Bill to speed up development of old buildings

PUBLISHED : Wednesday, 27 January, 2010, 12:00am
UPDATED : Wednesday, 27 January, 2010, 12:00am

Compulsory en bloc acquisition of units in old and neglected blocks in Hong Kong for redevelopment could be sped up by policy changes the government is proposing in a bid to get rid of buildings that pose 'a serious threat to public safety'.

The changes are contained in a bill published last week that calls for the introduction of mandatory inspection every 10 years of buildings that are more than 30 years old, and mandatory checks on windows in such buildings every five years.

The bill will be debated in the Legislative Council on February 3 and, if passed, the provisions are likely to take effect late next year.

The bill provides that owners of units in old blocks will be required to engage qualified inspectors to check their buildings and windows, and to undertake the necessary repair works specified by the inspectors.

The move follows the lowering of the minimum number of sales acceptances by unit holders to 80 per cent from 90 per cent before a developer can compulsorily acquire a building more than 50 years old.

The lower threshold will take effect from April this year.

Property analysts say as a result of the changes, more flat owners could consider selling their units to developers rather than paying for the mandatory repair works.

Tsim Chai-nam, the director of Clerk of Works Services, estimates the inspection cost at HK$4 to HK$5 per square foot, possibly reaching HK$4,000 per household if the inspection includes common areas.

Repair costs could begin at about HK$3,000 for the repair of drainage systems, rising to HK$50,000 if external walls and windows need repair.

One occupant of an old building, Chinese medicine practitioner Kwan Chi-yee, welcomed the proposed mandatory inspections.

Kwan opened a clinic in a 600 square foot flat in a 40-year-old building on Hennessy Road 20 years ago.

'This is a good policy. Many people have been hit by falling concrete and windows from old buildings in the last few years. The policy can ensure the safety of pedestrians,' he said. But he worries construction firms and inspectors could raise their fees if the policy is introduced.

Sito Lai-jin, 82, who lives alone in a 500 sq ft flat in a building more than 40 years old at Fuk Wa Street in Sham Shui Po, worries about the plan. 'I am retired and have no income. How can I afford the inspection and maintenance costs? I hope the government will offer a subsidy,' she said.

Charles Chan Chiu-kwok, the managing director of Savills Valuation and Professional Services, says repairs on old buildings could cost unit owners from HK$10,000 to HK$100,000.

He believes the new policies will encourage flat owners to sell their units rather than pay the cost of mandatory repairs.

'Changing windows and [fixing] drainage will not help flat owners sell their units at a higher price. Spending on repairs cannot be offset by gains in property prices,' he said.

'But flat owners can improve their living environment by selling their units at a good offer from the developers. It will also be easier for the flat owners to sell their units after the sale threshold has been cut to 80 per cent of the total ownerships.'

Tsim said Clerks of Works would benefit from the policy changes but he worried flat owners might suffer.

'I expect many construction firms will provide free property inspection to lure flat owners. They may overstate the problem of the buildings to get more renovation jobs,' he said.

Standards were another problem.

'Some construction companies may not fully repair the buildings so if the problems recur, they can get another job. Thus it is important to monitor the standard of repair works,' Tsim said.

He said most flat owners might be willing to renovate their buildings in the early stage of discussions.

'However, they will have different opinions when they negotiate the costs. Some will try to lower the costs by cutting some of the works while others may insist on a complete repair.'