Page 33 of 115
62
HONG KONG URBAN COUNCIL
MR. SAN STEPHEN WONG HON-CHING (in Cantonese):-Thank you, Mr. Chairman, about Mr. LAU's answer, the last paragraph on page 4 of the answer refers to the words 'plan and organize'. Of Course, we do not expect Wembley to organise events. But if you say that systematic planning is also not within the jurisdiction of Wembley, then how can Wembley do marketing? I am not quite happy with this if Wembley does not perform the duty of systematic planning. So I would like to know whether systematic planning is included in the jurisdiction of Wembley?
MR. STEPHEN LAU MAN-LUNG (in Cantonese):--Mr. Chairman, I am not very good at English. 'Plan and organise' refers to the event and not planning with regard to the Stadium. It refers to the event.
(6) MR. ANNA TANG KING-YUNG asked the following question (in Cantonese): Recently, complaints have been received from market tenants that the rental increase for some stalls is between 200% and 300%, for example, those of the Wanchai Temporary Market. The rents are said to have been assessed by the Rating and Valuation Department. What factors have been taken into account in calculating the rate of increase? Had the affected tenants been given sufficient notice before the new scale of rents came into effect? Are there any channels of appeal if the tenants are dissatisfied with the increase?
MR. IP KWOK-CHUNG, CHAIRMAN OF THE MARKETS AND STREET TRADERS SELECT COMMITTEE, replied as follows (in Cantonese):-This three-part question concerns rental revision in UC markets. The first part asks what factors have been taken into account in calculating the amount of increase.
In a rental revision exercise in connection with renewing tenancy agreements, the Department first requests the Commissioner of Rating and Valuation (CR&V) to advise on the current rental valuation of the stalls concerned. In his assessment of the new Fair Market Rental (FMR), CR&V takes into account the trading potential of the stalls. Factors such as the population served by the market, the permitted trades of the stalls and the relative positions of individual stalls in the market, and the extent of outside competition, are all taken into account as relevant to the trading potential of the stalls in question. Upon receipt of the FMR information from CR&V, the new stall rentals will be determined in accordance with the Council's approved market rental formula. It should be emphasised that CR&V does not assess or set out rentals.
The second part of the question asks whether sufficient notice is given to tenants before their new tenancy agreements with the revised rental become effective. Normally, tenants will be informed of new rentals at least one month and usually 2 to 3 months before their tenancies expire. Sufficient notice is therefore given to the tenants before they decide whether or not to sign their new tenancy agreements.
HONG KONG URBAN COUNCIL
63
The third part of the question enquires whether there are channels of appeal if market tenants are dissatisfied with their rental increase. Tenants may of course make use of the usual channels to approach the Department of Urban Council to express their dissatisfaction on the matter of rental increases and if appropriate, CR&V can be requested to reconsider their rental advice. However, it is a fact of life that rental increases whether residential, commercial or within our UC markets are, quite naturally, never welcome, but UC tenants can be assured that any such increases are always very carefully considered before being promulgated. Nevertheless, market rental policy is currently under review by the Department and the existing policy will be discussed soon within the Market Sub-Committee of the Markets and Street Traders Select Committee.
MS. ANNA TANG KING-YUNG (in Cantonese):—May I ask two supplementary questions? According to paragraph 2 of the main reply, it is said that the factor of outside competition is also considered. Is the information in this regard supplied by the stall-holders, nearby residents or the Urban Services Department? Is the assessment made by the Rating and Valuation Department without any on-the-spot observation? My second question is: If they are not satisfied with the rental increase, then they approach the Department and express their dissatisfaction. Do we have cases to show that rent reduction was effected as a result of such approach to the Department?
MR. IP KWOK-CHUNG (in Cantonese):-There are two questions—The first one refers to the factor of outside competition. It is done by the R&V Department and of course, USD's views and views given by tenants are also taken into consideration. The second question asks whether we have had cases to show that there is a reduction of rent after complaint. The answer is 'yes'. After lessees in Ngau Tau Kok Market have complained that the revised rent was too high, the rental was reduced. What I mean is that the percentage of increase was reduced and it was not of course a reduction in the previous rental.
THE HONOURABLE LI Wah-ming (in Cantonese):—As far as policy is concerned, does that mean that the rental is assessed by R&VD and we more or less accept that without question? Do we have any flexibility in adjusting it upwards or downwards? There has been a case where the assessment from the R&VD was lower than the existing rent. What do we do if we are faced with such situation?
MR. IP KWOK-CHUNG (in Cantonese):-There are two parts to Mr. Fred Li's question. First, how do we deal with the assessment made by the R&VD. If the Fair Market Rental proposed is less than 100%, full FMR will be achieved in the 3rd year by three equal annual increases. But if it is over 100%, the re-adjusted amount will be only 75% of the FMR to be attained in the 3rd year by even annual increases. If the percentage increase is more than 300%, the re-adjusted amount will be only 60% of the FMR to be attained in the 3rd year
Page 33 of 115