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Lands Department follows up on the telephone exchanges in breach of uses specified in land lease

In response to media reports on HKT Limited’s seven telephone exchanges in suspected breach of uses specified in the land lease, a spokesman for the Lands Department (LandsD) said today (March 20) that relevant District Lands Offices (DLOs) have already checked the lease conditions and inspected six of the telephone exchanges. Specific details are as follows.
 
Parts of the seven telephone exchanges in question are:

 1. G/F, Tsuen Wan Telephone Exchange, No. 303 Castle Peak Road, Tsuen Wan, New Territories
 2. G/F, Yuen Long Telephone Exchange, Nos. 170-184 Kau Yuk Road, Yuen Long, New Territories
 3. 9/F, Mong Kok Telephone Exchange, No. 37 Bute Street, Mong Kok, Kowloon
 4. G/F, Lai Chi Kok Telephone Exchange, No. 2 Yuet Lun Street, Lai Chi Kok, Kowloon
 5. 10/F, East Telephone Exchange Tower, No. 38 Leighton Road, Causeway Bay, Hong Kong
 6. 24/F, West Exchange Tower, No. 322 Des Voeux Road Central, Sheung Wan, Hong Kong
 7. Basement, Lockhart Telephone Exchange Tower, No. 3 Hennessy Road, Wan Chai, Hong Kong
 
Except with the telephone exchange numbered (5) above, the DLOs concerned have discovered that the remaining six telephone exchanges have been converted to customer service centres suspected in breach of lease conditions. After considering legal advice, the DLOs are in the process of issuing warning letters to the owners requiring them to rectify the breach, otherwise the department will take further lease enforcement actions. As for the one remaining (i.e. No. (5) mentioned above), the DLO concerned expects to complete inspections in the near future.
 
On media reports that DLOs had notified the owner before conducting an inspection, the spokesman responded that DLOs will send their staff to conduct inspections upon receipt of complaints or referrals and, depending on the circumstances, owners will normally not be notified in advance. However, as the LandsD acts in accordance with the land lease conditions and there is no legislation empowering its staff to enter private premises to conduct inspections without permission, if they cannot enter the premises for site inspection and investigation, they will normally leave a contact slip at the premises or take the initiative to liaise with the owner, so as to arrange a date and time slot for entering the premises as soon as possible. Besides, LandsD’s staff will collect relevant information or evidence outside the premises or through other means and seek legal advice to confirm whether the land lease conditions have been breached.
 
The LandsD reiterates that the owner has the responsibility to rectify breaches found at its premises. Failure of rectification within a specified period will result in registration of the warning letter, issued by the LandsD, at the Land Registry, commonly known as "imposing an encumbrance"; and the LandsD reserves the right to take further lease enforcement actions. Even if the breaches were rectified, if the concerned use in breach of the land lease is repeated in future, the LandsD will consider taking further action after seeking legal advice, including re-entry of the land or vesting the property in the Government, or taking civil action according to legal advice.
 
As far as the seven telephone exchanges are concerned, relevant DLOs have been advised that applications for temporary waivers/permission in respect of four cases will be submitted by the owner to permit use other than those allowed under the lease. The applications, once received, will be processed in accordance with the established mechanism, and if approved, will be subject to an administrative fee and a waiver fee. A retrospective fee to be assessed at market rental dated back to the period from identification of the breaches to the grant of the waiver will also be charged.
 
The LandsD stresses that it is the responsibility of the owner to comply with lease conditions. Even when the owner submits application for temporary waiver/permission to the LandsD in respect of the lease breaches, the department would still consider taking parallel action to register the warning letter at the Land Registry (commonly known as "imposing an encumbrance") so to allow members of the public and creditors (if any) of the owner knowledge of the lease breaches. If a case does not meet the prescribed criteria or the regularisation application is rejected, the LandsD will take lease enforcement actions against the breaches as soon as possible.

Ends/Tuesday, March 20, 2018
Issued at HKT 21:16

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