Home Renovation Agreement (Hong Kong)

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

Hong Kong's property market is characterised by high-density residential buildings — predominantly multi-storey private housing estates and public housing blocks — where renovation works affect not only the property owner but also adjacent residents, the building's management, and the structural integrity of the building itself. Renovation contractors operating in Hong Kong range from large licensed building contractors to individual tradespeople; the Buildings Department maintains a Minor Works Contractor Registration Scheme under Cap. 123, identifying contractors authorised to carry out specific categories of minor building works.

Certain categories of renovation work require prior approval from the Buildings Department under Section 14 of Cap. 123 before commencement. Structural alterations — including removal of load-bearing walls, creation of new openings in external walls, additions to existing structures, and alterations to drainage systems discharging into the public sewerage system — require a licensed Authorised Person (AP) or Registered Structural Engineer (RSE) to submit plans for Buildings Department approval. Failure to obtain the required approval constitutes an offence under Cap. 123 and may result in enforcement notices requiring the owner to rectify unauthorised structures at their own cost.

Property owners in buildings governed by a Deed of Mutual Covenant (DMC) must also obtain the building manager's or owners' corporation's consent before commencing works that affect common areas, structural elements, or external façades. Works in breach of the DMC may expose the owner to injunctive proceedings under the DMC or Building Management Ordinance (Cap. 344).

Noise generated by renovation works is subject to the Noise Control Ordinance (Cap. 400), administered by the Environmental Protection Department (EPD). Percussion work (drilling, hammering) is prohibited during prescribed hours on weekdays and is restricted on Saturdays and prohibited on Sundays and public holidays. Air pollution from construction dust is controlled under the Air Pollution Control Ordinance (Cap. 311). Contractors must take reasonable steps to suppress dust and dispose of construction waste in accordance with the Waste Disposal Ordinance (Cap. 354).

The Supply of Services (Implied Terms) Ordinance (Cap. 457) implies terms into Hong Kong service contracts that the contractor will carry out the services with reasonable care and skill, within a reasonable time (if no time is fixed), and for a reasonable charge (if no charge is fixed). Under Section 8 of Cap. 457, where no time is fixed for completion, the service must be completed within a reasonable time. A written Home Renovation Agreement displaces these implied terms by expressly agreeing the standard of work, timeline, and price — providing greater certainty for both parties.

After completion, the contractor's obligation regarding defects is a critical term. Industry practice in Hong Kong typically includes a defect liability period of 12 months, during which the contractor must rectify defects arising from defective materials or workmanship at no additional cost. Beyond the contractual defect liability period, the owner's common law rights to claim damages for breach of contract are subject to the Limitation Ordinance (Cap. 347) — Section 4 of Cap. 347 sets a 6-year limitation period for simple contracts, while Section 17 extends this to 12 years for contracts executed as deeds.

A Home Renovation Agreement in Hong Kong is needed whenever a property owner engages a contractor to carry out significant renovation, alteration, fitting-out, or refurbishment works at a residential property.

Property owners in newly purchased flats who engage contractors to gut and renovate the property before moving in should use a written Home Renovation Agreement to document the full scope of works, including demolition, structural works (where permitted under Section 14 of Cap. 123), electrical rewiring, plumbing, tiling, painting, carpentry, and fixture installation, with a detailed payment schedule tied to project milestones.

Landlords refurbishing a rental property between tenancies in Hong Kong need a Renovation Agreement that captures the scope of works, the agreed completion date (critical for managing void periods), the contractor's obligations regarding dust and noise compliance under the Noise Control Ordinance (Cap. 400), and reinstatement obligations if the renovation affects structural elements requiring Buildings Department consent.

Tenant fit-out arrangements, where a tenant carries out renovation works to a landlord's residential property with the landlord's consent, require a Renovation Agreement between the tenant and their contractor, supplemented by the landlord's formal consent letter. The agreement should address ownership of fixtures and fittings installed by the tenant, and whether they must be removed at lease end.

Partial renovations — kitchen upgrades, bathroom refits, flooring replacement — benefit from a simplified version of the standard Renovation Agreement that documents the specific scope, price in HKD, completion date, materials specification, and defect liability period, even where the scale of works does not require Buildings Department approval.

Aged building rehabilitation projects, which are increasingly common in Hong Kong's older building stock, may involve works under the government's Mandatory Building Inspection Scheme (MBIS) or Mandatory Window Inspection Scheme (MWIS) under Cap. 123. A Renovation Agreement in these circumstances should incorporate the relevant inspection and repair specifications.

Owners and residents' corporations carrying out common area renovation works should use a Renovation Agreement to engage contractors under the Building Management Ordinance (Cap. 344) procurement requirements, confirming competitive tendering and contractor accountability. The Hong Kong Buildings Department publishes lists of registered contractors and authorised persons, and the Urban Renewal Authority of Hong Kong administers building rehabilitation programmes that often require formal contractor agreements compliant with Cap. 123 requirements.

A Home Renovation Agreement in Hong Kong must address the following key elements to protect the property owner, the contractor, and adjacent residents.

Parties: Full legal names, HKID numbers or company registration numbers, and contact details of the property owner (or their authorised representative) and the contractor. If the contractor is a company, confirmation of their business registration under the Business Registration Ordinance (Cap. 310) and, where applicable, registration under the Minor Works Contractor Registration Scheme under Cap. 123.

Property description: The full address of the property, the floor and unit number, the Land Registry lot reference, and the type of property (private residential flat, village house, etc.). If the property is subject to a DMC, confirmation that the owner has obtained the building manager's consent to the proposed works.

Scope of works: A detailed description of all works to be performed, room by room, referencing drawings and specifications where available. Clearly distinguishing works that require Buildings Department approval (structural alterations, drainage works) from minor decorative works. Specifying materials, brands, and finishes to be used, with reference to Hong Kong market-standard materials.

Buildings Department compliance: Identification of which works (if any) require Buildings Department approval under Cap. 123, and confirmation of which party (owner or contractor) is responsible for engaging an Authorised Person and obtaining approvals. A warranty by the contractor that all works will be completed in accordance with the Buildings Department's approved plans and conditions.

Contract price and payment schedule: The total contract price in HKD, broken down by trade or phase. A milestone-based payment schedule — with payments tied to commencement, specified stages of completion (e.g., completion of structural works, completion of tiling, practical completion), and a retention amount held pending expiry of the defect liability period — protects the owner against non-completion.

Timeline and liquidated damages: The commencement date, projected completion date, and any milestones. A liquidated damages clause providing for a daily or weekly deduction from the contract price for each day of delay beyond the completion date, subject to extension of time for matters outside the contractor's control.

Noise and dust control: The contractor's obligations to comply with the Noise Control Ordinance (Cap. 400) (no percussion work between 11:00 pm and 7:00 am on any day, and restrictions on Saturdays, Sundays, and public holidays) and the Air Pollution Control Ordinance (Cap. 311) regarding dust suppression. Confirmation that construction waste will be removed and disposed of in compliance with the Waste Disposal Ordinance (Cap. 354).

Defect liability period: Typically 12 months from practical completion. The contractor's obligation to return to site and rectify any defects notified during the defect liability period at no additional cost. A retention amount (commonly 5–10% of the contract price) held by the owner and released at the end of the defect liability period.

Insurance: Confirmation that the contractor maintains public liability insurance (minimum HK$10 million per occurrence) and employees' compensation insurance under Cap. 282 for all workers on site. Failure to maintain required employees' compensation insurance is a criminal offence.

Variations: A procedure for agreeing additional works or changes to the scope, with written variation orders signed by both parties before any additional works commence. Verbal instructions for variations are a common cause of disputes and should be avoided.

Governing law and disputes: Laws of the Hong Kong Special Administrative Region. Disputes to be referred to the Small Claims Tribunal (claims up to HK$75,000), the District Court, or, for larger disputes, arbitration under the Hong Kong International Arbitration Centre (HKIAC) rules. Forms-legal.com recommends seeking legal advice for disputes exceeding HK$250,000 in value.