G.S. 84
RESTRICTED
- 5 -
XCRI(77)19
In the case of those permittees who have already agreed to the new rates, appropriate reductions will be made in the next year's rentals. If the standard rentals are increased on review, the rates may have to be adjusted, but the principle of staging will be retained. It should be noted, however, that even with the introduc- tion of stage in rentals, conversions will still result in considerable increases in individual payments to Government, particulary where the licensee has constructed substantial structures in the permit area. But a special concession in these cases would be unfair to others who must pay the market price for the land which they use, and it is not now considered appropriate.
12th December 1977
COUNCIL CHAMBER
RESTRICTED
UMELCO RESTRICTED
Ref. POC 13.15/77 POC 1574/77
POC 1912/77
UMELCO Paper No. 473
For discussion at the UMELCO meeting of 25.11.77
Excessive Rent for Use of Crown Land
under Short Term Tenancy
A
In the last two months,
UMELCO Office has received
three separate complaints on the sharp increases in rent for the use of Crown land. As there is some difference in the backgrounds to the increases, these cases are summarised separately below:-
A. POC 1315/77
:
1. Mr. TSO Chi-hung's grandfather, Mr. TSO
Lui-chung, was the founder of a hand-painted porcelain business, trading in the name of Yuet Tung China Works. In 1958, the business was resited from Tai Hang Tung to Lot LZ3726, Tai Woh Ping, Kowloon, upon the clearance of his squatter workshop structure. Crown Land Licence No. K1711 was issued to Mr. TSO. Lui- chung. In 1962 a new Crown Land Licence No. K2468 was issued to replace K1711. Although this new licence expired on 30.1.63, the fees specified therein in the sum of $12,100 p.a. continued to be collected by Government until June 1977 when the permittee was notified by the Chief Estate Surveyor/Urban Estate, that in keeping with Government policy, it was proposed that the tenure under which he held the land should be converted into a short term tenancy for a year certain w.e.f. 1.5.78. The new rental is to be $124,800 p.a., that is a tenfold increase, which has been calculated on the standard basis of $130/sq. metre (10.76 sq. ft.) for the land occupied by buildings and $65/sq. metre for open storage area.
2.
3.
3
Mr. T Chi-hung objected to this proposal on the following grounds :-
(i)
The new rent is 1000% of the current fees.
(ii) The family had spent a substantial
sum of money on improving the site, including construction of an access road of about 4 mile long and the drilling of a well.
Enquiry was made with the Director of Lands & Survey about for the logic behind the change
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UMELCO RESTRICTED
2.
A
B.
C.
4.
of tenure and the overall policy of fixing the rent under a short term tenancy. In his reply, Director of Lands & Survey said that the standard statutory fees for a Crown Land Licence bear no relation to the market values. The change in policy is to ensure that a more realistic rental is paid for the use of Crown land He added that this programme of conver- sion to short term tenancies has been in operation for some time and he is unable to consider a reduction in these rentals which are now standard for all conversion cases.
The case was presented to Hon. T.K. ANN, CBE, JP for his consideration. His attention was drawn to the fact that substantial investment had been put in the land, that 1000% increase is something of a shock to the lessee and that gradual increase by several stages would appear to be more acceptable. The Honourable Member considered that this could be a general problem and requested this to be raised at a UMELCO meeting.
POC 1912/77
1. By a letter dated 12.11.77, the Hong Kong
Lyemun Merchants Association Ltd. complained to this Office about steep increases in rents for the use of several plots of Crown land currently under 3 Crown Land Licences (No. K3042, K3008 and K1393) and a short term tenancy No. KX514. It is alleged that during the last several decades the rate for the standard statutory fees under Crown Land Licences . has been $0.25 per sq. ft. while upon conversion to short term tenancies the standard rent intro- duced would be $130/m (i.g. about $12/sq. ft.) for covered area and $65/m (i.e. about $6/sq. ft.) for open area. The complainants claimed that this increase is "unheard of". In the case of Crown Land Licence No. K3042, the former statutory fee was $333 but with effect from 26.10.77 the rental would be $26,260, which represents a 78-fold increase.
2.
•
:
As further details of the increases have to be obtained, and as the Association's letter was received only on 17.11.77, this serves as an interim report only. But in any case, it is expected that Government would give a similar reply to that in POC 1315/77.
POC 1574/77
1.
Madam LAW HAR Sio-ying's squatter workshop, trading in the name of LAW LEE Kee Woodwool
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