ENG-1975 — Page 124

LAND AND HOUSING

Renewal of Crown Leases

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The enactment of the Crown Leases Ordinance in 1973 provided for the statutory renewal of all renewable Crown leases, other than New Territories Crown leases, at a reassessed annual rent equal to three per cent of the rateable value of the property. The renewal of the Crown leases of 5,000 lots and sections of lots in New Kowloon and of 200 lots and sections of lots in Kowloon has now been completed. There is also provision in the ordinance for the new Crown rent to be revised upon redevelop- ment to reflect any increase in value. New Territories Crown leases are automatically renewed at the same rent as for the expired term. The total revenue from the collec- tion of Crown rent during the financial year 1974-5 was $9.9 million.

Re-grant of Non-Renewable Crown Leases

When a non-renewable 75-year Crown lease falls due to expire and the land is not required for a public purpose, it is government policy that a new Crown lease for a similar term and on modern conditions should be negotiated with the lessee. The re-grant premium payable represents the full market value of the vacant land. Subject to certain provisions, re-grantees may elect to pay the premium by up to 21 annual instalments with interest at 10 per cent per annum.

Where a property is held on a non-renewable Crown lease in multiple ownership and it is not possible to issue a new Crown lease to the individual lessees for various reasons-such as their failure to agree among themselves to take up the lease-the property is granted to the Colonial Treasurer Incorporated on expiry of the lease. The new premium is payable by 21 annual instalments with interest at 10 per cent per annum. The premium amount is then apportioned among the various interests held by the former Crown lessees, and the Colonial Treasurer Incorporated offers to all former lessees an assignment of undivided shares, together with the right to ex- clusive enjoyment and occupation of their respective units within the building. This procedure is particularly useful when some of the lessees do not wish to participate in an application for, or are not capable of taking up, a new Crown lease of the property.

The re-grant of non-renewable Crown leases of lots on which post-war buildings stand has been complicated by circumstances arising since 1972. These include a sharp rise in land prices in 1972-3 and the introduction of the statutory control of rents of domestic premises. Rent control has effectively prevented domestic rental incomes from increasing sufficiently to cover the annual instalments of re-grant premia assessed on land values prevailing at the time of expiry of the original lease. In September 1975, the government agreed that, for a temporary concessionary period, the actual annual amount payable would be related to the net annual income arising from the property or interest concerned. The full amount of the normal re-grant premium instalment will become payable upon the expiration of the concessionary period— the duration of which is to be reviewed in three years' time.

Land Office

The issue, renewal, variation and termination of Crown leases is dealt with by the Land Office, which is a branch of the Registrar General's Department. Records