ENG-1972 — Page 130

LAND AND HOUSING

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renewal rent (less the 20 per cent reduction) becomes payable only in 1978. Further- more, if there is on the land a pre-war building which on May 24, 1972 was fully occupied by tenants protected by the provisions of the Landlord and Tenant Ordin- ance, there will on renewal be no alteration to the Crown rent payable before expiry of the Crown lease for such time as such provisions subsist.

The first way of effecting renewal other than by legal option is for the lessee to take a new lease upon payment of a premium instead of a reassessed rent. The second way caters for the needs of a lessee of an underdeveloped lot who does not wish to redevelop and allows him to renew his lease at a rent of 30 per cent of the net annual value of the building existing on the land, if he is prepared to accept a covenant limiting the development on the lot to that existing at the time of renewal. The covenant can be modified at any time in the future when the rent will be increased to the rent that would have been payable had the legal option been exercised. The third way is open to a lessee whose lease has 20 years or less to run. He is permitted to surrender his existing lease in exchange for a renewed lease of a longer term upon payment of a premium or reassessed rent which would be assessed taking into account the value of the lease that he surrenders.

The demand for land continues unabated and future expansion must be in the New Territories. Outline development plans have therefore been prepared, or are under preparation, for building new towns and expanding existing market towns in areas best suited to industry and high-density housing. These are Tsuen Wan, Kwai Chung, Castle Peak (known locally as Tuen Mun) and Sha Tin where entirely new towns are being built; and Yuen Long, Tai Po and Shek Wu Hui where development is based on the existing townships.

Most of these development areas contain a high proportion of leased agricultural and village building land, which must be surrendered or acquired before new develop- ment may proceed. As an incentive to surrender the lands required, an exchange system has been developed whereby old building land may be exchanged on a foot for foot basis for new building land, or five square feet of agricultural land may be exchanged for two square feet of building land, the lessee paying the difference in value between the surrendered lands and his new building lot. In layout areas where development is imminent, exchanges of land may be applied for by the lessee. Where land must be resumed for government development an offer is made to the lessee, during the period of resumption, of an exchange of land in any layout in the New Territories, to be taken up at such time as lands become available. This offer, if accepted, replaces his statutory rights to cash compensation under the Crown Lands Resumption Ordinance. The letters of offer (which are known as letters 'A' and 'B') are freely assignable and the system has generally proved acceptable to landowners, at the same time reducing the government's cash commitment for compensation.

Land Sales

The system of selling land regularly in accordance with a planned programme continued throughout the year. Demand for land was at a high level with the result that there was considerable competition at Crown land auction sales and values