An archaic licensing system that governs at least 15,000 government sites across the city is in urgent need of review to avoid land disputes, observers say.
The so-called crown land licences were introduced in the 1970s at nominal fees to rationalise the prevalence of squatters occupying government land.
This may be less relevant today, but the outdated government land licensing (GLL) policy, coupled with loose enforcement, have turned parts of the New Territories into lawless hotbeds of land abuses and adverse possession claims.
Policy think tank Land Watch chairman Lee Wing-tat cited loopholes in the GLL policy, warning that more leasing disputes would arise as the city forged ahead with developing rural areas.
"The government must start to think about how to review this policy or risk facing more resistance from these occupants," Lee, a former Democratic Party chief and lawmaker, said.
"Some occupants spend lots of money on refurbishing and maintaining a property only to be kicked out because they have no legal ownership rights."
Last month, a Canadian-Chinese man told the South China Morning Post how gangster-like intruders barred him from returning to a property on a licensed Sai Kung site that he had been managing on behalf of the deceased licensee.
The man's case is debatable as the licences are, by law, not transferable and are to be cancelled immediately upon a licensee's death to prevent misuse of the land.
But Lee said that without mandatory checks requiring confirmation of a licensee's death, the sites could switch hands indefinitely. Disputes over occupation and adverse possession would be almost inevitable.
In many such leases, licensees pay as little as HK$100 a year for more than 3,000 square feet, and are allowed to sublet the area.
The Lands Department confirmed that "upon the death of a licensee, the licence will lapse and cancellation will proceed in accordance with the applicable procedures". But "immediate family members can apply for transfer of a GLL" and the relevant District Lands Office would consider the applications on their "own merits", it said.
The department gave no time frame for resuming the land. Non-compliance with GLL terms and conditions would be investigated only upon receiving a complaint or referral, it said.
It also failed to provide the Post with the exact number of GLLs issued. But a 2012 Audit Commission report on the management of government land revealed there were about 15,000 as of December 2011. At least 500 plots are inside country parks.
The critical report urged district lands offices to "take prompt follow-up action … and cancel land licences in a timely manner upon detection of serious breaches of licence conditions".
In 2012, the department revoked a Sai Kung GLL held by Brenda Chau, the widow of celebrity Chau Kai-bong, after it found illegal structures inside her property.
Lee said the government had been adopting a "tolerable occupant" approach in dealing with GLLs since the '70s and '80s.
"The idea was that if the new occupant taking over after the death of the licensee continued to pay land dues, the authorities would tolerate occupation of the government lot," he said.
Academic and former Lands Department deputy director Roger Nissim said the department was reluctant to tackle these disputes because of a lack of manpower. "Lease enforcement is pretty much the last thing on their list," he said.
Nissim disagreed there was a policy loophole, considering it was the occupant's responsibility to look after his own property and he could legally make a claim of adverse possession after 12 years.
"He may have been living there, but once the original licensee dies, anyone can come and claim adverse possession … This is not a loophole, it's the law."