When buying property in Hong Kong, most buyers focus on price, location, and size. However, use restrictions often determine whether a property suits your needs. These restrictions come from multiple sources: government leases, zoning ordinances, building covenants, and the Buildings Ordinance. Ignoring them can lead to fines, forced alterations, or even loss of the property. This article explains the main types of use restrictions in Hong Kong, how to identify them, and what to do if you encounter problems.

Types of Use Restrictions in Hong Kong Property

Use restrictions in Hong Kong fall into four main categories: government lease conditions, zoning under the Town Planning Ordinance, deed of mutual covenant restrictions, and statutory requirements under the Buildings Ordinance. Each category affects different aspects of how you can occupy or modify a property.

Government Lease Conditions

Every property in Hong Kong is held under a government lease, either a Crown Lease (for land granted before 1997) or a Government Lease (for land granted after 1997). These leases specify the permitted uses of the land. Common lease conditions include:

  • Use restrictions: for example, "private residential" only, which prohibits commercial activities.
  • Building height restrictions: maximum number of storeys or building height in metres.
  • Maximum site coverage and gross floor area limits.
  • Requirements to maintain the land in good condition.
  • Restrictions on assignment (subletting or selling) without government consent.

Lease conditions are recorded in the Land Registry and are binding on all subsequent owners. You can inspect the land register for a property to see its lease conditions. For example, a flat in Mid-Levels may have a lease that says "residential purposes only" and limits the building to 20 storeys. If you plan to run a home office or a small shop, such a lease would forbid it.

Zoning Under the Town Planning Ordinance

The Town Planning Board prepares statutory plans known as Outline Zoning Plans (OZPs) for most areas of Hong Kong. These plans divide land into zones such as Residential (Group A), Residential (Group B), Commercial, Industrial, Green Belt, and others. Each zone has a schedule of permitted uses and uses that require planning permission.

For example, in a Residential (Group A) zone, flat uses are always permitted, but a restaurant or a school would require planning permission. In a Commercial zone, shops and offices are permitted, but residential use may be restricted. You can check the OZP for any property at the Town Planning Board's website or at the Board's office in North Point.

If you buy a property in a zone that does not permit your intended use, you may need to apply for planning permission. This process can take months and may be refused. In some cases, even if the lease allows a certain use, the zoning may forbid it. The more restrictive condition prevails.

Deed of Mutual Covenant Restrictions

Most multi-storey residential buildings in Hong Kong are governed by a Deed of Mutual Covenant (DMC). This is a contract between the developer and the owners that sets out rules for the building. Common DMC restrictions include:

  • Prohibition on running a business from a flat.
  • Restrictions on keeping pets (size, number, species).
  • Limits on renovations, especially structural changes.
  • Rules about noise, odour, and other nuisance.
  • Restrictions on subletting or short-term rentals (e.g., Airbnb).
  • Requirements for approval of alterations to the flat's exterior (windows, air conditioners, satellite dishes).

DMCs vary by building. Some are very strict, while others are more permissive. You should always read the DMC before buying. It is available from the management office or the Land Registry. If you plan to use your flat as a serviced apartment or for a home-based business, check the DMC first. Violating DMC rules can lead to legal action by the owners' corporation or management company.

Buildings Ordinance Requirements

The Buildings Ordinance and its regulations impose restrictions on building works. Even if the lease, zoning, and DMC allow a certain use, you may still be prohibited by the Buildings Ordinance. Key restrictions include:

  • No unauthorised building works (UBWs) such as rooftop structures, enclosed balconies, or enlarged windows.
  • Minimum flat sizes for new developments (since 2013, new flats must have a minimum saleable area of 26 square metres for a studio unit).
  • Fire safety requirements for commercial uses in residential buildings.
  • Requirements for means of escape, ventilation, and natural lighting.

The Buildings Department can issue orders to remove UBWs and may prosecute owners. If you buy a property with UBWs, you may be required to remove them at your own cost. Always check the building's approved plans and any outstanding orders before purchase.

How to Identify Use Restrictions Before Buying

Identifying use restrictions requires checking multiple sources. Here is a step-by-step approach:

  1. Check the land register. Visit the Land Registry (online or in person) and obtain a copy of the land register for the property. Look for the lease conditions, including user clause, height restrictions, and any government approvals.
  2. Check the OZP. Go to the Town Planning Board's website and search for the property's location. Download the relevant OZP and its schedule of permitted uses. Note whether your intended use is always permitted, requires planning permission, or is prohibited.
  3. Read the DMC. Obtain a copy of the DMC from the management office or the Land Registry. Pay attention to clauses on use, alterations, pets, subletting, and business operations.
  4. Check for outstanding building orders. Search the Buildings Department's database for any outstanding orders or contravention notices on the property. You can do this online using the Building Records Access (BRA) system.
  5. Hire a solicitor. A solicitor experienced in Hong Kong property can review all these documents and advise you on any restrictions that affect your intended use. This is a standard part of the conveyancing process.

For a detailed overview of the entire buying process, including document checks, see our complete guide to buying property in Hong Kong.

Common Scenarios Where Use Restrictions Matter

Running a Home Business

Many people want to run a small business from their flat, such as a tutoring centre, a beauty salon, or an online retail operation. Most leases and DMCs prohibit commercial use in residential flats. Even if the DMC is silent, the lease may require government consent for any non-residential use. If you plan to run a business, look for a property with a commercial or mixed-use zoning and a lease that permits commercial use. Some older buildings in areas like Wan Chai or Mong Kok have "domestic" flats that are actually used for offices, but this is often illegal.

Short-Term Rentals (Airbnb)

Short-term rentals of less than 28 days are considered hotel-like operations and require a hotel licence under the Hotels and Guesthouses Ordinance. Most residential leases and DMCs prohibit such uses. In 2018, the government cracked down on unauthorised short-term rentals, and several owners were prosecuted. If you plan to let your flat on Airbnb, check the DMC and lease carefully. Some buildings explicitly ban short-term lets. Even if they do not, you may need a hotel licence, which is rarely granted for a single flat in a residential building.

Renovations and Alterations

If you want to renovate a flat, you must comply with the Buildings Ordinance and the DMC. Structural alterations (e.g., removing a load-bearing wall, adding a mezzanine floor) require approval from the Buildings Department. Non-structural alterations (e.g., changing kitchen cabinets, replacing flooring) usually do not require approval, but the DMC may require you to notify the management office. Some DMCs also restrict the type of flooring (e.g., no hard flooring that causes noise to neighbours) and working hours for renovation.

Keeping Pets

Many DMCs restrict pets. Some ban all pets, while others allow only small dogs or cats, or require approval from the management. If you have a pet or plan to get one, check the DMC before buying. Even if the DMC allows pets, the lease may not. In practice, most leases do not address pets, but the DMC is the governing document for the building.

Subletting

Subletting a flat (renting it out to a tenant) is generally allowed if the lease and DMC do not prohibit it. However, many DMCs require owners to register tenants with the management, and some restrict the number of occupants. If you plan to sublet the flat, check the DMC for any restrictions. Also, the lease may require government consent for subletting, though this is rare for residential flats.

Consequences of Violating Use Restrictions

Violating use restrictions can have serious consequences:

  • Fines and penalties. The government can fine you for breaching lease conditions or zoning rules. For example, unauthorised building works can result in a fine of up to HKD 500,000 and imprisonment for up to 2 years.
  • Enforcement orders. The Buildings Department can issue an order to remove unauthorised structures within a specified period. If you fail to comply, the government can carry out the work and charge you the cost plus a surcharge.
  • Legal action by the owners' corporation. If you violate the DMC, the owners' corporation can sue you for breach of contract and seek an injunction to stop the activity. You may also be required to pay legal costs.
  • Loss of property. In extreme cases, the government can re-enter the land (i.e., forfeit the lease) if you breach lease conditions. This is rare but has happened for serious breaches such as unauthorised commercial use on residential land.
  • Difficulty selling. A property with outstanding unauthorised works or a history of DMC violations may be hard to sell. Buyers will discount the price or walk away.

For more on transaction costs, including potential fines, see our article on transaction costs overview.

How to Resolve Use Restriction Issues

If you discover a use restriction after buying, you have several options:

  • Apply for a waiver or modification. For lease conditions, you can apply to the Lands Department for a waiver or modification. This is often possible for minor changes, such as changing the use from residential to commercial on a small part of the land. The application fee is HKD 10,000 or more, and the government may charge a premium (additional land value) for the change.
  • Apply for planning permission. If the OZP requires planning permission for your intended use, you can apply to the Town Planning Board. The process takes 2-3 months and costs HKD 10,000 for a standard application. Success depends on the specifics of the case.
  • Seek a DMC amendment. Changing the DMC requires agreement from a majority of owners (usually 80% or more) and approval from the Land Registry. This is difficult and expensive, but possible in some cases.
  • Regularise unauthorised works. If you have UBWs, you can apply to the Buildings Department to regularise them (i.e., get approval after the fact). This is only possible if the works comply with current building regulations. If not, you must remove them.
  • Negotiate with the owners' corporation. For DMC violations, you can try to negotiate with the management or owners' corporation. They may allow the activity if you pay a fee or comply with certain conditions.

In all cases, consult a solicitor before taking action. The costs of resolving use restrictions can be high, but they are usually lower than the costs of ignoring them.

Use Restrictions for Foreign Buyers

Foreign buyers face additional use restrictions. Non-Hong Kong residents (including mainland Chinese buyers) are generally allowed to buy residential property in Hong Kong, but they must pay higher stamp duty rates. See our article on tax considerations for foreign buyers for details.

However, foreign ownership of certain types of property is restricted. For example, land in the New Territories that is classified as "agricultural" or "village type" may have restrictions on foreign ownership. Also, some government leases contain clauses that prohibit non-Chinese nationals from owning the land. These clauses are rare but exist. Check the lease conditions carefully if you are a foreign buyer.

For a full discussion of the buying process for foreigners, see our complete guide to buying property in Hong Kong.

Use Restrictions and New Developments vs. Secondhand Properties

New developments typically have more detailed and restrictive DMCs than older buildings. Developers include clauses to maintain the building's prestige and to avoid disputes. For example, a new luxury development in Kowloon may ban pets, restrict subletting to a minimum of 12 months, and require approval for any window blinds. Older buildings may have looser DMCs or none at all (though all buildings built after 1970 must have a DMC).

On the other hand, older buildings may have more UBWs and may be located in zones that have changed over time. A flat in a building built in the 1960s in Wan Chai may have a lease that allows commercial use, but the current OZP may restrict it to residential. You need to check both.

For a comparison, read our article on new developments vs. secondhand properties.

Practical Tips for Buyers

  • Always read the DMC before signing the preliminary agreement. Your solicitor should provide you with a copy. If the DMC is not available, ask why. Some developers delay providing the DMC until after the sale is completed, which is risky.
  • Check the land register and OZP yourself. You can do this online for a small fee. Do not rely solely on the estate agent's information.
  • Ask the management office about any pending enforcement actions. The management office may know about outstanding orders or disputes.
  • If you plan to renovate, get approval from the management and the Buildings Department if required. Doing work without approval can lead to orders to undo the work.
  • For commercial use, consider buying a property in a commercial zone with a commercial lease. The price may be higher, but you avoid the risk of enforcement.
  • Keep copies of all documents. If a dispute arises later, you will need evidence of what you knew and when.

For more on the buying process, see our step-by-step buying process.

Conclusion

Use restrictions are a critical but often overlooked aspect of Hong Kong property. They can affect your daily life, your ability to generate income, and the resale value of your property. By checking the lease, zoning, DMC, and building regulations before you buy, you can avoid costly surprises. Always engage a qualified solicitor and, if necessary, a surveyor to review the property's restrictions. With careful due diligence, you can find a property that meets your needs without legal headaches.

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