Page 170 of 237
316
HONG KONG URBAN COUNCIL
To illustrate the problems involved I propose to outline briefly one of the many cases which have come to my attention.
A Mr. WONG, Owner of a ground floor of a four storey building in Yau Ma Tei, was chosen to be the recipient of demand notes for premium. In 1967 when the 5th instalment amounting to $5,258 was due, he was not able, for various reasons, to collect from the other three owners their shares of the premium. In 1968 Government sued Mr. WONG and the other three co-regrantees in a court action which resulted in a writ of execution being levied against his shop and later withdrawn on technicality grounds. In the meantime the amount of premium payable to Government has increased to $26,290 and Mr. WONG's proposal to pay the 5th instalment in full on behalf of himself and his other co-owners (of whom two had died and one had migrated to the United States) and one quarter of the remaining sum (being the 6th and 7th instalments) has been rejected. In a letter dated 29th August, 1969 from the Land Officer Mr. WONG and his co-owners were informed that the Crown has re-entered upon the lot and a formal notice to that effect will be published in the Government Gazette shortly.
Obviously the existing arrangements for the renewal of Crown Leases and the payment of premia are both inadequate and unfair. There is an increasingly large number of owners running into difficulties similar to those faced by Mr. WONG as a result of the sale of individual flats in the postwar period. The need for an equitable arrangement has not only been recognized but has become increasingly urgent. In Kowloon residents in Yau Ma Tei, Tsim Sha Tsui and Mong Kok have complained very bitterly about what they consider to be utter injustice and a note of warning had been struck of the possible repercussions if immediate and appropriate measures are not introduced to solve the problems arising from the renewal of Crown Leases. It should not require too much imagination for us to envisage the chaos in a multi-storey building with over 300 individual owners if the Crown has to exercise the right of re-entry upon the land on account of a few owners failing to pay their shares of the premium.
Clearly what is needed is a machinery capable of allowing apportionment of the premium for and to be paid by the individual owners of a property on renewal of the Crown Lease and at the same time, of permitting the Crown to recover the amount due to it if an owner fails to pay up without resorting to the exercise of right of re-entry which is a cumbersome procedure and can only be used in respect of the entirety of the building. This, I propose, should be done by way of legislation on the following lines:-
(a) When the Crown Lease of a property is due to expire any individual owner can apply to the Crown Lands & Survey Office of the Public Works Department for renewal.
HONG KONG URBAN COUNCIL
317
(b) On receipt of such an application the Crown Lands & Survey Office should notify the applicant in writing of the terms (including specifically the amount of premium payable) under which Government would be prepared to grant renewal; the same letter should also indicate the period during which acceptance of the terms should be confirmed by all individual owners together with an indication of the shares of premium each individual owner is prepared to pay.
(c) If no reply is received within the period specified or if the owners fail to reach agreement over their respective shares of premium the Crown Lands & Survey Office should proceed to apportion the premium payable by each individual owner in conjunction with the Rating & Valuation Department and to inform the owners accordingly together with a notice that if no objection is raised within a specified period a charge will be registered against the property in the name of individual owners in favour of the Treasury Incorporated to secure payment of premium by instalments unless the owner pays the premium in a lump sum.
(d) In the event of any individual owner raising objection to the apportionment determined by the Crown Lands & Survey Office mortgage of the property to the Treasury Incorporated will be deferred until the owner concerned has had his appeal heard by a tribunal constituted on lines similar to the Tenancy Tribunal.
(e) The decision of the Tribunal is final and when this last hurdle is over there should be no more argument and the Crown in whose name the Treasury Incorporated is established can take action against individual owners for default of payment of premium without exercising the right of re-entry on the land as whole.
(Mr. Hilton CHEONG-LEEN left the meeting at this point).
You will notice, Sir, that my proposal entails basically a special machinery in the Crown Lands & Survey Office for the purpose of apportioning the premium payable for renewal, the establishment of a Treasury Incorporated to which all owners paying their premia by instalments must mortgage their properties, and a tribunal to which appeals against the apportionment determined by the Crown Lands & Survey Office may be lodged. The Treasury Incorporated, which is Government controlled, will be in a position under my proposed arrangement to exercise its right to dispose of any individual flat in the same way as a mortgagee if the owner fails to pay up a premium instalment within a specified period. The merit of this proposal clearly lies in the fact that whilst the Crown's interest is fully protected,
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Page 171
I
Page 170 of 237
316
HONG KONG URBAN COUNCIL
To illustrate the problems involved I propose to outline briefly one of the many cases which have come to my attention.
A Mr. WONG, Owner of a ground floor of a four storey building in Yau Ma Tei, was chosen to be the recipient of demand notes for premium. In 1967 when the 5th instalment amounting to $5,258 was due, he was not able, for various reasons, to collect from the other three owners their shares of the premium. In 1968 Government sued Mr. WONG and the other three co-regrantees in a court action which resulted in a writ of execution being levied against his shop and later withdrawn on technicality grounds. In the meantime the amount of premium payable to Government has increased to $26,290 and Mr. WONG's proposal to pay the 5th instalment in full on behalf of himself and his other co-owners (of whom two had died and one had migrated to the United States) and one quarter of the remaining sum (being the 6th and 7th instalments) has been rejected. In a letter dated 29th August, 1969 from the Land Officer Mr. WONG and his co-owners were informed that the Crown has re-entered upon the lot and a formal notice to that effect will be published in the Government Gazette shortly.
Obviously the existing arrangements for the renewal of Crown Leases and the payment of premia are both inadequate and unfair. There is an increasingly large number of owners running into difficulties similar to those faced by Mr. WONG as a result of the sale of individual flats in the postwar period. The need for an equitable arrangement has not only been recognized but has become increasingly urgent. In Kowloon residents in Yau Ma Tei, Tsim Sha Tsui and Mong Kok have complained very bitterly about what they consider to be utter injustice and a note of warning had been struck of the possible repercussions if immediate and appropriate measures are not in- troduced to solve the problems arising from the renewal of Crown Leases. It should not require too much imagination for us to envisage the chaos in a multi-storey building with over 300 individual owners if the Crown has to exercise the right of re-entry upon the land on account of a few owners failing to pay their shares of the premium.
Clearly what is needed is a machinery capable of allowing apportionment of the premium for and to be paid by the individual owners of a property on renewal of the Crown Lease and at the same time, of permitting the Crown to recover the amount due to it if an owner fails to pay up without resorting to the exercise of right of re-entry which is a cumbersome procedure and can only be used in respect of the entirety of the building. This, I propose, should be done by way of legislation on the following lines:-
(a) When the Crown Lease of a property is due to expire any individual owner can apply to the Crown Lands & Survey Office of the Public Works Department for renewal.
HONG KONG URBAN COUNCIL
317
(b) On receipt of such an application the Crown Lands & Survey Office should notify the applicant in writing of the terms (including specifically the amount of premium payable) under which Government would be prepared to grant renewal; the same letter should also indicate the period during which acceptance of the terms should be confirmed by all individual owners together with an indication of the shares of premium each individual owner is prepared to pay.
(c) If no reply is received within the period specified or if the owners fail to reach agreement over their respective shares of premium the Crown Lands & Survey Office should proceed to apportion the premium payable by each individual owner in conjunction with the Rating & Valuation Department and to inform the owners accordingly together with a notice that if no objection is raised within a specified period a charge will be registered against the property in the name of individual owners in favour of the Treasury Incorporated to secure payment of premium by instalments unless the owner pays the premium in a lump sum.
(d) In the event of any individual owner raising objection to the apportionment determined by the Crown Lands & Survey Office mortgage of the property to the Treasury Incorporated will be deferred until the owner concerned has had his appeal heard by a tribunal constituted on lines similar to the Tenancy Tribunal.
(e) The decision of the Tribunal is final and when this last hurdle is over there should be no more argument and the Crown in whose name the Treasury Incorporated is established can take action against individual owners for default of payment of premium without exercising the right of re-entry on the land as whole.
(Mr. Hilton CHEONG-LEEN left the meeting at this point).
You will notice, Sir, that my proposal entails basically a special machinery in the Crown Lands & Survey Office for the purpose of apportioning the premium payable for renewal, the establishment of a Treasury Incorporated to which all owners paying their premia by instalments must mortgage their properties, and a tribunal to which appeals against the apportionment determined by the Crown Lands & Survey Office may be lodged. The Treasury Incorporated, which is Government controlled, will be in a position under my proposed arrangement to exercise its right to dispose of any individual flat in the same way as a mortgagee if the owner fails to pay up a premium instalment within a specified period. The merit of this proposal clearly lies in the fact that whilst the Crown's interest is fully protected,
Page 170Page 171
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