Vested interests resist reform of Building Management Ordinance We wrote last week about the current consultation period for proposing changes to the Building Management Ordinance which ends on February 2. This is an issue which generates a large number of complaints for the Independent Commission against Corruption and relates to the relations between owners committees, property management companies, contractors, and architects. The government set up a review committee in 2011 which produced an interim report in 2013 suggesting changes to the BMO. But in the opinion of critics these changes do not even come close to dealing with some of the more basic problems and they believe the BMO only provides a regulatory veneer while proving utterly ineffective in safeguarding the interests of owners. One example is the ambiguity in the ordinance referring to the holding of annual general meetings. Rather than saying it is required to "convene and hold" an AGM no later than 15 months after the previous one, it simply says "convene". This ambiguity has been used by at least one MC to our knowledge, supported by legal advice, to entrench the management for a period of six years, far in excess of the supposed limit. Lawyers used the ambiguities in the BMO to facilitate this, against the wishes of minority owners. Another serious ambiguity relates to the documents that an owner is entitled to inspect. In one instance we are aware of, individual owners were informed by lawyers that they had no right to inspect tender documents as part of their due diligence before being asked to vote on a renovation project of over HK$100 million, costing individual owners almost HK$1 million each. Similarly, owners were told they couldn't view the audited accounts of the incorporated owners, and that according to legal advice, based on its understanding of the BMO, the accounts need only be "laid before at AGM". Strange but true. This advice was derived from lawyer's interpretation of the BMO, which in effect was used to usurp rather than protect owner's rights. These are just some of the many issues which the interim report of the BMO review committee appears to have overlooked, but which should be included if the BMO is to serve its purpose in protecting owners rights. Another key issue is where do owner's turn to for redress? Matters relating to the BMO are overseen by the Home Affairs Department. But it merely offers advice and is ineffective. When somebody feels aggrieved by the actions of his stock broker or portfolio manager they can make a complaint to the Securities and Futures Commission. Although building management can sometimes involve bigger sums than financial investors, their avenue to redress is via the lengthy and potentially crippling expense of the courts, the Lands Tribunal, or complaining to the disciplinary body of the relevant professional organisation. But these organisations are notoriously opaque and slow moving. For example, it took about three years for the Architects Registration Board to administer a slap on the wrist to Michael Chiang Hong Man in the form of a written reprimand, having found that he committed misconduct. Critics of the current BMO feel that it is riven with ambiguity and loose wording which property management companies and their expensive lawyers can drive a truck through, at the expense of individual owners. This is why critics would like to see the introduction of a Building Affairs Tribunal, which like the Labour Tribunal, would not allow legal representation but could provide cheap and quick dispute resolution. But there are powerful vested interests that would prefer the BMO to remain as it is.