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Legislative Council Question 11 : "Land (Compulsory Sale for Redevelopment) Ordinance" by the Ir Dr Hon Raymond Ho and a written reply by the Secretary for Housing, Planning and Lands, Mr Michael Suen, in the Legislative Council

Following is a question by the Ir Dr Hon Raymond Ho and a written reply by the Secretary for Housing, Planning and Lands, Mr Michael Suen, in the Legislative Council today (March 1):

Question:

The Land (Compulsory Sale for Redevelopment) Ordinance (Cap. 545) stipulates that where a person owns not less than 90% of the undivided shares in a lot, he may make an application to the Lands Tribunal for the compulsory sale of the shares in the lot held by other owners for the purposes of the redevelopment of the lot. It is learnt that the Administration is considering a proposal to reduce the threshold to 80%, so as to further encourage participation of private developers in urban redevelopment. In this connection, will the Government inform this Council:

(a) as the Administration had stated when the Ordinance was enacted in 1998 that the threshold of 90% already struck a balance between the acceleration of urban redevelopment and the protection of interests of individual owners, of the rationale for proposing to reduce the threshold;

(b) of the impact of reducing the threshold on the interests of individual owners and the extent of controversy which may arise from such a proposal; and

(c) of the estimated annual increase in the number of redeveloped dilapidated buildings which will result from the reduction of the threshold?

Reply:

Madam President,

My reply to the three parts of the question is as follows:

(a) The Land (Compulsory Sale for Redevelopment) Ordinance (LCSRO) (Cap. 545) aims to facilitate private sector's redevelopment efforts. Under the LCSRO, any person who owns not less than 90% of undivided shares in a lot may apply to the Lands Tribunal for a compulsory sale of the whole lot for the purpose of redevelopment. In addition, the Chief Executive in Council may specify by notice in the Gazette certain classes of lots for which a compulsory sale threshold of not less than 80% will apply. The Gazette notice is subsidiary legislation.

Since the LCSRO came into effect in 1999, there have been calls from members of the industry, some professional bodies and individual owners urging the Government to amend the LCSRO, including lowering the compulsory sale threshold to not less than 80% across the board. Nonetheless, we have reservation over these proposals, mainly in view of the fact that the Legislative Council has come to a consensus on the LCSRO after in-depth and thorough discussions. There are also public views advocating the need to strike a careful balance between facilitating private redevelopment and protecting private property rights.

The Government does not have any plan to propose amendments to the LCSRO at the moment. Nevertheless, to further facilitate private sector's redevelopment efforts so as to arrest the aggravating problem of building decay, we are considering to make use of the existing mechanism under the LCSRO to allow certain specified classes of lots to enjoy a compulsory sale threshold of not less than 80%, by way of subsidiary legislation and in the form of Gazette notice. We will shortly consult the industry and the public on our proposals.

(b) During the passage of the LCSRO, the Legislative Council has examined, from the public interests angle, how to assist private sector's participation in redevelopment in order to arrest the problem of building decay and improve the overall living environment. At the same time, the Legislative Council has fully considered and discussed various measures to safeguard the interests of the affected building owners, including the provision of appropriate compensation under the LCSRO to relevant owners, and requiring the Lands Tribunal to make an order for sale only when it is satisfied that the application for redevelopment is fully justified and has fulfilled the requirements under the LCSRO.

Since our proposals are based on the existing mechanism provided in the LCSRO; and that we are mindful of the need to seek a fine balance between facilitating private sector's redevelopment efforts and protecting private property rights, we are confident that the public will understand and accept our proposals. We will listen to the views of various sectors on our proposals carefully in the upcoming consultation.

(c) It is not possible to estimate the number of buildings that would be redeveloped each year as a result of our proposals because private sector's participation in redevelopment is mainly driven by market forces and is purely a commercial decision. Our proposals aim to create a more favourable environment to facilitate their work. Furthermore, the Lands Tribunal will examine thoroughly whether an application for a compulsory sale has met the requirements under the LCSRO before it decides to grant an order for sale. As regards the number of buildings eligible for adopting a threshold of not less than 80% when applying to the Lands Tribunal for a compulsory sale under our proposals, we will provide the information in the context of the upcoming consultation.

Ends/Wednesday, March 1, 2006
Issued at HKT 14:31

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