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Speech by Permanent Secretary for Housing, Planning and Lands (Housing)

Following is a keynote speech delivered by the Permanent Secretary for Housing, Planning and Lands (Housing), Mr Leung Chin-man, at the First Regional Conference on Private Building Management Hong Kong 2002 today (July 6):

Ladies and gentlemen,

I am honoured to officiate at this Regional Conference on Private Building Management organized by the Home Affairs Department, which is the first of its kind in Hong Kong. On this important occasion, may I, first of all, express my gratitude to the District Councils and the professional organizations in Hong Kong for their support and co-operation, without which this Conference could not have been held.

I also warmly welcome distinguished guests and speakers from neighbouring regions. They include Madam Xie Jiajin from Mainland China, Mr Chiang Coc Meng from Macau, Ms Jennifer Westacott from Australia and Professor Lim Lan Yuan from Singapore. And last but not the least, I welcome participants who will shortly share with us their valuable experience and knowledge on building management.

About half of Hong Kong's population lives in private multi-storey buildings. A unique feature of Hong Kong's residential building landscape is that the ownership of these multi-storey and multi-flat buildings takes the form of undivided shares in the building lots. For most people in Hong Kong, their residential home is the single most important asset they will ever invest in their life. It is therefore the owners' primary responsibility to properly manage and maintain their own assets.

We believe that the active participation of owners in managing their own buildings is not only conducive to maintaining a comfortable and safe living environment, but also a means of fostering a greater sense of belonging and involvement in the community. That is why the Hong Kong SAR Government has taken on the role of "facilitator" in the area of building management. The objective is to ensure that building owners are well-equipped to discharge their management responsibilities. But the key to this mammoth job is sound and effective legislation, quality support services, as well as partnership and cooperation among all parties concerned.

On this occasion where interested parties from the 18 districts of the Hong Kong SAR and the neighbouring regions assemble to exchange views on private building management, let me give a brief account of our facilitation services and explain how we plan to meet the major challenges that lie ahead of us.

Legislation on private building management

First, the Government seeks to provide a sound statutory framework whereby owners of flats of multi-storey buildings could incorporate themselves for the purpose of managing the common parts of their own buildings. The relevant legislation is the Building Management Ordinance which sets out the powers and responsibilities of owners' corporations. We regularly review the Ordinance to ensure that owners who wish to manage their buildings through incorporation could do so without great difficulties. We are encouraged to see the continued increase in the number of owners' corporations formed under the Ordinance over the years, especially after we relaxed the requirement for the formation of owners' corporations through legislative amendments in 2000. At present, there are about 42,000 private buildings in Hong Kong. Owners of about 12,000 buildings have incorporated themselves into 6,700 owners' corporations.

Assistance/support services to owners of private buildings

Second, the Government provides practical advice to building owners so that they are better equipped to discharge their management responsibilities through the work of the Home Affairs Department. Specifically, we assist building owners to form owners' corporations under the Building Management Ordinance, organize seminars and training workshops to promote community awareness of the importance of building management, and offer a free enquiry service. The Department is currently providing these services through a dedicated Building Management Division which was established in June last year, the District Building Management Liaison Teams in the 18 districts, and three Building Management Resource Centres.

Partnership

The actual day-to-day management of the common areas of a private building invariably straddles a wide range of professional areas including law, finance, accounting, facilities maintenance, and environmental hygiene. Most of these management duties are entrusted or contracted out by owners or owners' corporations to property management companies and other specialized service providers, who are in fact working closely with owners as "partners" in managing the buildings.

To assist owners to work with their professional partners, we make arrangements for free expert advice, including legal, accounting, engineering and related advice, to be provided to owners by professional bodies in the Building Management Resource Centres. This is in effect another facet of "partnership" in the building management.

Major challenges ahead

Looking ahead, we are facing several major challenges in the area of private building management. First, there are still a substantial number of private building owners who have yet to organize themselves for the purpose of managing their buildings. Many also have not made any effective arrangements to engage a building management agent. The lack of proper maintenance and management arrangements has given rise to declining quality and security standards in many private buildings, especially older buildings in Hong Kong. Although the formation of owners' corporations is not by itself a ready solution to this problem, we do consider this a useful start in the right direction. We will continue with our efforts to encourage and assist owners to incorporate themselves for this purpose.

Another challenge is how best to ensure that our building management regime meets the changing needs and aspirations of owners, as they become increasingly aware of their powers and rights under the law. As owners' corporations are taking on increasing responsibilities in maintenance and management of buildings, the need to update our building management regime is obvious. It is therefore important that we put in place a building management system which offers adequate incentives to owners to participate in managing their own buildings on the one hand, and provides sufficient safeguards against abuse of powers by certain members of owners' corporations on the other. We will continue to work hand in hand with Legislative Councillors, District Councillors, professional bodies, the owners' corporations and owners in this regard.

In the final analysis, a cordial partnership between all stakeholders is the key to any successful building management system. We will therefore continue to promote and foster this culture with vigour. We will enhance communication with owners to better gauge their needs with a view to improving our services. We will also co-operate closely with professional bodies on this. Promotion of good corporate governance of owners' corporations and the introduction of mediation services for resolving building management disputes as a pilot scheme are some recent examples of initiatives in this respect.

Concluding remarks

To conclude, we look to our partners in building management for assistance and advice in improving the quality of building management in Hong Kong. I am sure that participants of this Regional Conference will exchange useful views and valuable experiences on this important subject. I hope that you all have a fruitful and enjoyable day. Thank you.

End/Saturday, July 6, 2002

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