HOS flats guesthouse scheme may be illegal
Sources say Housing Authority ignored private advice questioning conversion
The Housing Authority has disregarded legal advice that converting two blocks of subsidised Home Ownership Scheme flats into guesthouses for mainland tourists could be illegal, according to legal sources.
They say the authority has stuck with an in-house legal opinion which supports the proposal, rather than heed the advice of private practice lawyers.
The South China Morning Post understands that the senior counsel told the authority the plan could exceed its powers under the Housing Ordinance.
But a spokeswoman for the authority said there was no legal problem with the project. 'The authority has studied and will continue to study all aspects of the issue. So far, it has no problem,' she said.
The spokeswoman did not say whether the authority had sought an external legal opinion.
Abraham Razack, the legislator representing the construction sector, intends to use today's Legislative Council sitting to question the plan's legality.
A year ago, the Secretary for Housing, Planning and Lands, Michael Suen Ming-yeung, announced the suspension of sale of HOS flats as part of efforts to boost property prices - leaving some 25,000 unsold flats empty.
The authority has explored various ways to dispose of the surplus flats. It announced in August that it wanted to invite tenders for the conversion of two blocks in Lam Tin and Diamond Hill, containing 744 flats, into guesthouses for mainland tourists. The plan has met strong opposition from hotel operators, who complained the government was intervening in their free-market operations.
The authority has received eight expressions of interest in the project from developers.
Eric Cheung Tat-ming, an assistant law professor at the University of Hong Kong, said the authority had no legal power under Section 4 of the Housing Ordinance to convert the flats into guesthouses. The section states the authority shall exercise its powers to secure provision of housing and associated amenities for the people.
'The key question here is about securing the provision of housing. Providing services akin to hotel accommodation does not fall within the definition of housing,' he said. 'If the Housing Authority signed any contract with a company on such a project, the contract would be voided.' In legal terms, it would be acting ultra vires - meaning beyond its powers - he said.
'If the authority [really wants to proceed], it can either surrender the flats under the Home Ownership Scheme to the government and let it handle the plan, or the Housing Ordinance can be amended to expand the powers and duties of the authority,' he said.
