1966 — Page 201

Urban Council Proceedings 市政局議事錄 All AI Reviewed

Page 201 of 279

374

HONG KONG URBAN COUNCIL

affairs. Conducted along proper lines, the meetings and personal contact among the residents themselves in the course of tackling their common problems will tend to encourage good neighbourliness, reduce friction and promote more effective responsibility in the maintenance of their common property. This cannot be the case if management is undertaken by a Government agency in whose work the residents would take no active part. The success of these associations would however have to depend on the co-operation of the residents themselves. When co-operation is not forthcoming a residents association has no means to enforce its rules uniformly among all the residents in that building. Then there are also cases where residents for one reason or another are simply not interested in co-operation together to form an organization under any circumstances.

Therefore, for an association of residents to become effective, it must have some form of legal backing. At the moment the rights and obligations of owners of multi-storey buildings are set out in a document known as a Deed of Mutual Covenants. Each apartment building has its own deed which also sets out its rules of management and the way expenses are to be shared. This document is the invention of the legal profession and is a unique device in Hong Kong to enable the sale and ownership of individual units in a multi-storey building. It is done by an assignment of an undivided share of the land on which the building stands coupled with the right to the exclusive use and enjoyment of a shop, a flat or a self-contained unit in that building.

The standard of these documents has improved with experience accumulated during the last 15 years. A casual comparison will tell that provisions in earlier documents are not as comprehensive and detailed as those in present day documents. On account of the importance that a Deed of Mutual Covenants plays in the ownership and management of apartment buildings, much thought has been given by the Law Society to the idea of drawing up a standard form (along the lines of Table "A" of the Companies Ordinance) or some other standard form similar to the standard Conditions of Sale or Law Society's Conditions of Sale as used in England. It was found, however, that such a draft to meet every reasonable contingency would be most complicated. Therefore, the Conveyancing Sub-Committee of the Law Society has, instead of devising a standard form, recommended standard requirements to be included in every Deed of Mutual Covenants. This will ensure a reasonable standard for all future instances. No thought, however, appears to have been given to supplying terms missing in earlier documents, which present day practitioners would have readily included. It is often the older type of postwar apartments that are now beset by management problems.

I give an illustration of the inadequacy of some of these provisions. There is usually only one main water supply to all the flats, and a covenant to contribute a due share of the water rates. If one of the owners fails so to contribute there is no right for any one to disconnect his supply, unless the power to disconnect is clearly provided for in the Deed. An agreement to pay a due share of the costs for repairs is in many cases either too vague or unfair as the flats, and particularly the shops on the ground floor are of different rateable values and a heavy item of expenditure may work injustice and hardship.

HONG KONG URBAN COUNCIL

375

covenant to contribute a due share of the water rates. If one of the owners fails so to contribute there is no right for any one to disconnect his supply, unless the power to disconnect is clearly provided for in the Deed. An agreement to pay a due share of the costs for repairs is in many cases either too vague or unfair as the flats, and particularly the shops on the ground floor are of different rateable values and a heavy item of expenditure may work injustice and hardship.

In recent years residents and owners of multi-storey buildings have become more management conscious. Developers have learnt that to attract buyers or tenants their buildings must have proper management. It is therefore essential to supply the deficiencies in the earlier documents by legislation. The object is to supplement them with provisions not found in the original documents so long as they do not basically conflict with the original terms. This will bring all earlier documents up to date. Further, the recent amendments to the Buildings Ordinance have rendered impossible of performance some of the Covenants contained in existing Deeds of Mutual Covenants relating to reconstruction. For instance no one knows what the result of a Demolition Order or the total or partial demolition of an apartment building would be when redevelopment and rebuilding on the original plan has been rendered impossible by amendments to the building regulations.

Mr. Chairman, in coming years when the early multi-storey buildings begin to fall into disrepair, problems such as I have mentioned will certainly arise. It is essential that provisions be made in advance to meet such contingencies.

At the same time there are many matters concerning developer, owner and tenant relationship which cannot be provided for in the Deed of Mutual Covenants. At present the obligations even for payment of monthly dues for maintenance and service rests with the owners alone, whereas in most cases the actual responsibility is passed onto the tenants. When the tenant fails or refuses to pay, the remedy is to go against the landlord who in turn has to seek reimbursement from the tenant. This often puts the owner in a difficult position particularly in cases where the tenant's excuse for non-payment is the unsatisfactory standard of service provided.

The position of the management or of the co-owners seeking remedy is no better. No remedy is possible when the defaulting owner is resident abroad leaving no address but only a relative to collect the rental. Even if the address is known, to take proceedings against such an owner would involve service of proceedings abroad and the expenses incurred will be such as to render the whole remedy unpractical. Even in normal cases the costs for proceedings in Hong Kong that can be recovered by a successful litigant is often only a

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Page 201 of 279 374 HONG KONG URBAN COUNCIL affairs. Conducted along proper lines, the meetings and personal contact among the residents themselves in the course of tackling their common problems will tend to encourage good neighbourliness, reduce friction and promote more effective responsibility in the maintenance of their common property. This cannot be the case if management is undertaken by a Government agency in whose work the residents would take no active part. The success of these associations would however have to depend on the co-operation of the residents themselves. When co-operation is not forthcoming a residents association has no means to enforce its rules uniformly among all the residents in that building. Then there are also cases where residents for one reason or another are simply not interested in co-operation together to form an organization under any circumstances. Therefore, for an association of residents to become effective, it must have some form of legal backing. At the moment the rights and obligations of owners of multi-storey buildings are set out in a document known as a Deed of Mutual Covenants. Each apartment building has its own deed which also sets out its rules of management and the way expenses are to be shared. This document is the invention of the legal profession and is a unique device in Hong Kong to enable the sale and ownership of individual units in a multi-storey building. It is done by an assignment of an undivided share of the land on which the building stands coupled with the right to the exclusive use and enjoyment of a shop, a flat or a self-contained unit in that building. The standard of these documents has improved with experience accumulated during the last 15 years. A casual comparison will tell that provisions in earlier documents are not as comprehensive and detailed as those in present day documents. On account of the importance that a Deed of Mutual Covenants plays in the ownership and management of apartment buildings, much thought has been given by the Law Society to the idea of drawing up a standard form (along the lines of Table "A" of the Companies Ordinance) or some other standard form similar to the standard Conditions of Sale or Law Society's Conditions of Sale as used in England. It was found, however, that such a draft to meet every reasonable contingency would be most complicated. Therefore, the Conveyancing Sub-Committee of the Law Society has, instead of devising a standard form, recommended standard requirements to be included in every Deed of Mutual Covenants. This will ensure a reasonable standard for all future instances. No thought, however, appears to have been given to supplying terms missing in earlier documents, which present day practitioners would have readily included. It is often the older type of postwar apartments that are now beset by management problems. I give an illustration of the inadequacy of some of these provisions. There is usually only one main water supply to all the flats, and a covenant to contribute a due share of the water rates. If one of the owners fails so to contribute there is no right for any one to disconnect his supply, unless the power to disconnect is clearly provided for in the Deed. An agreement to pay a due share of the costs for repairs is in many cases either too vague or unfair as the flats, and particularly the shops on the ground floor are of different rateable values and a heavy item of expenditure may work injustice and hardship. HONG KONG URBAN COUNCIL 375 covenant to contribute a due share of the water rates. If one of the owners fails so to contribute there is no right for any one to disconnect his supply, unless the power to disconnect is clearly provided for in the Deed. An agreement to pay a due share of the costs for repairs is in many cases either too vague or unfair as the flats, and particularly the shops on the ground floor are of different rateable values and a heavy item of expenditure may work injustice and hardship. In recent years residents and owners of multi-storey buildings have become more management conscious. Developers have learnt that to attract buyers or tenants their buildings must have proper management. It is therefore essential to supply the deficiencies in the earlier documents by legislation. The object is to supplement them with provisions not found in the original documents so long as they do not basically conflict with the original terms. This will bring all earlier documents up to date. Further, the recent amendments to the Buildings Ordinance have rendered impossible of performance some of the Covenants contained in existing Deeds of Mutual Covenants relating to reconstruction. For instance no one knows what the result of a Demolition Order or the total or partial demolition of an apartment building would be when redevelopment and rebuilding on the original plan has been rendered impossible by amendments to the building regulations. Mr. Chairman, in coming years when the early multi-storey buildings begin to fall into disrepair, problems such as I have mentioned will certainly arise. It is essential that provisions be made in advance to meet such contingencies. At the same time there are many matters concerning developer, owner and tenant relationship which cannot be provided for in the Deed of Mutual Covenants. At present the obligations even for payment of monthly dues for maintenance and service rests with the owners alone, whereas in most cases the actual responsibility is passed onto the tenants. When the tenant fails or refuses to pay, the remedy is to go against the landlord who in turn has to seek reimbursement from the tenant. This often puts the owner in a difficult position particularly in cases where the tenant's excuse for non-payment is the unsatisfactory standard of service provided. The position of the management or of the co-owners seeking remedy is no better. No remedy is possible when the defaulting owner is resident abroad leaving no address but only a relative to collect the rental. Even if the address is known, to take proceedings against such an owner would involve service of proceedings abroad and the expenses incurred will be such as to render the whole remedy unpractical. Even in normal cases the costs for proceedings in Hong Kong that can be recovered by a successful litigant is often only a Page 202 of 279

Baseline (Original)

279 Page 201 of 279 374 HONG KONG URBAN COUNCIL affairs. Conducted along proper lines, the meetings and personal con- tact among the residents themselves in the course of tackling their common problems will tend to encourage good neighbourliness, reduce friction and promote more effective responsibility in the maintenance of their common property. This cannot be the case if management is undertaken by a Government agency in whose work the residents would take no active part. The success of these associations would however have to depend on the co-operation of the residents themselves. When co-operation is not forthcoming a residents association has no means to enforce its rules uniformly among all the residents in that building. Then there are also cases where residents for one reason or another are simply not interested in co-operation together to form an organization under any circumstances. Therefore, for an association of residents to become effective, it must have some form of legal backing. At the moment the rights and obligations of owners of multi-storey buildings are set out in a docu- ment known as a Deed of Mutual Covenants. Each apartment building has its own deed which also sets out its rules of management and the way expenses are to be shared. This document is the invention of the legal profession and is a unique device in Hong Kong to enable the sale and ownership of individual units in a multi-storey building. It is done by an assignment of an undivided share of the land on which the building stands coupled with the right to the exclusive use and enjoyment of a shop, a flat or a self-contained unit in that building. The standard of these documents has improved with experience accumulated during the last 15 years. A casual comparison will tell that provisions in earlier documents are not as comprehensive and detailed as those in present day documents. On account of the im- portance that a Deed of Mutual Covenants plays in the ownership and management of apartment buildings, much thought has been given by the Law Society to the idea of drawing up a standard form (along the lines of Table "A" of the Companies Ordinance) or some other standard form similar to the standard Conditions of Sale or Law Society's Conditions of Sale as used in England. It was found, how- ever, that such a draft to meet every reasonable contingency would be most complicated. Therefore, the Conveyancing Sub-Committee of the Law Society has, instead of devising a standard form, recom- mended standard requirements to be included in every Deed of Mutual Covenants. This will ensure a reasonable standard for all future in- stances. No thought, however, appears to have been given to supply- ing terms missing in earlier documents, which present day practitioners would have readily included. It is often the older type of postwar apartments that are now beset by management problems. I give an illustration of the inadequacy of some of these provisions. There is usually only one main water supply to all the flats, and a HONG KONG URBAN COUNCIL 375 covenant to contribute a due share of the water rates. If one of the owners fails so to contribute there is no right for any one to disconnect his supply, unless the power to disconnect is clearly provided for in the Deed. An agreement to pay a due share of the costs for repairs is in many cases either too vague or unfair as the flats, and particularly the shops on the ground floor are of different rateable values and a heavy item of expenditure may work injustice and hardship. In recent years residents and owners of multi-storey buildings have become more management conscious. Developers have learnt that to attract buyers or tenants their buildings must have proper management. It is therefore essential to supply the deficiencies in the earlier docu- ments by legislation. The object is to supplement them with provi- sions not found in the original documents so long as they do not basically conflict with the original terms. This will bring all earlier documents up to date. Further, the recent amendments to the Build- ings Ordinance have rendered impossible of performance some of the Covenants contained in existing Deeds of Mutual Covenants relating to reconstruction. For instance no one knows what the result of a Demolition Order or the total or partial demolition of an apartment building would be when redevelopment and rebuilding on the original plan has been rendered impossible by amendments to the building regulations. Mr. Chairman, in coming years when the early multi-storey build- ings begin to fall into disrepair, problems such as I have mentioned will certainly arise. It is essential that provisions be made in advance to meet such contingencies. At the same time there are many matters concerning developer, owner and tenant relationship which cannot be provided for in the Deed of Mutual Covenants. At present the obligations even for pay- ment of monthly dues for maintenance and service rests with the owners alone, whereas in most cases the actual responsibility is passed onto the tenants. When the tenant fails or refuses to pay, the remedy is to go against the landlord who in turn has to seek reimbursement from the tenant. This often puts the owner in a difficult position particularly in cases where the tenant's excuse for non-payment is the unsatisfactory standard of service provided. The position of the management or of the co-owners seeking remedy is no better. No remedy is possible when the defaulting owner is resident abroad leaving no address but only a relative to collect the rental. Even if the address is known, to take proceedings against such an owner would involve service of proceedings abroad and the expenses incurred will be such as to render the whole remedy unpractical. Even in normal cases the costs for proceedings in Hong Kong that can be recovered by a successful litigant is often only a

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279

Page 201 of 279

374

HONG KONG URBAN COUNCIL

affairs. Conducted along proper lines, the meetings and personal con- tact among the residents themselves in the course of tackling their common problems will tend to encourage good neighbourliness, reduce friction and promote more effective responsibility in the maintenance of their common property. This cannot be the case if management is undertaken by a Government agency in whose work the residents would take no active part. The success of these associations would however have to depend on the co-operation of the residents themselves. When co-operation is not forthcoming a residents association has no means to enforce its rules uniformly among all the residents in that building. Then there are also cases where residents for one reason or another are simply not interested in co-operation together to form an organization under any circumstances.

Therefore, for an association of residents to become effective, it must have some form of legal backing. At the moment the rights and obligations of owners of multi-storey buildings are set out in a docu- ment known as a Deed of Mutual Covenants. Each apartment building has its own deed which also sets out its rules of management and the way expenses are to be shared. This document is the invention of the legal profession and is a unique device in Hong Kong to enable the sale and ownership of individual units in a multi-storey building. It is done by an assignment of an undivided share of the land on which the building stands coupled with the right to the exclusive use and enjoyment of a shop, a flat or a self-contained unit in that building.

The standard of these documents has improved with experience accumulated during the last 15 years. A casual comparison will tell that provisions in earlier documents are not as comprehensive and detailed as those in present day documents. On account of the im- portance that a Deed of Mutual Covenants plays in the ownership and management of apartment buildings, much thought has been given by the Law Society to the idea of drawing up a standard form (along the lines of Table "A" of the Companies Ordinance) or some other standard form similar to the standard Conditions of Sale or Law Society's Conditions of Sale as used in England. It was found, how- ever, that such a draft to meet every reasonable contingency would be most complicated. Therefore, the Conveyancing Sub-Committee of the Law Society has, instead of devising a standard form, recom- mended standard requirements to be included in every Deed of Mutual Covenants. This will ensure a reasonable standard for all future in- stances. No thought, however, appears to have been given to supply- ing terms missing in earlier documents, which present day practitioners would have readily included. It is often the older type of postwar apartments that are now beset by management problems.

I give an illustration of the inadequacy of some of these provisions. There is usually only one main water supply to all the flats, and a

HONG KONG URBAN COUNCIL

375

In recent years residents and owners of multi-storey buildings have become more management conscious. Developers have learnt that to attract buyers or tenants their buildings must have proper management. It is therefore essential to supply the deficiencies in the earlier docu- ments by legislation. The object is to supplement them with provi- sions not found in the original documents so long as they do not basically conflict with the original terms. This will bring all earlier documents up to date. Further, the recent amendments to the Build- ings Ordinance have rendered impossible of performance some of the Covenants contained in existing Deeds of Mutual Covenants relating to reconstruction. For instance no one knows what the result of a Demolition Order or the total or partial demolition of an apartment building would be when redevelopment and rebuilding on the original plan has been rendered impossible by amendments to the building regulations.

Mr. Chairman, in coming years when the early multi-storey build- ings begin to fall into disrepair, problems such as I have mentioned will certainly arise. It is essential that provisions be made in advance to meet such contingencies.

At the same time there are many matters concerning developer, owner and tenant relationship which cannot be provided for in the Deed of Mutual Covenants. At present the obligations even for pay- ment of monthly dues for maintenance and service rests with the owners alone, whereas in most cases the actual responsibility is passed onto the tenants. When the tenant fails or refuses to pay, the remedy is to go against the landlord who in turn has to seek reimbursement from the tenant. This often puts the owner in a difficult position particularly in cases where the tenant's excuse for non-payment is the unsatisfactory standard of service provided.

1966 — Page 201

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