Lower compulsory sale application threshold for three classes of land lot (with videos)

To further facilitate redevelopment by owners to tackle building deterioration and to implement the 2009-10 Policy Address initiative to revitalise Hong Kong's old industrial buildings, the Government has lowered the application threshold for compulsory sale to be made to the Lands Tribunal from ownership of not less than 90% to not less than 80% of the undivided shares in respect of three classes of lot.

The three classes of lot are:

(a) a lot with units each of which accounts for more than 10% of the undivided shares in the lot;
(b) a lot with all buildings aged 50 years or above; and
(c) a lot with all industrial buildings aged 30 years or above not located within an industrial zone.

The Land (Compulsory Sale for Redevelopment)(Specification of Lower Percentage) Notice, which specifies the lowering of the compulsory sale application threshold, will be gazetted tomorrow (January 22) and tabled at the Legislative Council for negative vetting next Wednesday (January 27). Upon completion of the relevant procedures, the notice will come into operation on April 1.

A spokesman for the Development Bureau said the existing ordinance, which came into effect in 1999, contained a provision that provided for the Chief Executive in Council to lower the application threshold to no less than 80% in respect of specified classes of lot.

"In light of the experience in the past decade, and the extensive public consultations undertaken in the last few years, we believe that lowering the threshold from 90% to 80% in respect of the three classes of lot is necessary," the spokesman said.

To enhance the understanding of property owners of this legislative proposal, particularly those living in dilapidated buildings contemplating redevelopment, the Hong Kong Housing Society (HKHS) would provide, with professional support mainly from the Hong Kong Institute of Surveyors, free information service on the compulsory sale process and other related issues.

Details about the Land (Compulsory Sale for Redevelopment) Ordinance, including the compulsory sale process, the rights of minority owners, valuation etc will be provided to the public through HKHS's 10 property management advisory centres. Public forums will also be organised to further explain the legislation.

The spokesman said that there were about 3,300 buildings aged 50 years of above in Hong Kong. It is estimated that over the next 10 years, about another 500 buildings per annum would reach the end of their design working life.

The design working life of an ordinary building in Hong Kong is 50 years. According to records of the Buildings Department, building repair orders served on buildings aged 50 years or above account for 19% of all building repair orders served during the past five years.

"The proposed lowering of the compulsory sale application threshold will enhance the ability of private property owners in redeveloping their buildings to help tackle building deterioration problem, so as to improve the living condition of affected owners and the cityscape of Hong Kong," the spokesman said.

The lowering of the compulsory sale application threshold for redevelopment of industrial buildings of 30 years of age was one of the measures announced by the Chief Executive in the 2009-10 Policy Address to facilitate the revitalisation of industrial buildings in Hong Kong.

The measure will help optimise the use of under-utilised or disused industrial buildings located in non-industrial zones in Hong Kong. It is estimated that about 580 industrial buildings of this type will meet the age and land use zoning requirement specified in the notice for application for compulsory sale.

"However, redevelopment of industrial buildings is not the only means to help revitalise Hong Kong's industrial stock. The Government has also announced measures to encourage wholesale conversion of existing industrial buildings which, without involving demolition, is more environmentally friendly," the spokesman said.

Regarding the lowering of the compulsory sale application threshold for the first class of lot, the spokesman said that the objective was to address deadlock situations where the majority owners could proceed to a compulsory sale application despite the acquisition of all units but one in the lot.

Under the existing ordinance, people who owned not less than 90% of a lot may make an application to the Lands Tribunal for an order for the sale of the lot for redevelopment. The Lands Tribunal will make such an order if it is satisfied that redevelopment is justified due to the age or state of repair of the existing development on the lot and that reasonable steps have been taken to acquire all the undivided shares in the lot. If the Tribunal agrees to make an order, it will approve the reserve price for the auction of the lot, which will take into account the redevelopment value of the lot.
Ends/Thursday, January 21, 2010
Issued at HKT 17:37



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