Improving property management and operation of owners' corporations (2013/03/27)

President, building management disputes involving property owners, owners' corporations (OCs) and property management companies take place from time to time. The original motion urges the authorities to review the Building Management Ordinance. As far as I know, in 2011, the Government already launched a review on legislative amendments, and
the review is expected to last three years. I think that the review must be expedited, so as to cope with the intensification of building management disputes since the implementation of the Mandatory Building Inspection Scheme in the middle of last year. 

There are approximately 40 000 private buildings in Hong Kong, with nearly half of them being old buildings aged 30 years or above. These old buildings are generally ageing and in a state of disrepair. Owners of properties with OCs can of course hand over the job of maintenance and repair to their OCs. However, of the 20 000 or so old buildings, nearly 6 100 are buildings with "three no's" ― no OCs, no owners or residents organizations, and no property management companies. This is the crux of the problem. 

President, the death inquest concerning the fire in Fa Yuen Street in 2011 has recently reached a verdict, and the horror of this tragedy has not totally dissipated. More importantly, this tragedy reveals the dire consequence of neglecting old building management and underscores the importance of establishing OCs for old buildings.

The Home Affairs Department launched the Building Management Professional Advisory Service Scheme the year before last, with the aim of enabling 1 200 "three nil" buildings to hire property management companies through open tender. However, after a year or so, only 57 new OCs have been established and 15 existing OCs have resumed operation with the assistance under the scheme. The success rate is merely 6%. This proves that measures of encouragement alone cannot enable all old buildings to establish OCs. 

If we agree that there must be no repetition of the fire in Fa Yuen Street, we must squarely address the potential hazards in "three nil" buildings. It is the responsibility of the Government to consider the adoption of mandatory measures, such as the enactment of legislation to require the establishment of OCs in buildings aged 30 years or above, so as to ensure that the responsibility of property management is always undertaken by dedicated organizations.

I understand that any proposal on the mandatory establishment of OCs for old buildings will trigger varying degrees of reaction from different social strata. But, I hope that the Government can actively face up to this issue, and adopt effective measures in an attempt to take forward any such proposal. In order to ensure the orderly progress of establishing OCs for all buildings, the Government is advised to formulate a work target shortly, allocate more resources, and attempt to assist 20% of the old "three nil" buildings in establishing OCs each year as a tentative pledge, in the hope that the problem of establishing OCs for buildings can be resolved within five years, thus manifesting the Government's determination to squarely address the issue. 

President, owners of old "three nil" buildings are mostly elderly persons. Most of them are reluctant to participate proactively in the formation of OCs due to their aversion to bearing responsibility, financial problems and physical weakness, thus making the establishment of OCs an extremely difficult task. The situation cannot be improved without the active intervention of the Government. In this regard, I advise the Government to provide old buildings aged 50 years or above with direct subsidy in the first year as an incentive, so as to encourage owners to establish OCs or hire property management companies. Units participating in the scheme may include District Councils and social welfare organizations, so as to prevent the abuse of resources. 

President, the absence of OCs will certainly affect the management quality of buildings, but the establishment of OCs does not mean the end of all problems. I am especially concerned about major owners' manipulation of OCs and abuse of proxies. 

I can still remember an OC dispute that took place in Jubilee Garden, Fo Tan, many years ago. Though small property owners of the estate were deeply dissatisfied with the operation of the OC, the OC chairman representing the major owner could still be re-elected for four consecutive terms. This was because the property shares held by small property owners were nothing compared with the shares held by the major owner through the shopping arcade, parking spaces and estate public spaces. In other words, the stance of the major owner alone can often decide the voting results of OC elections. In fact, the dispute in Jubilee
Garden is an apt reflection of the severity of the problem. There are similar complaints in many housing estates nowadays, but the Government cannot do anything due to the constraint of laws. 

In addition, regarding the use of owners' proxies, the existing legislation is also plagued with loopholes. Simply by holding other owners' proxies, appointed representatives can already vote on their behalf at owner meetings. Whether they vote according to the wishes of the owners concerned can never be verified. In the past, some owners were suspected to be misled into signing proxies, and their voting right was thus exercised by other persons at owner meetings to interfere with the operation of OCs. The most sensitive issue is building repair and maintenance. There is indeed a need for reviewing the present use of owners' proxies. 

President, in the past five years, the Government received totally 8 000 or so cases involving building management disputes. Only 14 cases involving irregularities have been dealt with so far. For the remaining cases, no prosecutions have been instituted for reasons of insufficient evidence and inapplicability of legal provisions. This shows that the existing Building Management Ordinance is unable to protect the rights and interests of small property owners. For this reason, I agree that it is necessary to review this ordinance, and expedite the pace of review. 

With these remarks, President, I support the original motion.