ENG-1961 — Page 255

214

LAW, ORDER AND RECORDS

Over the past few years the sale of flats and floors for residen- tial or industrial use has become very popular in Hong Kong and large blocks of flats are rapidly replacing the old, traditional three and four storeyed buildings with which most of the urban areas were developed. This building boom has been due to several factors, first the tremendous demand for residential accommodation stem- ming from an increasing population and increasing prosperity; secondly, the need for more factory space for expanding industries and for factories formerly operating in sub-standard premises; thirdly, the extreme shortage and very high cost of building land which make it an economic necessity to build high; fourthly, the fear of tenants that if they remain in rented accommodation their rents will be increased as the price of land rises; and fifthly, the desire of developers to get a quick return on their investment, and to re-invest their capital and profits in yet another lucrative scheme. So flatted redevelopment proceeds apace, and it is estimated that, quite apart from resettlement estates and other Government build- ings, there are now some 4,000 new multi-storey blocks comprising over 80,000 flats, shops and offices of various sizes, which have been constructed by private enterprise.

An important and serious aspect of this development is that, once a developer has sold all the units in a new building, he has no further interest in them, and the management of the building and its general maintenance are left to the individual flat-owners, who frequently do not have properly-organized committees with suitable powers to run the building. Although normally the flat- owners enter at the time of purchase into a deed of mutual covenants, this does not provide a satisfactory solution because the enforcement of a covenant is not easy and flat-owners are reluctant to incur the costs of litigation over small breaches. Many problems have therefore arisen especially regarding the main- tenance of the fabric of the building and the common parts and services. A Working Party appointed by Government has been investigating all these problems and at the end of the year was about to make recommendations on the steps required to provide for the proper management of large blocks of flats.

With the building boom at its peak and the process of frag- mentation of lots and buildings in full swing, it was inevitable that the number of land transactions and the amounts involved

Page 255Page 256