Property Condition Report (Hong Kong)

A Property Condition Report in Hong Kong records the findings or particulars it documents for the purpose at hand.

The Landlord and Tenant (Consolidation) Ordinance (Cap. 7) governs residential tenancy relationships in Hong Kong. While Cap. 7 does not mandate the preparation of a formal condition report, it is accepted by the Small Claims Tribunal and the District Court as the primary evidence in deposit disputes — which are among the most common types of property-related civil proceedings in Hong Kong. The Conveyancing and Property Ordinance (Cap. 219) governs dealings in land and tenancy interests, and under the principles of bailment applied by Hong Kong courts, a landlord who lets premises to a tenant is in a position analogous to a bailor — the tenant is responsible for returning the property in the condition in which it was received, fair wear and tear excepted.

The Estate Agents Ordinance (Cap. 511) and the Estate Agents Authority (EAA) Code of Ethics encourage licensed estate agents and property managers to prepare condition inventories and reports for tenancies they manage. The EAA's Practice Circular No. 14-01 (Rev.) on Letting and Tenancy Transactions sets out agents' professional obligations, which include advising clients on the importance of condition documentation. Many professional property management companies in Hong Kong — including those managing large residential developments in Taikoo Shing, City One Shatin, or Whampoa Garden — require condition reports as standard procedure.

For property purchases, condition reports serve a different purpose: documenting defects and the state of fixtures and fittings at the time of sale, which may be relevant to contractual representations and warranties in the sale and purchase agreement. Under Hong Kong conveyancing practice, the buyer conducts their own due diligence — there is no statutory seller disclosure requirement equivalent to some other common law jurisdictions. A pre-purchase condition report, often prepared by a qualified building surveyor accredited by the Royal Institution of Chartered Surveyors (RICS) or the Hong Kong Institute of Surveyors (HKIS), provides the buyer with an independent assessment of the property's condition before committing to the purchase. Forms-legal.com provides a free Hong Kong Property Condition Report template suitable for tenancy and purchase transactions.

Section 3 of the Estate Agents Ordinance (Cap. 511) defines regulated activities including management of leased properties. Section 24 of Cap. 511 makes it an offence for a person to carry on the business of an estate agent without a licence. Section 5 of the Conveyancing and Property Ordinance (Cap. 219) sets out requirements for written evidence of tenancy agreements — a condition report prepared in conjunction with the tenancy agreement satisfies the requirement for contemporaneous written records.

A Property Condition Report in Hong Kong is needed at three critical moments in the life of a property: at the start of a tenancy, at the end of a tenancy, and before or after a property purchase.

At the start of a tenancy, the report should be completed jointly by the landlord (or their EAA-licensed estate agent) and the incoming tenant during a move-in inspection, before the tenant moves any belongings into the property. Completing the report at this stage — before any damage attributable to the new tenant could have occurred — establishes the baseline condition against which the move-out state will be compared. Any pre-existing damage noted in the move-in report cannot be charged to the tenant on departure.

At the end of a tenancy, a move-out inspection and updated condition report should be completed before the tenant returns all keys and access cards. The landlord or agent should attend the inspection with a copy of the move-in report to compare conditions item by item. Damage that was not present at move-in and does not constitute fair wear and tear may be charged against the security deposit. Disputes about deposit deductions — for amounts up to HKD 75,000 — are handled by the Small Claims Tribunal, where the condition report is the central documentary evidence.

For property purchases, a buyer in Hong Kong should commission a pre-purchase building survey and complete a condition report before exchanging contracts. Under the Hong Kong Law Society's standard Conditions of Sale, the property is sold subject to the buyer's inspection — after exchange of contracts, the buyer generally cannot rescind due to condition issues unless the seller has made fraudulent misrepresentations. A condition report prepared before exchange captures any defects the buyer is accepting.

For commercial premises — offices, retail shops, and restaurants — condition reports are particularly important at lease commencement and expiry because Hong Kong commercial leases typically require the tenant to reinstate the premises to their original condition at the end of the lease (a 'make-good' or 'reinstatement' obligation). Disputes about the scope of make-good obligations are common in Hong Kong commercial tenancy practice and are regularly litigated in the Lands Tribunal and the District Court.

For properties managed by corporate landlords or institutional investors — including shopping centres, grade-A office buildings in Central or Quarry Bay, and large residential developments — condition reports are part of standard property management procedures and are often required by the property management company's internal policies or by the terms of its management agreement with the building's Owners' Corporation.

Section 8 of the Supply of Services (Implied Terms) Ordinance (Cap. 457) implies into property management contracts a term that services will be performed with reasonable care and skill. Property management companies engaged under such contracts have a professional duty to prepare accurate condition records. Section 6 of the Limitation Ordinance (Cap. 347) gives six years to bring a contract claim — condition records should be retained for this period.

A Property Condition Report for use in Hong Kong residential and commercial tenancies and property transactions should include the following elements to serve as effective evidence.

Property and Parties: The full address of the property (including floor, flat number, and building name as registered with the Land Registry), the date and time of inspection, the type of inspection (move-in, move-out, pre-purchase, or periodic), and the full names of all persons present — landlord, tenant, estate agent (with EAA licence number), or building surveyor (with HKIS or RICS qualification).

Room-by-Room Condition Record: A structured section for each area of the property — entrance hall, living room, dining area, kitchen, each bedroom, each bathroom, balcony or terrace, utility room, storeroom, and parking space if applicable. For each area, the condition of walls, ceiling, floor, windows (frames, glass, handles, locks), doors (frames, handles, locks), and blinds or curtains should be recorded.

Fixtures and Fittings: A dedicated section for built-in fixtures — kitchen appliances (refrigerator, oven, hob, cooker hood, dishwasher, microwave), bathroom fittings (bath, shower, basin, WC, mirrors, towel rails), air conditioning units (make, model, filter condition, remote control), water heater, and all light fittings. Built-in furniture included in the tenancy — wardrobes, shelving, TV cabinets — should be listed with condition noted.

Condition Rating: A standardised rating for each item — Good (no defects), Fair (minor defects not affecting function), or Poor (significant defects or damage) — with space for written description of any defect. Pre-existing damage must be described with sufficient detail to distinguish it from damage that might occur during the tenancy or between inspections.

Meters and Keys: Electricity meter reading (CLP Power or HK Electric, noting the meter number), water sub-meter reading where applicable, Towngas or LPG meter reading, and a complete list of all keys, access cards, car park remote controls, and letterbox keys handed over, with a count of each.

Photographic Log: A record of all photographs taken during the inspection — the total number, the areas covered, and confirmation that photographs are date-stamped. Under Small Claims Tribunal evidentiary practice, date-stamped photographs are frequently determinative in deposit disputes. Both parties should receive copies of all photographs taken.

Signed Agreement: Signatures of the landlord (or authorised agent) and the tenant (or buyer and seller), confirming that the report accurately records the condition at the time of inspection. Where any item is disputed, the disputed item and each party's position should be noted. Each party should retain a signed original.

Link to Tenancy Agreement: Reference to the tenancy agreement date and parties, confirming that this report forms part of or supplements the tenancy agreement, and that it will serve as the benchmark for deposit deduction determinations at the end of the tenancy under the Landlord and Tenant (Consolidation) Ordinance (Cap. 7).

Forms-legal.com provides a free Hong Kong Property Condition Report template with a structured room-by-room format for residential and commercial tenancies.

Section 9 of the Landlord and Tenant (Consolidation) Ordinance (Cap. 7) governs the tenant's obligation at the end of the tenancy to return the premises in the condition received, fair wear and tear excepted. The condition report prepared at move-in is the primary reference document for determining compliance with this obligation before the Small Claims Tribunal or Lands Tribunal.