Legco divided over help for developers
Lawmakers are divided on a proposal to help developers acquire old buildings for redevelopment, with some critics saying owners should be helped to get a fair sale price instead of being left to fight alone against developers in court.
The Legislative Council will hold a hearing next month to gather views, and is due to discuss the legislation after the summer break.
At present, a developer must buy 90 per cent of the properties in old residential and industrial blocks in order to force an auction of the remainder. The plan is to lower the threshold to 80 per cent for three types of buildings, including those with all properties but one acquired, industrial buildings more than 30 years old and residential blocks over 50. The reserve price is set by the Lands Tribunal after considering both the unit owner's and the developer's assessments.
At the development affairs panel yesterday, Secretary for Development Carrie Lam Cheng Yuet-ngor defended the proposed measure against criticism from the League of Social Democrats' Albert Chan Wai-yip, who said it would help developers rob people of their flats.
'On average, flat owners in forced sales receive offers that are 1.8 to 2.2 times the value of their properties, with the value of redevelopment potential taken into account,' she said.
But since the law was put in place in 1999, only two out of the 20 compulsory sale cases saw the developer bidding against others for the remaining flats. In other cases, the developer took over the property without competition, causing doubts that this process secures the highest price.
While he found lowering the threshold acceptable, Democratic lawmaker James To Kun-sun, said: 'I am not sure whether the court has done justice when it decides a building should be redeveloped.'
After the meeting, he explained that only one case for compulsory sale - a block in Mong Kok's Tung Choi Street - had been rejected so far, with the developer not appealing. 'This means the upper courts have not discussed this type of case and there is no precedent to guide judges,' he said.
He suggested the government could assess the property value as a third party when the price was disputed, rather than leave the flat owner to hire lawyers and surveyors for court proceedings.