notice template that documents all required particulars, giving Owners' Corporations and management companies a clear and compliant basis for notifying unit owners of their payment obligations.

The Property Management Services Ordinance (Cap. 626) requires property management companies providing services to residential buildings to be licensed by the Property Management Services Authority (PMSA). A Service Charge Notice issued by a licensed management company under Cap. 626 must comply with the PMSA's Code of Conduct, which requires transparency in fee disclosure and accurate accounting. Forms-legal.com provides a Service Charge Notice template that meets the transparency standards expected by the Building Management Ordinance (Cap. 344) and the PMSA.

The Property Management Services Ordinance (Cap. 626) — which came into full force in 2020 — introduced a licensing regime for property management companies operating in Hong Kong. Property management companies managing buildings with 50 or more residential or mixed units must hold a licence from the Property Management Services Authority (PMSA). Licensed property managers are subject to a Code of Practice issued by the PMSA, which includes standards for financial transparency, service charge accounting, and the communication of service charge information to owners and occupants. A Service Charge Notice prepared in accordance with the PMSA Code of Practice and the Building Management Ordinance (Cap. 344) provides owners with the transparent financial information they are entitled to receive.

A Service Charge Notice in Hong Kong is needed whenever an Owners' Corporation, management committee, or appointed property management company needs to formally notify unit owners of the service charges payable for their unit. The notice is typically issued monthly, coinciding with the billing cycle, and specifies the amount due, the period covered, the due date, and the accepted payment methods — bank transfer, FPS, or cheque.

Beyond routine monthly billing, a Service Charge Notice is needed when the annual budget for the building is revised following approval at the Annual General Meeting (AGM) under Cap. 344 — in which case a revised notice should be issued to all owners setting out the new fee schedule effective from the new financial year. A separate notice is required when the management committee decides to levy a special levy for capital works — such as facade repairs, lift replacement, or waterproofing under an MBIS order from the Buildings Department — that are not covered by the regular management fee.

For buildings subject to the Mandatory Building Inspection Scheme (MBIS) under Cap. 123, the Buildings Department issues statutory notices requiring inspection and repair. Compliance costs can be substantial, and an Owners' Corporation may issue a special levy notice to collect contributions from all unit owners proportionate to their management shares under the Deed of Mutual Covenant. Property management companies such as Jones Lang LaSalle, Savills, and Knight Frank routinely prepare these notices on behalf of Owners' Corporations under their management contracts governed by the Property Management Services Ordinance (Cap. 626).

Where a unit owner is in arrears of management fees, a formal written demand — which may take the form of a Service Charge Notice marked as a final demand — is an important precondition before the Owners' Corporation commences proceedings in the Lands Tribunal under Section 27A of Cap. 344 to register the unpaid fees as a charge on the unit. The notice provides contemporaneous evidence that the owner was properly informed of the amount due before legal action was commenced, which the Lands Tribunal considers in making costs orders.

For new developments completed in the preceding 12 months, the developer typically sets the initial management fee schedule and appoints the first management company. Once the owners' corporation is formed and holds its first Annual General Meeting under Cap. 344, the owners may review and revise the management fee structure. A Service Charge Notice is needed to document any changes from the developer's initial schedule and to provide owners with the basis for the revised charges.

For buildings managed by the Hong Kong Housing Society or the Housing Authority — including subsidised sale and rental estates — service charge notices are issued under the respective authority's management framework, distinct from the private sector Cap. 344 regime. Private developers and owners' corporations in the private sector follow the Building Management Ordinance and Cap. 626 frameworks exclusively.

A Service Charge Notice for a Hong Kong building under Cap. 344 should contain the following key elements to be clear, compliant, and enforceable.

Issuing Body: Full name of the Owners' Corporation or management company issuing the notice, including the building name and address. Where the notice is issued by an appointed property management company, the company's name and licence number under the Property Management Services Ordinance (Cap. 626) should be stated.

Recipient: Full name of the unit owner or occupier, and the unit address including floor and unit number, with the management share allocation under the DMC.

Billing Period: The start and end dates of the period for which the service charge is levied — typically one calendar month.

Service Charge Amount: The monthly management fee in HKD, broken down where appropriate into the management fund contribution and any special levy or building maintenance fund contribution. The calculation based on management shares should be shown.

Due Date: The date by which payment must be made. Most Hong Kong buildings require payment by the 7th or 10th of the month.

Payment Method: Bank account details, FPS identifier, or other payment method accepted by the Owners' Corporation or management company. Electronic payment methods are now standard in most buildings managed by professional companies such as Jones Lang LaSalle, CBRE, and Colliers.

Arrears: Any outstanding balance from previous periods, with a breakdown of the principal amount and any interest or administrative surcharges authorised by the DMC or management rules.

Contact Details: The name, phone number, and email address of the management office for enquiries.

Consequences of Non-Payment: A statement that failure to pay may result in proceedings under Section 27A of Cap. 344 or referral to the Lands Tribunal.

Signature: Signed or authorised by the chairperson of the Owners' Corporation, the management committee, or the designated management company representative.

Service Charge Budget: A summary of the annual management budget approved at the most recent Annual General Meeting of the owners' corporation under Cap. 344, showing total income (management fees, government grants if any, interest income) and total expenditure (staff costs, insurance premiums, maintenance contracts, utilities for common areas, management company fee, sinking fund contributions).

Individual Unit Calculation: The formula used to calculate each unit owner's share of the service charge — typically based on the undivided share (UDS) allocated to each unit under the DMC registered at the Land Registry, or a flat rate per square foot of gross or saleable floor area.

Special Levy: If a special levy is being raised for a specific capital expenditure item (major repair, lift replacement, facade restoration), the notice should identify the item, the total cost estimate (supported by a professional assessment from an HKIS-certified building surveyor), the total special levy amount, each owner's share, and the payment schedule.

Arrears Consequences: A statement that unpaid service charges accrue interest at the rate specified in the DMC or as determined by the owners' corporation, and that the management corporation may take proceedings in the Lands Tribunal or the Small Claims Tribunal for recovery of arrears under Cap. 344.

Forms-legal.com provides a Service Charge Notice template compliant with Cap. 344 and the PMSA Code of Practice, helping management corporations communicate financial obligations clearly and transparently.

Signature Authority: The notice must be signed by the chairperson of the management committee or the authorised representative of the licensed property management company under Cap. 626, confirming the accuracy of the charges stated.

Forms-legal.com provides a Service Charge Notice template compliant with Section 20 of the Building Management Ordinance (Cap. 344) and the PMSA Code of Practice issued under Section 29 of the Property Management Services Ordinance (Cap. 626).