ENG-1972 — Page 129

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LAND AND HOUSING

In recent years the terms of a considerable number of 75-year Crown leases have expired. Many of these are non-renewable leases but unless the land is required for a public purpose, it is government policy to negotiate a new lease term with the former lessee. The premium payable represents the full market value of the land less the build- ings. The premium is normally payable by up to 21 instalments with interest at 10 per cent per annum. Where a property is required for a public purpose, it is the govern- ment's policy to pay ex gratia compensation for any building on the land at the time it resumes possession.

Considerable progress has been made during the year to effect the re-grant of non-renewable leases which were owned in undivided shares. Previously, failure of the co-owners to reach agreement between themselves had the result that no re-grant could be effected. Many of these leases expired six years ago or more, and during the inter- vening period the former owners had no proper title to their flats. The procedure that has made possible a satisfactory solution to this problem is that the former lot or section is granted under an entirely new lease to the Colonial Treasurer Incorporated and offers of assignments from the Colonial Treasurer Incorporated are subsequently made to the individual former owners with the premium instalments apportioned according to the value of the unit in the building they formerly owned. Offers have been made to approximately 1,000 former owners and there has been almost unanimous acceptance of the terms.

In 1973 a large number of 75-year renewable leases in the New Kowloon and New Territories fall due for renewal. A considerable amount of opposition to the impending assessment of renewal rent gave rise to a review of the lease renewal policy. This review resulted in further concessions being introduced into the lease renewal policy. A statement setting out the full terms for renewal of renewable leases was issued during the year, briefly dividing the lots into two groups; the first group comprises lots in the New Territories including those Survey District Lots in New Kowloon registered in a District Land Office; the second group comprises lots on Hong Kong Island, in Kowloon and New Kowloon together with new grant lots in the New Territories registered in the Victoria Land Office.

Legislation has been enacted which provides for the automatic renewal of leases of the first group of lots as from the expiration of the first term in 1973, without any alteration in Crown rent. In the case of the second group, renewal may be effected under the legal option contained in the Crown lease or by means of one of three other ways offered by the government.

Leases which are renewed under the legal option contained in 75-year renewable leases (which provides that the reassessed Crown Rent shall be 'such rent as shall be fairly and impartially fixed by the Director of Public Works as fair and reasonable value of the ground at the date of renewal') will be given certain concessions. Firstly, the rent which is assessed by the Director of Public Works will be abated by 20 per cent. Secondly, the reassessed Crown rent will be phased-in for a five-year period commencing July 1, 1973, so that in the first year following renewal, lessees will only be required to pay 50 per cent of the rebated renewal rent. In the second year they will pay 60 per cent and the rent will be increased by steps of 10 per cent until the