D.
2.
3.
- 3-
Factory was cleared in 1976. In addition to an ex-gratia allowance in the sum of $7,000, she was granted a short term tenancy for the use of a site of 2,800 sq. ft. at 3, Yuet Lun Street, KX 506 (K.L.), Lai Chi Kok, Kowloon. The site was designated for open and covered storage purpose. She was given by Crown Lands & Survey Office to understand that she could erect a structure thereon to continue the operation of her factory. The term of the tenancy was for a year certain and the rent was fixed at the flat rate of $3/sq. ft., which means $8,400 per annum.
Mrs. LAW is aggrieved because in a letter dated 27.7.77 the Crown Lands & Survey Office advised her that, with effect from 13.4.78, the rent would be revised to $33,800 per annum, i.e. about 400% more than the current rent. The matter was pursued with the Principal Government Land Agent, who indicated in his reply that in order to bring the standard rate of short term tenancies to more accurately reflect the market value of the land, it has been revised at $130 per m p.a. for covered areas and $65 per m p.a. for open storage areas. Furthermore, it was pointed out that the revision of the rentals of short term tenancies had been considered on several occasions by Secretary for Environment, R.G.(L.C.) and C.L.&Š.0.
It should be noted that in this case the increase has been due to the introduction of a two-tier rate of rental, i.e. the rate for covered area and that for open area, rather than to the change of tenure. While the current rent has been fixed at a flat rate and as most of the site in question is covered by workshop structure, the rate of $130/m2 has been applied and, hence the 400% increase.
Conclusion
Whilst the philosophy of charging market values for short term tenancies cannot be disputed, Members may wish to consider whether the increases should be phased in by a certain percentage each year until the full market value has been reached in order to avoid the extreme hardships which the immediate imposition of full market values can cause.
UMELCO Office
21.11.77