Note on the basis for the computation of Crown rents in Hong Kong, and on the development clauses usually inserted in
a lease.
Enclosure 1.
46
Introduction.
(1) The Island of Victoria and Kowloon Peninsula on the mainland are ceded to Great Britain in perpetuity. The areas of New Kowloon and the New Territories are only leased to Great Britain, the lease expiring on 30/6/1997.
(2) All land in the Colony is Crown Land and freehold tenure is not recognised.
(3) In the case of land on the Island of Victoria and in Kowloon the modern practice is to grant leases by way of sale, by public auction or by private treaty for a period of 75 years renewable for one further term of 75 years at a re-assessed Crown Rent.
(4) In regard to leases in the areas of New Kowloon and the New Territories, it is customary for the tenure to be for the whole period of the Crown's own lease, less the last three days thereof. This is expressed as a lease of 75 years from 1/7/1898, renewable for a further term of 24 years less the last three days thereof at a re-assessed Crown Rent.
(5) The procedure of sales by public auction dates back to instructions contained in the Secretary of State's despatches No. 109 of 15/4/1849 and No. 133 of 26/10/1867. In these despatches it was ruled that a moderate rent should be fixed end a large premium secured for the lease of Crown Land in the Colony, and that the competition at public auction sales of land should be made to turn on the amount of premium to be paid, not on the amount of rent.
(6) In the earlier history of the Colony it was the custom to grent leases for 999 years at a fixed annual Crown Rent with no provision for re-assessment.
Assessment of Crow Rent.
(1) The annual Crown Rent payable as from the date of sale is fixed in accordance with graded zones for the areas in question, and such grades, although having general regard to the relative value of one district as compared with another, are not directly based on either the improved or the unimproved value of any one particular site in each zone.
(2) It is therefore fair to say that the annual Crown Rent for a particular lot bears no direct relation to the improved value of the site.
(3) Re-assessment of Crown Rent can only be enforced at the expiry of the term of the lease - usually 75 years.
Development Clauses.
(1) Development clauses of the following types appear in all . "Conditions of sale":
(a)
provision regarding the formation of the site to the satisfaction of the Director of Public Work
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