ENG-1973 — Page 147

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LAND AND HOUSING

The government's basic policy is to sell leases to the highest bidder at public auction. All land available to the general public for commercial and industrial pur- poses and for residential sites is sold in this way. Land for special housing projects, for public utilities, schools, clinics and approved charitable purposes is usually granted by private treaty. The premium charged in such cases varies from nothing for non-profit-making schools, up to the full market value and payment by instalments for public utilities.

Previously the realised premium was normally payable by a percentage of the sale price on the fall of the hammer and the balance within a short period after the sale. The exception was industrial lots, where it could be paid by instalments. As a result of a change introduced in 1969, in respect of valuable sites in Central when the upset price of the site is $10 million or more, payment may be made by annual instal- ments over 10 years free of interest. During 1971 a further change provided for 10 per cent of the realised price to be paid within one month of the auction, and the balance by 10 equal annual instalments bearing interest at 10 per cent a year.

To assist owners of industrial lots where the premium is payable by instalments, there is a concession which, subject to certain conditions, permits the sub-letting of parts of the building without having to pay the outstanding balance of premium. In the past difficulty has sometimes been experienced in disposing of Crown land because of its unauthorised occupation, normally for storing goods. This necessitated over- coming considerable clearance problems before vacant possession could be obtained and sale could take place. In recent years a policy of fencing vacant sites and installing security guards helped to reduce this problem and a major step forward was achieved with the enactment of the Crown Lands Ordinance at the end of 1972. This ordinance gives the Director of Public Works and the District Commissioner, New Territories much greater and more direct powers to combat the unlawful occupation of Crown land and enables clearances to be effected more quickly and usually without need to resort to litigation.

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 with the former lessee. The premium payable represents the full market value of the land, less the buildings. The premium is normally payable by up to 21 annual instalments, with interest at 10 per cent per annum. Where a property is required for a public purpose on the expiration of a non-renewable lease, it is the government's policy to pay ex-gratia compensation for any building on the land at the time it resumes possession.

On June 30, 1973 the 75-year renewable Crown leases of approximately 5,000 lots and sections of lots in New Kowloon involving about 40,000 owners fell due for renewal. In addition, renewable Crown leases of about 200 lots and sections of lots in Kowloon had already fallen due for renewal but had not been renewed because of problems associated with multiple ownership.

In accordance with their terms these leases were to be renewed at a reassessed Crown rent being 'such rent as shall be fairly and impartially fixed by the Director of Public Works as the fair and reasonable rental value of the ground at the date of