URA to play deal-maker over properties
The Urban Renewal Authority is to take up a new role as a deal-maker between flat owners and developers who want to acquire and redevelop their properties.
The move is intended to set an example for estate agents, who are often accused of using pressure tactics and other dubious methods to persuade small property owners to sell flats to developers.
The URA also hopes its participation could help speed up urban redevelopment in future.
Traditionally, the authority's job has been to acquire old properties and relocate residents. While it would continue playing that role, the URA planned to also act as a match-maker, bringing flat owners from the same building, who want to collectively sell their properties, and developers together.
Announcing the new policy, which forms part of a revised urban renewal strategy, URA chairman Barry Cheung Chun-yuen said this could help small property owners get a fair deal.
'We know some property owners want to band together and sell their properties to investors or developers.
'But they [small property holders] may not be savvy in such sales. This is why the URA will step in and act as an impartial, credible middleman, helping them through these complicated processes,' he said.
Under a pilot scheme to be launched in two months, flat owners from the same building will be able to approach the authority if their application for collective sale is backed by 50 per cent of the owners and if their block is in disrepair. The URA will collect HK$20,000 from owners in each building to defray administration costs.
The authority, which will not directly acquire properties from them, will send officers to persuade other owners to accept the deal. It will appoint a surveyor to advise owners on what are considered fair prices.
Once a certain level of agreement is reached - 80 per cent of ownership for buildings older than 50 years and 90 per cent for newer blocks - the authority will organise an auction in which developers can bid for a majority share.
Developers who do acquire a majority share can then apply for a court order to compel the remaining minority owners to sell their flats.
Owners will have to contribute 1 per cent of the sale proceeds to the URA, which will use the money for future redevelopment projects. The URA would not provide compensation for affected tenants or relocate them, Cheung said.
If the URA cannot get enough owners to agree to a deal to sell their flats within two years, the attempt will come to an end.
Chow Sui, a resident of Wan King Street in To Kwa Wan who has worked with her neighbours on collective bargaining with a private agency, felt the URA would be a better middleman.
'I would expect the authority to provide more information and advice. It's been hard for us to press for a higher price over the past two years,' she said.
But Civic Party lawmaker Margaret Ng Ngoi-yee said the new initiative was not pragmatic.
'If it is intended to set a good example for estate agents, the government should strengthen the Estate Agents Authority's monitoring and enforcement rather than rely on a couple of projects by the URA.'
How the Urban Renewal Authority will help in private redevelopments
Owners of old buildings can ask the authority for help after getting at least 50 per cent of the owners to agree to a sale
The URA will charge them HK$20,000 and appoint a surveyor to value the properties
It will try to persuade 80 to 90 per cent of owners to agree to a sale within two years and organise that sale
The URA will receive 1 per cent of the sale proceeds
The developer who buys the majority stake in the building can apply to the court for the compulsory sale of the remaining properties