LCQ11: Land lease clauses





Following is a question by the Hon Albert Chan and a written reply by the Secretary for Planning and Lands, Mr John C Tsang, in the Legislative Council today (June 26):




At present, some land leases have clauses requiring the real estate developers concerned to provide certain public facilities on the sites concerned. It is learnt that after lands are granted, some real estate developers do not start the works on building the facilities in a timely manner, and they even put off the works until close to the deadline. In this connection, will the Government inform this Council:


(a) of the number of real estate developers, over the past three years, who have failed to complete the public facilities concerned within the specified time limits as stipulated in the clauses of the land leases, the descriptions of the development projects, the names of the developers, as well as the type of the public facilities involved, and the specified and actual dates of their completion; and


(b) whether it will consider stipulating in future land leases that occupation permits will not be issued to real estate developers until after the completion of the public facilities concerned, so as to protect the public interest; if so, of the details; if not, the reasons for that?




Madam President,


In the past three years, there were seven property developments involving late completion of public facilities as against the dates specified in the respective land leases. Details of the seven cases are provided at Annex.


Government attaches great importance to the timely completion of public facilities because they serve the interests of the local community. In this respect, Government has specific measures to ensure timely delivery of such public facilities.


If the construction of public facilities were entrusted to a developer who would hand over the facilities to Government upon completion, the developer would be liable to pay Government liquidated damages for any delayed handover of the facilities. Reimbursements to the developer for constructing the public facilities would not be released until the facilities have been fully completed and handed over to Government.


In respect of public facilities built at the developer's expense, Government could forbid the developer from completing sale transactions with flat buyers if the public facilities were not completed on time. Alternatively, Government could allow the sale transactions to proceed if the developer were able to provide a written undertaking and a bank bond as collateral security. In the event of the developer's failure to complete the public facilities, Government could use the bank bond to pay for the construction of the public facilities.


We do not consider that additional measures, such as withholding occupation permits issued under the Buildings Ordinance, would be necessary to further regulate the construction of public facilities by developers. To withhold the issue of occupation permit because of the late completion of public facilities would penalize not only the developer but also upset the housing arrangements of flat buyers. Government will continue to keep the existing arrangements under review and will consider appropriate improvement measures as and when necessary.


End/Wednesday, June 26, 2002