LCQ13: Mini-storages in industrial buildings

Following is a question by the Hon Paul Tse and a written reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (April 29):


It has been reported that the Lands Department earlier issued warning letters to the owners of two industrial building units, alleging that they had breached the land lease conditions by operating mini-storages in their units, and requiring them to make rectification before the deadlines. Subsequently, as the owners concerned had not made rectification, the Lands Department registered the warning letters at the Land Registry (commonly known as "imposing an encumbrance"). Regarding the operation of mini-storages, will the Government inform this Council:

(1) whether it has conducted any investigation into or compiled statistics on the respective numbers of industrial building units in various traditional industrial areas (e.g. Kowloon Bay, Kwun Tong, Yau Tong, San Po Kong and Wong Chuk Hang) which have been converted into mini-storages; if so, of the breakdown of (i) the number of mini-storages and (ii) the number of tenants, by whether or not the use of the units concerned for such a purpose is in breach of the land lease conditions;

(2) of the channels for members of the public to enquire whether individual mini-storages are operating in breach of the land lease conditions; whether there is any policy on or plan for the eradication of all those mini-storages operating in breach of the relevant land lease conditions and prosecution of the owners concerned; if so, of the details, and how the authorities will mitigate the impact of the eradication on the users of mini-storages; and

(3) as there are comments that with the newly-built residential units getting smaller and housing units with an area of 200 to 300 square feet are very common, members of the public have an increasingly keen demand for mini-storages, of the Government's policies on or plans for meeting such a demand of the residents in various districts?



In general, when the Lands Department (LandsD) receives a complaint or referral of a suspected breach of land lease, it will conduct site inspections and, depending on the facts and circumstances of the case and the conditions of the relevant land lease, determine whether there is any breach of the land lease. If a breach is found, LandsD will take appropriate actions to rectify the breach of land lease. This same approach is applied in handling cases relating to "mini-storages"; LandsD has not initiated any special actions targeted at "mini-storages".

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

(1) LandsD does not have statistics on the number of units in industrial buildings being used and rented out for "mini-storages".

(2) Whether a "mini-storage" is in breach of the land lease cannot be generalised and depends on the actual operation of the "mini-storage" concerned and the terms and conditions of the relevant lease of the lot. Taking a "mini-storage" in an industrial building as an example, if the relevant land lease specifies or permits "industrial" use only, the operation of any godown, including "mini-storage", is in general in breach of the land lease. For industrial buildings whose land leases specify "industrial and/or godown" use or "godown" use, LandsD has recently sought legal advice again and is of the view that a "mini-storage", which generally stores personal belongings or domestic items for customers, will not be considered to be in breach of the "godown" use stipulated in a land lease, even though goods stored in such a "mini-storage" are not the same as those stored in conventional godowns. Nonetheless, if an industrial building unit were to operate as a "mini-storage" in name but in fact was used not for godown but for other purposes such as office or retail purposes, it would not be in compliance with the "godown" use stipulated in the land lease.

We believe the above can help the industry understand our position and alleviate any unnecessary concerns. Nonetheless, we would like to reiterate that whether a "mini-storage" is in breach of land lease will depend on the operation of that "mini-storage" and the lease conditions of the lot concerned and cannot be over-generalised.

So far, there are only a handful of cases where the operations of "mini-storages" in industrial buildings are considered to be in breach of the land lease. LandsD will take into account the above overall considerations and assess each case based on the actual operations. If there is a breach of the lease conditions, LandsD, as the landlord, will take lease enforcement actions; such actions do not involve prosecution. LandsD will issue a warning letter to the owner concerned, requesting rectification of the breach. If the owner does not rectify the breach by the deadline, LandsD will register the warning letter at the Land Registry, commonly known as "imposing an encumbrance". In such a case, the public will know about the breach relating to the property concerned by obtaining information from the Land Registry.

In general, even if a particular use is not in compliance with the lease conditions, there is an established avenue for an owner to apply for a short term waiver to have the restriction temporarily waived upon payment of a waiver fee, or the owner may even apply for a lease modification upon payment of land premium. LandsD will process such applications according to the established mechanism.

(3) According to the Definition of Terms agreed by the Town Planning Board, "mini-storage" use is categorised as a type of "non-polluting industrial use" which is always permitted within "Industrial" zone or "Other Specified Uses" annotated "Business" ("OU(B)") zone from the planning perspective. In other words, industrial buildings located at "Industrial" or "OU(B)" zones are eligible to be used for "mini-storage" use, so long as they are in compliance with the lease terms and conditions or their owners have obtained the relevant waiver (including the special waiver for wholesale conversion of industrial buildings). Whether or not individual owners would use their industrial buildings for "mini-storages" is a commercial decision driven by the market.

Ends/Wednesday, April 29, 2015
Issued at HKT 14:30