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LCQ13: Restriction on alienation and sale of New Territories small houses

Following is a question by the Hon Cyd Ho and a written reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (May 7):

Question:

Regarding the restriction on alienation (RoA) and the sale of New Territories small houses (small houses), will the Government inform this Council:

(1) of the number of cases since 1997 in which small house building licences were revoked due to the licensees' breach of the building licence conditions and, among such cases, the number of those involving the licensees having entered into an agreement with a developer on transfer of small house concessionary rights before applying for the licence;

(2) of the respective numbers of certificates of compliance (CCs) issued by the authorities for small houses and approved cases of removal of RoA, as well as the total amount of premium collected, in each year since 2002-2003 (set out in the table below); and

(i) Financial year;
(ii) Number of CCs issued;
(iii) Number of approved cases of removal of RoA; and
(iv) Total premium collected ($ million);

(3) in respect of each year since 2002-2003,(i) of the average time elapsed since the issuance of CCs for small houses when applications for removal of RoA of them were received in the year, and (ii) in respect of the small houses for which removal of RoA was approved in the year, of the average time elapsed since the approval when the first sale of the flatted units therein took place (together with a breakdown by the rural committee which covers the village in which the small house is situated)?

Reply:

President,

The Small House Policy was introduced in 1972.  Under the Policy, a male indigenous villager at least 18 years old who is descended through the male line from a resident in 1898 of a recognised village in the New Territories may apply to the authority for permission to erect for himself during his lifetime a small house on a suitable site within his own village.

The present Small House Policy does not allow an eligible person to transfer his small house rights before he makes an application.  Moreover, after approval of an application, small houses on private land granted by way of Building Licences (BLs) are normally subject to a five-year alienation restriction, i.e. the holder of the licence shall not alienate his property within five years after the issue of the Certificate of Compliance.  Such restriction is perpetual for small houses on Government land granted by way of Private Treaty Grants (PTGs). The registered owner of a small house shall apply to the Lands Department (LandsD) for removal of the relevant alienation restriction clause and pay an additional premium and an administrative fee if he wishes to transfer ownership of his small house during the above-mentioned alienation restriction period.  Payment of an additional premium is not required if the transfer of ownership is to another indigenous villager who is eligible to apply for building a small house and has not exercised his right, but the relevant alienation restriction will remain in force after the transfer of ownership of the relevant small house.  At the same time, the BLs and PTGs contain other conditions such as a warranty clause that the applicant has not previously exercised his right to build a small house; and a building covenant clause (i.e. the owner shall complete development within a specified time frame after execution of the BL/ PTG). LandsD will take lease enforcement action against the relevant owners in case of a breach of conditions.

I reply to the various parts of the question as follows:

(1) There has been a total of 28 cases of the respective cancellation of BL or re-entry of private land due to breach of BL/ PTG conditions by licencees/ grantees since 1997, amongst which 15 cases are in breach of building covenant clause; six in breach of development clause (i.e. the permissible scale of the relevant building e.g. building height); four in breach of alienation restriction clause; and three in breach of the warranty clause that the applicant has not previously exercised his right to build a small house.  None of the cases involves the licencees' signing of agreements with developers on transfer of rights to build small house before submission of small house applications.

LandsD had on different occasions reiterated and reminded indigenous villagers and other relevant persons of the prohibition on transfer of rights to build small house before submission of small house applications under the Small House Policy.  LandsD will take it seriously and follow up if there is sufficient evidence pointing at the aforementioned breach concerning individual cases. The department also welcomes members of the public to file reports and provide specific information to facilitate investigation.

(2) The numbers of Certificates of Compliance issued by the authority for small houses and approved cases of removal of restriction on alienation, as well as the total amount of additional premium collected since the 2002-2003 financial year is tabulated at Appendix.

(3) LandsD does not keep readily available yearly statistics (i) of the average time elapsed since the issuance of Certificates of Compliance for small houses when applications for removal of restriction on alienation of them were received; and (ii) in respect of the small houses for which removal of restriction on alienation was approved, of the average time elapsed since the approval when the first sale of the flatted units therein took place.


Ends/Wednesday, May 7, 2014
Issued at HKT 15:25

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